IDA hopes bonds encourage charter schools to open in Arizona
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The project manager for Arizona's Industrial Development Authority (IDA) is hoping that the bonds it's issued to a national charter school chain to build new facilities in Tennessee will encourage it to open up shop in Arizona.
Context: The IDA approved a $25 million bond proposal in March for KIPP Public Schools to refinance debt and to help fund new charter schools in Nashville. The organization is expected to seek additional bonds later this year, Axios' Nate Rau reported.
Why it matters: IDA program manager Patrick Ray told Axios that the authority has been urging KIPP to open schools in Arizona.
- Ray described KIPP as a "real warm and fuzzy kind of feel-good story" because it runs elite charter schools that primarily serve low-income students.
- KIPP hasn't told the IDA about plans for any Arizona schools yet.
What they're saying: "I've asked them, 'Gee, can we say that you're getting close to having an Arizona facility?' I haven't gotten an answer back yet. But I'm going to work on them. I'm trying to encourage them to," Ray told Axios.
Between the lines: KIPP still has plenty of ties to the state.
- The group sought financing in Arizona after facing hostility from the Nashville board that issues bonds for charter schools.
- Ray said he expects the IDA to approve its fourth bond for the charter schools in October or November.
Of note: A KIPP spokesperson did not return messages from Axios.
- When asked in 2019 what it would take to get them to open a school in Arizona, their Texas superintendent noted that San Antonio offered millions in donations, and told the Arizona Republic that it would take a similar invitation from Phoenix leaders.
How it works: The IDA essentially serves as a conduit for organizations to take loans they receive from financial institutions and use them to back tax-exempt bonds.
- "They get a loan from their lender and they run it through our organization and they pay us a fee that we then turn over to the state. So it's a win-win for everybody," said Ray, who emphasized that the bonds don't involve any state money.
Yes, but: The IDA came under scrutiny last year after the Republic conducted an extensive investigation about its increasingly larger and riskier bonds to entities all over the country.