Client success story: ACES at Chase
With dual financing options, ACES at Chase meets its school opening deadline
Area Cooperative Educational Services (ACES), founded in 1969, is a not-for-profit entity established to operate as an educational service center supporting 25 towns and school districts in south central Connecticut. ACES at Chase is a premier inter-district magnet middle school – focused on Science, Technology, Engineering, Arts, and Mathematics (STEAM) education for students – created through a melding of Thomas Edison Middle School and Chase Collegiate School (Chase Collegiate). Could this entity identify and close on a financing solution to open and recruit students and staff in time for a new school year?
Challenge
Thomas Edison Middle School, part of ACES, had leased its current Meriden, Connecticut, facility for two decades when the city announced it would reclaim possession of the building at the end of its lease. This decision meant the school leadership team needed to procure a 165,000-square-foot facility, relocate the school, and still have time to recruit students, all within a 12-month time frame.
ACES Deputy Executive Director Tim Howes identified an independent school – Chase Collegiate – on a beautiful campus, that was closing its doors due to bankruptcy proceedings. Howes knew this was the ideal location for ACES, however, the zoning alone typically takes 18 months to complete and Howes only had 12 months.
Howes turned to Al Schenck, Senior Relationship Manager, KeyBank Middle Market Commercial Banking, after a positive experience working together on a depository and treasury management solution.
Since the organization qualifies as a tax-exempt quasi-government agency, Schenck immediately contacted Dave Zapata, Vice President and East Region Manager for Key’s Government Finance group.
“To put a deal like this together, the biggest challenge was to move in and have time to recruit students for the magnet school,” said Howes. “We didn’t want September to arrive and have a school with no students.”
“Al and Dave were by our side through the entire process, always two steps ahead of everyone else, and steering us through the paperwork to keep us on point.”
Tim Howes, ACES Deputy Executive Director
To assure they met the challenging timeline, Schenck and Zapata recommended ACES pursue a dual path that included seeking a traditional (taxable) loan and a tax-exempt revenue bond, which would save ACES significant money due to the lower interest payments.
The KeyBank team focused on pursuing both loans, assuming the traditional loan would close first – allowing ACES to open on time, welcome existing students and faculty, and recruit additional students and faculty. Then, Zapata and Schenck would work to close the tax-exempt loan and transfer ACES to that option.
“There were so many factors that were out of KeyBank’s and ACES’ control, and that was the most stressful part of this deal for me,” said Schenck.
“Because Key closed the deal so efficiently, we had the advantage of three months to focus on setting up ACES at Chase in our new location and recruiting students and staff, which allowed us to far exceed our enrollment goals.”
Tim Howes
Solution
Zapata worked with the Connecticut Health and Educational Facilities Authority (CHEFA), pursuing the TaxExempt Revenue Bond, Series 2021 (the “2021 Bond”), keeping in close communication with Schenck and Howes. At the same time, Schenck focused on the taxable loan, which closed in May 2021, assuring ACES could meet its deadline of purchasing the Chase Collegiate facility by June 1, 2021.
Then, in June, Zapata and Schenck helped ACES convert the taxable loan into a tax-exempt revenue bond.
“We truly felt supported by Al and Dave throughout the entire process,” said Howes. “We knew they were looking out for our best interest and options, and they led with our goal top of mind.”
Results
ACES at Chase opened with an enrollment of 800 students and a long waiting list. The Waterbury community of students, staff, and families who abruptly lost the former Chase Collegiate facility now have the opportunity for a new beginning on the same majestic campus.
“Because Key closed the deal so efficiently, we had the advantage of three months to focus on setting up ACES at Chase in our new location and recruiting students and staff, which allowed us to far exceed our enrollment goals,” said Howes. “The KeyBank team was instrumental in helping us attain the new school campus and the customer service from Al and Dave is second to none. I can’t say enough good things about how these two banking professionals made the dream come true, and they truly care about their clients. I actually worried more about the logistics of moving an entire school than I did about financing the deal.”
“Dave and I didn’t view this as a transaction,” said Schenck. “We viewed it as a relationship. We’re still here and will continue to support and help with other needs.”
For the school’s ribbon-cutting ceremony, Howes noted that, “Al came all the way over to cheer us on and offer his support, and we were all so happy to see him there. We do not get that level of customer service from any other vendor.”
Howes said future plans include expanding ACES at Chase to serve grades 9 – 12, as well as middle school students.
For more information:
Contact
- David Zapata • VP East Region Manager, Key Government Finance, at 315-470-5180 or david_zapata@keybank.com
- Albert M. Schenck • SVP Middle Market Banking, KeyBank, at 203-854-3416 or albert_m_schenck@keybank.com
- Matt Hummel • SVP and Commercial Banking Team Leader for Southern New England, at 860-293-4138 or matthew_e_hummel@keybank.com
Visit
https://www.key.com/businesses-institutions/solutions/banking/commercial.jsp