North Carolina Public Charter Schools Association

Using the Resources around You: Leasing Unused Public Facilities

Using the Resources around You: Leasing Unused Public Facilities

 

K. Curry Gaskins, Esq.[1]

Matt Triplett[2]

 

You’ve investigated the charter school formation process.  You’ve elicited the support of local parents and community groups, and maybe even an education management organization.  You understand the rules and procedures for organizing a board and gaining state approval of your charter school.  And you’re excited about the prospect of getting your new institution off the ground.  Now comes the hard part: how do you gather the necessary resources for the facility that your new school will need to be successful?

 

Many charter school founders find themselves asking this very same question.  Fortunately, North Carolina state law has an important provision that may come in handy.  Thanks to General Statute 115C-238.29E, if your community has an educational facility that is not currently in use, you may be able to lease that facility for fair market value.  The statute provides that:

 

At the request of the charter school, the local board of education of the local school administrative unit in which the charter school will be located shall lease any available building or land to the charter unless the board demonstrates that the lease is not economically or practically feasible or that the local board does not have adequate classroom space to meet its enrollment needs.[3]

 

The language of this statute is clear: charter schools may request to lease unused facilities at fair market rates and the local school board may be obligated to grant such requests.  However, the statute presents two potential obstacles.  First, as phrased, the statute applies only to charter schools and not charter school applicants.  Because state law requires applicants to provide information about their school’s facilities before a charter is awarded, the timing of a lease request under this statute may be tricky.[4]  An applicant may need to find other, existing facilities to use in the near term or carefully broach the issue of leasing unused space from the local school board prior to applying for a charter.  Alternatively, in some situations a charter may be granted before facilities have been secured.[5]  In that case, the newly minted charter school may use the authority of this statute to request the use of idle space.

 

The second obstacle is potentially more complex.  As written, the statute suggests several permissible situations in which the local school board may lawfully deny a lease request.  If the local school system needs the space, for instance, then the charter school may be denied access.  An obvious concern for charter schools is that a school system might make claims of necessity or economic infeasibility to prevent its otherwise-available space from being used by a charter school.

 

The Martin County Superior Court recently addressed this issue in Bear Grass Charter School, Inc. v. Martin County Board of Education, 12-CVS-271.  There, Bear Grass was granted a charter by the State Board of Education pursuant to the “fast-track” application process, allowing the non-profit to open a public charter school beginning in the 2012-13 school year.  After receiving the charter, Bear Grass requested that the Martin County Board of Education lease to Bear Grass certain unused school facilities.  The Board denied all such requests and Bear Grass sued, seeking a declaratory judgment regarding the facilities and enforcement of General Statute 115C-238.29E.

 

Following oral arguments on June 27, 2012, the Court issued a Preliminary Injunction Order in favor of Bear Grass, finding that:

 

Three times since receiving its charter Plaintiff [Bear Grass] has requested of Defendant [the Board] to lease for its own use the school facility that the Defendant has previously leased to the Town of Bear Grass [. . .] for a lease amount of one dollar ($1.00) per year.  Paragraph 6 of the lease agreement provides that the leasee, the Town of Bear Grass “shall not cause to be used the [school facility] for public or private school purposes.”  The Defendant has for all intents and purposes abandoned the school facility for the purpose of the education or benefit of the children of Martin County.[6]

 

The Defendant has had adequate time to demonstrate that the use of the school facility is not economically or practically feasible or that it does not have adequate classroom space to meet its enrollment needs and has failed to do so as it is required so to do in accordance with the provisions of [General Statute 115C-238.29E].[7]

 

Based on such findings, the Court held that the lease between the Board and the Town was void as “against public policy,” and required the Board to lease the facilities to Bear Grass for the 2012-13 school year.[8]

 

The impact of the Bear Grass ruling remains to be seen.  Not only may the Board appeal the decision, but a full hearing on the matter is scheduled for the last day of January, 2013.  In the meantime, several questions remain.  Most importantly, what must a local board of education do to prove that the use of such facilities is “not economically or practically feasible,” as required by the statute?  From Bear Grass, it is clear that supplying no reasonable excuse and leasing the facilities to a non-using, third-party for a nominal sum is not sufficient.  But, beyond that, the answer is uncertain.

