Canyon Capital Realty Advisors and Andre Agassi Ventures Launch Innovative Fund to Build over $500 Million of Educational Facilities for Best-in-Class Charter School Operators Across U.S.

Andre Agassi and Bobby Turner, Co-Managing Partners of the Canyon-Agassi Charter School Facilities Fund (Photo: Business Wire)

LOS ANGELES--()--Canyon Capital Realty Advisors (CCRA) and Andre Agassi Ventures (AAV) have partnered on an innovative new real estate fund – the Canyon-Agassi Charter School Facilities Fund (CACSFF) – to promote the success and growth of best-in-class charter schools in urban communities across the United States.

The Fund – the first of its kind in the nation – will help charter schools overcome the biggest impediment to growth by facilitating the development of more than 75 urban school sites for best-in-class charter school operators. The Fund will create new seats for approximately 40,000 students over the next three to four years.

The Fund will invest in new charter schools by constructing new facilities or retrofitting existing properties with a focus on providing high quality educational facilities for urban communities and embracing environmental responsibility. The first campus, located in North Philadelphia’s Allegheny West community, is scheduled to open in August 2011 and will serve the kindergarten through 4th grade students of KIPP Philadelphia Elementary Academy.

This new partnership combines CCRA’s and AAV’s substantial resources, development expertise and passion for educational excellence to assist the charter school community in securing academically friendly, environmentally sustainable school facilities for students and teachers. Charter schools are growing at a 14.5 percent annual rate, and operators routinely cite securing suitable learning facilities as one of their greatest challenges.

The fund has the backing of a world-class group of institutional investors who share CACSFF’s commitment to effecting positive societal change while pursuing positive financial returns. Anchor investors include Citigroup, Intel Capital, and the Ewing Marion Kauffman Foundation.

CACSFF will work with and develop facilities for charter school management organizations with a track record of excellence in urban communities. Addressing the huge mismatch between supply and demand for charter school facilities and the lack of available capital, the fund will acquire underutilized properties from public and private sources and transform them into learning-friendly and environmentally responsible school sites through renovation, retrofits or ground-up construction.

In addition to providing high-performing charter operators with a state-of-the-art facility at an affordable lease rate, the Fund will provide the operators with the opportunity to purchase their schools once they have reached full occupancy. To this end, CACSFF will help charter school operators obtain permanent financing to purchase their properties using New Market Tax Credits, tax-exempt bond offerings or funding from the U.S. Treasury’s Community Development Financial Institutions Fund.

“With access to affordable high-quality facilities, charter schools can realize their full potential and expand their reach in communities where there is a huge waiting list for their services,” said Bobby Turner, CACSFF Co-Managing Partner and Chairman and CEO of Canyon Capital Realty Advisors. “Our goal is to create an effective, sustainable and market-driven mechanism to provide the facilities funding that has been so elusive to high-performing charter schools. Given the keys to modern classrooms and campuses, there’s no telling how far these schools can go.”

“Education is the key opportunity in life,” said Agassi, CACSFF Co-Managing Partner, CEO of Andre Agassi Ventures and founder of the Andre Agassi College Preparatory Academy. Founded in 2001, the high-achieving K-12 college preparatory academy serves more than 600 underprivileged students in Las Vegas and has been named a National Model Charter School by the U.S. Department of Education. “Successful charter schools have proven to be centers for excellence that have helped children fulfill their potential and achieve their dreams. The Canyon-Agassi Charter School Facilities Fund is designed to open the door for the most successful charter organizations across the country to reach more students in communities looking for an alternative to traditional public schools.”

Currently, more than 5,000 charter schools serve some 1.5 million students in the U.S., but approximately a third lack suitable or permanent facilities – a percentage that is expected to grow significantly as 400 to 500 additional schools come on line each year. Charter schools are free public schools that operate independently from the traditional school district structure. Unlike conventional public schools, however, charter schools cannot use direct taxation or bonding to fund real estate development, leaving many without the access to capital or in-house expertise required to build or modernize campuses.

Overseeing the day-to-day operation of CACSFF is Glenn Pierce, the former CEO and President of Pacific Charter School Development (PCSD), the nation’s preeminent nonprofit developer of charter school facilities. At PCSD, Pierce had a track record of producing award-winning school sites at a fraction of the cost-per-seat incurred by traditional public school systems. While at PCSD, Pierce oversaw the development of 37 charter schools providing over 15,000 school seats and led a group of managers with extensive experience in the operation, development and financing of charter schools.

“High-quality school facilities have been particularly elusive for charter schools due to financing barriers and regulatory obstacles,” Pierce said. “The combination of Canyon Capital Realty Advisors and charter pioneer Andre Agassi is a dream team that can make great things happen for high-performing charter schools in urban America.”

