Ownership provides autonomy. This means no constraints from the landlord or your authorizer. A school can control its own destiny -- plus, there will not be any further rental increases. Further, depending on the cost of your acquisition financing, your annual acquisition financing repayment may be materially lower than your lease payments.

Red Hook specializes in evaluating school campus development. We analyze risk -- including political, landuse and community support -- when trying to obtain permits to allow a school building on a property. We have an excellent track record of getting projects to the finish line and we are so confident that we guarantee it: if Red Hook does not get final approval for charter school use, a school can walk away from the project with no money out of pocket. We provide 100% of the financing -- the school does not pay anything until the property is move-in ready. We pride ourselves in understanding that each school is unique and has different needs; we make sure these needs are met through the design of the building.

Red Hook is led by David Hyun and Craig Underwood. David always has a school’s best interests in mind because he was an operator himself. He led the Alliance College-Ready Public School as its CFO/COO. He drove in-house development projects as the organization expanded campuses all while creating strong reserve funds. Craig has decades of experience working in the capital markets, specifically with charter schools. He knows the ins and outs of financing a project and knows how to make facility ownership affordable for schools. Together, the financing and development teams of Red Hook are a one-stop shop.

Red Hook offers a Lease to Own model. The model helps schools with limited enrollment (often due to space constraints); schools that have not received their renewal yet; and schools that have less-than-ideal cash reserves. It also helps schools avoid taking the risk of pre-development expenses to secure approval to build their campus. That risk includes costly out-of-pocket spending, a significant time investment, as well as the potential failure to gain approval. Overall, the Lease to Own model helps to create an affordable and responsible path to facility ownership.

Charter schools with strong credit (think great FICO score) can directly access a variety of permanent financing options. Schools who are younger might not have the necessary longevity to be viewed as credit worthy, and thus likely will have a greater difficulty accessing traditional financing. Credit worthiness normally includes a solid history of financials, enrollment, and academics to gain favorable financing (think low interest rate). If a school decides to directly finance a project themselves through traditional means like philanthropy, new market tax credits, traditional bank loans or municipal bonds, the school will be liable for pre-development costs. If a school is unsuccessful in obtaining the approval to proceed with the project, the school will have spent $200,000-$800,000 of its valuable reserves with nothing to show for it. Red Hook takes this risk for the school with no financial commitment from the school if Red Hook fails to receive the necessary approvals.

A school pays nothing until keys are delivered to the property and the school can move in. Then, the school makes payments to Red Hook in the form of lease payments until the school acquires the property from Red Hook.

Red Hook clients have access to a number of financing options, including traditional bank debt, philanthropic funding, Community Development Financial Institutions (CDFI’s), and the municipal bond market.

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