 

Despite this uncertainty, a number of other states have similar laws that provide clues about the ways a court or administrative judge might further interpret the North Carolina law.  California, for example, requires local school districts to share space and ensure that charter students have access to the same types of facilities as those enjoyed by students enrolled in typical public schools.[9]  In 2003, the California Court of Appeals enforced this statute by requiring a local school district to provide space for approximately 80 charter school students.[10]  While interpreting the California law, the court noted that the clear intention behind the provision was that “public school facilities should be shared fairly among all public school pupils, including those in charter schools.”  This sentiment has a nice parallel to the North Carolina statute, which states that “[a] charter school that is approved by the State shall be a public school within the local school [district] in which it is located.”[11]  However, the California law differs from North Carolina’s in that it provides no exception if the local school district claims that sharing space would be infeasible.

 

More recently, in June 2012 the Ohio Supreme Court ruled in favor of a would-be charter school in a dispute regarding the use of public property for charter school purposes.[12]  After purchasing unused school facilities from the Cincinnati Board of Education at an auction, the buyers decided to open a charter school.  However, the school board attempted to enforce a restriction on the property to prevent the buyers from using it for educational purposes.  While striking this restriction as unlawful, the Ohio Supreme Court looked to the state’s facilities assistance law and observed that Ohio had a “legislative preference for giving charter schools the opportunity to operate out of unused public school buildings.”  Like North Carolina’s leasing provision, the Ohio law requires local schools to offer unwanted properties to charter schools for purchase at fair market rates.  Therefore, the same preference might be identified in North Carolina’s law.

 

In at least some states, therefore, charter schools have been successful at securing the use of unused public space despite attempts by local schools to frustrate those efforts.  General Statute 115C-238.29E provides a potential avenue for charter schools to obtain similar access in North Carolina.  To date, this statute has not been significantly tested, but in the right situation, as evidenced by Bear Grass, it may be the key to securing your charter school’s success.  For more information, visit the Education Commission of the States’ website, where a comprehensive, state-by-state comparison of facilities assistance laws is maintained.[13]

 

 

 

Note: This article is provided strictly for informational and educational purposes.  Specific legal questions should be directed to legal counsel.

 

Womble Carlyle Sandridge & Rice, LLP, is a full-service business law firm with an Education and School Law Team, serving a wide range of regional, national, and international clients in numerous industries, including elementary, secondary, and higher education.  In North Carolina, the firm has offices in Charlotte, Greensboro, Raleigh, Research Triangle Park, and Winston-Salem.  For additional information, please contact Curry Gaskins or Liz Riley.



[1] Associate, Womble Carlyle Sandridge & Rice, LLP

[2] Law Student, Duke University Law School (JD expected, 2013)

[3] N.C. Gen. Stat. § 115C-238.29E.

[4] N.C. Gen. Stat. § 115C-238.29B(13).

[5] N.C. Gen. Stat. § 115C-238.29D(c).

[6] Bear Grass Charter School, Inc. v. Martin County Board of Education, 12-CVS-271, Findings of Fact #2.

[7] Id., Findings of Fact # 6.

[8] See Id., Conclusions of Law # 2 and Order # 1.

[9] Cal. Ed. Code 47614.

[10] Sequoia Union High School Dist. v. Aurora Charter High School (2003).

[11] N.C. Gen. Stat. § 115C-238.29E(a).

[12] Cincinnati City School Dist. Bd. of Ed. v. Conners (2012).

[13] http://mb2.ecs.org/reports/report.aspx?id=88