For most schools and universities, it’s a given that there is a gap between the resources they have on hand and what would be available under ideal conditions.
With a little more funding from the state, a school district could pay for additional aides or reduce class size; a larger capital earmark or a donation from an alumnus could clear the way for more classrooms or a modernized media center.
But too often, school budgets fall short of what is needed to provide the quality of education that administrators envision. In other cases, school improvement is held back by space limitations—the footprint of a building or the layout of a campus makes it too difficult to expand and provide additional space.
When financial and space needs become obstacles that can’t be overcome with routine solutions, schools may seek other approaches—legal challenges, shrewd investments, creative development deals—to accomplish their goals.
Airing it out
Spread among several buildings in the Chelsea neighborhood of New York
City, Xavier High School has been providing a Catholic education to boys and young men in Lower Manhattan for nearly 170 years. But the students arriving on the Xavier campus in the 21st century have curricular needs and interests different from those of previous generations.
The Jesuit-run institution realized it needed to find a way to expand to provide the programs desired by modern high school students, but that was easier said than done in the dense urban setting of the nation’s largest city.
Over the years, Xavier has added some adjacent buildings to its campus, but in the 2000s found itself mostly hemmed in by the development in the neighborhood and without the funds to acquire any pricy nearby real estate for more instructional space.
“Nobody ever has enough space, but we were bursting at the seams,” says Xavier President Jack Raslowsky. “Over the years, there had been a lot of change in the nature of our programs. We didn’t used to need space for computer labs, robotics, arts, acting. We were not looking to increase enrollment. We wanted the optimal space to do what we wanted to do programmatically.”
Leaving the neighborhood that had been their home since before the Civil War was out of the question—providing education in urban areas is one of the key missions of the Jesuit order, and except for the space crunch, the school site is ideal.
“There’s not a school in the city that’s more accessible,” Raslowsky says. “We have 12 subway lines within two blocks.”
But Xavier had an ace up its sleeve—a valuable asset familiar to high-rise developers in New York City and some other large cities, but not a tool that many educators, school designers, or, say, the Vatican have encountered: air rights.
“Because the air rights were considered church property, the Vatican had to be notified of the sale,” Raskowsky said. “Their response was ‘How can you sell air?’”
Room to grow
Because Xavier’s buildings along 15th and 16th Street are six stories or less and not as tall as the city zoning regulations allow, the school held the rights to expand its facilities to the maximum square footage permitted. Raskowsky says Xavier had about 130,000 square feet of “air rights.”
After an earlier deal to sell air rights collapsed in 2008 along with a good portion of the national economy, Xavier found another partner—and a way to parlay its asset into a new wing for the school.
A former union hall adjacent to Xavier on 15th Street was on the market, and a condominium developer, Alchemy Properties, wanted to acquire that site and build a luxury residential high-rise there. But to do so at the size that made financial sense, it needed to acquire air rights from Xavier.
Xavier and Alchemy struck a deal: The school sold most of its air rights to the developer, and the company agreed that if it was able to purchase the union hall site, it would build a 25-story tower—with the first six floors set aside as a new wing of the high school.
The new space, called Fernandez-Duminuco Hall, opened in 2016. The six-story addition adds about 35,000 square feet of instructional space, and is connected to the older school campus on floors two, three and five. Beyond those floors are 18 floors of multimillion-dollar condominiums.
The school space was built as an empty shell along with the rest of the high-rise and then architect Beyer Blinder Belle and construction manager Richter+Ratner got to work on the interior spaces of the school section.
“The connection between new and historical is pretty seamless,” says Kristin Di Stefano, project manager for Richter+Ratner, although some the seams—namely the floor plates between the old and new buildings—did not match exactly, and ramps had to be installed.
Graphical displays in the connecting hallways depict the 170-year history of Xavier and enhance the transition of those going from old to new.
“It’s a wonderful mix of history and contemporary design,” says Raskowsky.
Among the spaces in the new hall are classrooms, offices, a lobby meeting space, a music suite with practice and live performance rooms and a recording studio, a two-story commons space that doubles as an auditorium for performances, and a space dedicated to science, technology, engineering, arts and math that includes a robotics workshop, three-dimensional printers and video production equipment.
