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When Michael Goldstein (MPP '98) was having trouble coming up with a way to finance a permanent home for the Media and Technology Charter High School (MATCH) he opened this year, he turned to fellow Kennedy School graduate and friend Todd Rassiger (MPP '98) for help. Rassiger is an assistant vice president of investing banking at Mass Development, the state's economic development finance agency.
"To be a start-up, with no building, with no credit is very difficult," said Goldstein. "It's difficult even to get a lease." Charter schools do receive some public money, about $8,500 per student, but no money for overhead costs. Where to get $5 million for a building was a very big problem for Goldstein, who is now renting a space in Brookline for the school.
"It's such an unknown quantity," said Rassiger of charter schools, in detailing why it is difficult to get financing. Charter schools have only been in existence in the country for seven years, and just five in Massachusetts. An added complication is that charter schools have a five-year contract. If the state deems them unsuccessful, they lose their charter. That is not much incentive for a prospective lender.
Goldstein had heard about a little known bond available through the Department of Education. The Qualified Zone Academy Bond is in effect, a low-interest loan. Although it sounds simple, Goldstein said it is an incredibly complex transaction, which is why no other charter school has used it.
Goldstein said being able to consult with Rassiger has been great. "I can call Todd when things get off-track and he will say, 'Well, do this,'" said Goldstein. "That has been incredibly helpful." Especially, Goldstein chuckled, since the sum total of his real estate experience amounted to sharing apartments with friends.
Additionally, Goldstein said what has made the difference for him is that he has a savvy board of trustees and Rassiger to guide him through the process. He already has a potential backer lined up. If the deal goes through, and Goldstein thinks it will, he will have the first charter school in Massachusetts to own its building. And now, other charter schools are quizzing him on how to obtain the bond.
For Rassiger, a project like this, in addition to helping a friend, is one reason he attended the Kennedy School. "I went into government work with a huge desire to help make it work effectively," he said. "To see public policy happen is awesome. I'm really happy to be a part of that."
Goldstein's idea to start a charter school was born of suggestions from his Kennedy School adviser, Associate Dean Joe McCarthy, and his desire to work with disadvantaged teenagers. After volunteering with teens in New York, where he was a journalist, and becoming frustrated by the problems he saw, such as overcrowding and disinterested students, Goldstein decided to pursue education policy.
"You get to make a lot of the decisions yourself," said Goldstein, about founding a charter school. "I wanted to serve the kids I like working with, in a situation where you are not 100 percent bogged down by red tape. Forty percent, I can deal with."