Sage International School grows in structures, enrollment

A new era starts now for Sage International School, the Boise charter school that has pieced together a single campus and all the K to 12 grades in its first six years.

Sage has ambitions to become the first public International Baccalaureate school in the nation to offer all four IB primary, middle, diploma and career related programs, said Don Keller, Sage’s executive director and a founding member who started the school in 2010.

To that end, Sage closed Dec. 18 on the $8.125 million purchase of the former Parkcenter Mall, a former Sara Lee Bakery office across from the mall and an adjacent former bank property.

The 8-acre acquisition, including 130,000 square feet of building space, will give Sage its first school year in 2016-17 where all 13 grades will be taught at one location. This will be the last school year with grades eight to 12 exiled to downtown.

“The students that start in kindergarten next year will be the first ones to travel through a seamless IB education in one location,” Keller said.

The International Baccalaureate is a non-profit educational foundation that offers international education programs to more than 4,200 schools round the world. It is an inquiry-based and transdisciplinary education with multiple subjects taught in one class period, Keller said.

He added that the school day revolves around the 10 IB attributes:  inquirers, knowledge, thinkers, communication, principled, open-minded, caring, risk-takers, balanced, reflective.

The school is renovating 55,000 square feet of the mall space to house the upper grades and also give Sage its first library, gathering space and science labs. The estimated cost of the renovations is $3.2 million.

Sage has leased and occupied 31,000 square feet at one end of Parkcenter since August 2014, waiting for a Key Bank call center to move out of a large portion of the mall and assembling the financing to buy the property.

Sage opened in 2010 with 213 students in kindergarten to seventh grade in the Sara Lee Bakery building with 11,171 square feet. Every year since then has seen a different configuration of grades and real estate. Eighth grade was added in 2011 and each year since has added another grade, rounding out with the first 12^th grade graduation of 15 students coming this spring. Sage now has 950 students with an expected 1,100 in the next two years after the fully built-out Parkcenter is completed for the fall term.

“We’ve been on this facilities and curriculum journey,” Keller said. “We’ve had to slowly walk this path for six years.”

In its second year,  Sage had to expand out of Sara Lee, where K-2 remains. But the middle school students moved into the ground floor of the former Microsoft office at Ninth and Miller streets. Sage first leased just the ground floor, added the second floor the following year and the third floor the year after that as the school expanded to the high school grades.

The five-year lease at Ninth Street expires in June, just as Sage is ready to move the middle and high school grades to Parkcenter.

“We only tried to lease more space to house the increasing enrollment,” Keller said. “Finally, this year, we reached an enrollment to get a loan from the bank.”

Keller said the school needed to reach 900 students to attract bank attention.

Sage International got a $7.8 million loan from Banner Bank, fully funded with tax-exempt bond issued by the Idaho Housing and Financial Association, which offered a lower interest rate of 3.23 percent. Building Hope, a Washington, D.C. nonprofit that loans money to charter schools,  loaned Sage $4.5 million as a subordinate  loan at the outset, essentially a down payment to make the deal more attractive for banks (see accompanying article for more on the financing), said Keith Donahue, Sage’s development director.

“Now we just get to be a school,” Donahue said. “It was six years of looking and searching to squeeze kids in. It’s really a relaunch with a school. This is the first time we have a school facility.”

Keller said Sage International is paying $12.5 million to create a school that would cost an estimated $30 million to $40 million to build from the ground up.

What Sage got was a shell-design building with moveable walls – essentially outer walls with a wide-open interior other than support columns.  The mall also has an atrium with skylight running the full 458-foot length of the building.

The atrium will become Learning Street. About 23 feet wide for the most part, Learning Street will serve the role of a student union and corridor with tables for studying and opportunities for students of all except the youngest grades to interact.

Sage has never had a dedicated library, performance space, science labs or even lunch space. The remodel will include a 4,326-square-foot “cafegymatorium,” the largest space Sage has had. It will be a lunch area and a stage, and on rainy days it can be used for gym activities, Donahue said.

Sage is building a 2,600-square-foot library as well as four science labs, three art rooms and labs specifically outfitted for design technology and computer design to bolster STEM education (science, technology, engineering, and math).

The build-out also included 28 additional classrooms to the 23 classrooms already in place in the western third of the building. The 30,000 Parkcenter square feet that Sage converted into school already displays the look of the future space.

Hallways circle around; bold colors set off middle school from elementary school; windows give a view into each classroom; lockers are open shelving on the walls.