To enhance acoustics and keep sound in one part of the music suite from interfering with other parts, the floor in that section sits atop springs that serve as a buffer above the concrete base floor.
“It provides an air barrier that buffers vibrations,” DiStefano says.
The design of the spaces reflect modern school design trends—flexible spaces outfitted with mobile furniture so multiple uses can be accommodated; areas for formal and informal interaction among students and teachers, and ample opportunities for hands-on learning.
The addition has proven popular among Xavier’s 1,075 students.
“On one side of the lab, you may have teachers and students working on computer coding, and someone on the other side working on robotics,” says Raskowsky. “In the middle you might have someone using the 3-D printer and someone else at a computer editing film. Even at five in the afternoon, there are plenty of students working.”
The school and the condo residents have separate entrances on 15th Street, but there is little interaction between the two user groups because most students enter the school through the main entrance on 16th Street.
“They barely know the students are there,” Raskowsky says of the residents.
As insufficient funding has become a permanent condition for schools, both public and private, many institutions have turned to private donations and development funds to supplement tax revenue or tuition payments.
Many schools have formed foundations or endowment funds that provide money for educational needs that aren’t covered in school budgets. A savvy investment strategy will keep the fund growing so that resources will be available into the future to pay for enhancements or unexpected needs.
But sometimes, a savvy investment can pay off beyond all expectations—especially when you’re in the heart of Silicon Valley and a parent of two of your students is a venture capitalist.
Back in 1990, St. Francis High School in Mountain View, Calif., created the SF Growth Fund to support the school’s long-term initiatives. In 2012, Barry Eggers, a founding partner in Lightspeed Venture Partners and a board member of the school’s growth fund, his daughter and his son, both St. Francis students, were spending a lot of time on their phones using a new app.
After learning all he could about the app and its creators, Eggers led Lightspeed to invest in Snap, the company that created Snapchat. At the same time, he persuaded St. Francis to contribute $15,000 from its growth fund as part of the initial $500,000 in seed money.
Five years later, Snapchat, made popular by millions of young people like Eggers’ children, had become an immense success. Snap began selling stock in early March through an initial public offering.
The $15,000 St. Francis invested translated to about 2 million shares. The school sold about 1.4 million of those shares at $17 a share and collected about $24 million.
St. Francis officials say the windfall will be managed as part of the growth fund, and they plan to “determine how the money can be leveraged to make the largest impact on our students,” says school president Simon Chiu.
“The return on this investment will allow us to accelerate the goals of our strategic plan, which emphasizes our commitment to make Catholic education more affordable and accessible to our community, recruit and retain outstanding faculty and staff, and develop innovative programs and facilities,” Chiu says.
See you in court
Public schools and their patrons often have resorted to the legal system when they believe lawmakers are not living up to their responsibilities to provide sufficient funds to provide children with a suitable education.
The latest court battle is in Chicago, where the nation’s third-largest school system, drowning in financial difficulties, sued Illinois Gov. Bruce Rauner and the Illinois Board of Education in February. It alleges that the distribution of funds to schools has resulted in separate and unequal education systems and violates the Illinois Civil Rights Act.
“The State of Illinois,” Chicago school officials contend, “maintains two separate and demonstrably unequal systems for funding public education in the state: one for the city of Chicago, whose public school children and 90 percent children of color, and the other for the rest of the state, whose public school children are predominantly white.”
The lawsuit says that in Fiscal 2016, Illinois spent 74 cents on Chicago students for every $1 it spent on students outside Chicago. That means that Chicago, with 20 percent of the state’s public school students, gets only 15 percent of the state’s education funding. The gap amounts to $500 million a year, the school district says.
The Chicago school system also argues that the state imposes an unequal pension funding obligation compared with other districts.
The lawsuit asserts that Chicago’s funding obligation to the Chicago Teacher’s Pension Fund in fiscal 2017 is about 35 percent of the district’s total teacher payroll, while districts other than Chicago will contribute only about 1.5 percent of total teacher payroll to the state’s Teacher Retirement System.
Kennedy, staff writer, can be reached at [email protected].