“Citi is proud to play a key role in this inspiring partnership," said Vikram Pandit, CEO of Citigroup, the largest investor in the fund. "The determination of Canyon and Andre Agassi to provide high-quality schools to children in underserved communities is unparalleled. This is a great opportunity to help young people get the education they need and deserve."

“Intel has a long history of supporting education. In just the last ten years, Intel has invested more than $1B toward improving education around the world and this investment is another example of this commitment,” said Arvind Sodhani, executive vice president of Intel Corporation and president of Intel Capital. “We believe that every student should have access to a high-quality learning environment and we hope our support enables CACSFF to serve this mission with top-tier charter providers in urban communities across the U.S.”

“The rarest of investments today is the un-crowded trade,” said Harold Bradley, CIO of the Kauffman Foundation. “Our ability to work with Canyon and with Andre Agassi to finance the construction of charter schools across the country while at the same time building thousands of seats for underserved children makes this every bit as exciting and as promising as investing in frontier or emerging markets around the world.”

About Canyon-Agassi Charter School Facilities Fund

The Canyon-Agassi Charter School Facilities Fund is the nation’s first market-driven real estate fund designed to accelerate growth of high-performing charter schools and provide educational opportunities for 40,000 underserved students while simultaneously targeting market rate financial returns for socially responsible investors. The Canyon-Agassi Charter School Facilities Fund is managed by Canyon-Agassi Realty Advisors, a partnership between an affiliate of Canyon Capital Realty Advisors LLC and Agassi Ventures, LLC.

About Canyon Capital Realty Advisors

Canyon Capital Realty Advisors, along with its affiliate, Canyon Capital Advisors LLC, are money management firms and registered investment advisors headquartered in Los Angeles, California with approximately $20 billion in assets under management. CCRA’s real estate investment activities focus on providing debt and equity capital to real estate owners, operators, developers, corporations and entrepreneurs, enabling them to participate in transactions that would have traditionally eluded them due to capital constraints.

CCRA has been a pioneer over the past decade in the area of "triple bottom line" investing - an investment philosophy of providing sound financial returns for investors, fostering opportunities for residents of the communities in which it invests, and embracing environmental responsibility. A national leader in socially responsible investing, over the past decade CCRA, through its Canyon-Johnson Urban Funds, has facilitated more than $4 billion in urban revitalization in densely populated, ethnically diverse communities across the country generating strong financial returns while creating thousands of new jobs, building thousands of units of affordable workforce housing and developing millions of square feet of community serving retail.

About Agassi Ventures

Agassi Ventures, LLC is 100% owned by Andre Agassi. Agassi Ventures is the business entity that acts as the vehicle for all of Mr. Agassi’s investments and manages all of his endorsements, partnerships and investment ventures. Mr. Agassi and other members of Agassi Ventures’ senior management team are committed to transforming U.S. public education for underserved youth and are all actively involved in the Andre Agassi Foundation for Education (Agassi Foundation), a charitable foundation founded by Mr. Agassi in 1994. Through his executive leadership roles, Mr. Agassi serves as the visionary and actively contributes to the strategic direction for both Agassi Ventures and the Agassi Foundation.

The Andre Agassi College Preparatory Academy (Agassi Prep) was founded in 2001 and has epitomized charter school success with 608 students (289 elementary, 164 middle and 155 high school), including 53 students classified as special education students. In 2009, Agassi Prep graduated its first senior class, with 100 percent of graduates accepted to college, as were the 19 graduates in the class of 2010. Agassi Prep has received both “Exemplary” and “High Achieving” (2008-2009) designations under No Child Left Behind from the State of Nevada Department of Education.

Agassi Prep also exemplifies environmentally-friendly operations. The Agassi Foundation is installing a 465 kilowatt solar/photo-voltaic energy system in two phases to provide electric power to Agassi Prep, using the existing utility feed-in meters at the school. The first phase is over 230 kilowatts and the second phase will be 235 kilowatts, which will make it the largest roof top solar project in the state of Nevada.

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Contacts

CACSFF Contact
Steve Sugerman
310-974-6680
or
Citigroup Contact
Citi Community Capital
Danielle Romero-Apsilos
212-816-2264
www.citicommunitycapital.com
or
Intel Corporation Contact:
Intel Global Communications Group
Christine Dotts
480-554-7959
christine.dotts@intel.com

Contacts

CACSFF Contact
Steve Sugerman
310-974-6680
or
Citigroup Contact
Citi Community Capital
Danielle Romero-Apsilos
212-816-2264
www.citicommunitycapital.com
or
Intel Corporation Contact:
Intel Global Communications Group
Christine Dotts
480-554-7959
christine.dotts@intel.com