“We’ve gotten to a point where we have one of the most unique education opportunities in the United States,” Keller said.

Financing a $12 million charter school, the Sage way

As a public charter school, the Sage International School in Boise operates largely with state funding, but the school had to assemble an elaborate financing package to buy and renovate the Parkcenter Mall.

Even before the mall purchase on Dec. 18, Sage has supplemented its state funding – this year $6.4 million – with a series of J.A. and Kathryn Albertson Family Foundation grants and its annual Mind the Gap fundraising campaign with students, parents and the community.

Sage Executive Director Don Keller said the school would not have been able to open in 2010 without a $550,000 federal grant. The first year also saw a pair of Albertson grants for $100,000 and $125,000, which, at that time, were standard startup grants that the foundation was awarding to any charter schools opening in Idaho.

The Albertson Family Foundation has remained an active player as Sage gradually occupied and acquired the Parkcenter Mall. Alberston awarded Sage $350,000 for the initial renovation of 30,000 square feet of Parkcenter that grades three to eight have occupied since October 2014. Albertson provided another $750,000 grant for Sage’s renovation of the rest of Parkcenter, said Keith Donahue, Sage’s development director.

The foundation brought on Bluum, a Boise new school incubator that is collaborating with Albertson with its “20 in 10” initiative. The initiative that offers competitive grants to create 20,000 new school seats in Idaho charter, private and public schools in 10 years that started in 2014, said Terry Ryan, Bluum’s CEO.

“They are considered one of the state’s higher performing charter schools,” he said. “They have proven themselves academically and financially.’”

The Albertson Foundation collaborates with Building Hope, a Washington, D.C., nonprofit that has loaned $160 million to 200 charter schools in the 13 years it has provided facilities financing, real estate development and project management for charter schools. Building Hope also has an office in Florida and opened a Boise office in 2013 as it became an investment partner with the Albertson Foundation for charter school grants within the “20 in 10” initiative.

“We’re able to load money to Sage at below-market rate,” said Dru Damico, director of real estate development at Building Hope. ”It takes a lot of the risk out the equation for the bank.”

As  Sage started to look for financing to buy Parkcenter, Albertson recommended Building Hope, which loaned Sage $4.5 million at 3 percent as a subordinate loan. This served as a first payment on the property and also as an incentive to attract a primary lender, ultimately Banner Bank.

“First of all,” Damico said. “Sage has an exceptional academic program and high quality leadership. They have the real estate fundamental that made for a good investment. We want to support their ability to become an investment-grade charter school.”

Before Banner came on board, however, Donahue approached the Idaho Housing & Finance Association, the only statewide authorized bond issuer for nonprofit 501(c)(3) organizations. IHFA provides “pass through” financing for many charter schools, IHFA spokesman Kevin Harper said.

With Sage International in mind, IHFA assembled a $7.8 million tax-exempt bond that was sold to Banner, which used it to fund a loan to Sage at 3.23 percent.

The loan will be paid back with a portion of the funding received from the state. With debt payments now, and ever since the start, Sage has had a Mind the Gap fundraising campaign to raise additional income. Mind the Gap has raised a cumulative $621,000 since 2010 and is shooting to raise $225,000 in 2016.

Buying the mall is expected to cost Sage International less than leasing has so far.

“Ideally, as a charter school, you do not want to spend more than 20 percent on facilities,” Donahue said. “We think we will be at 15 percent. We think we will spend $300,000 less for facilities costs.”

Sage International School looks to expand to Canyon County

Sage International School wants to build a second school in Canyon County to be closer to the Treasure Valley’s population center, which has drifted westward from Boise for the past two decades.

Canyon County residents have said the charter’s location in downtown Boise is inconvenient, Sage Executive Director Don Keller said.

He’s talking to leaders at the Idaho Youth Ranch, which contacted him about placing a school at the ranch’s 260-acre property in Middleton.

“The Idaho Youth Ranch is really interested in partnering with us,” Keller said. “They came to me out of the blue.”

Middleton sounds ideal for Keller, who determined 56,000 school-age children live within 15 miles of Middleton.

“My wish timeline would be that we would be open (in Canyon County) no later than 2018,” Keller said.

Right now, the Idaho Youth Ranch is the active option, but Keller has talked to others in Canyon County, and Sage may end up somewhere else in Canyon County.

“We’ve been exploring who would be willing to work with us,” Keller said. “Let’s find a place where we can give more people a choice of an International Baccalaureate education.”