Niagara Falls uses `lease-back' deal to build new school

Journal Record, The (Oklahoma City), Sep 22, 2000

NIAGARA FALLS, N.Y. (AP) -- Students arriving at the new Niagara Falls High School will get a large dose of public education -- and a lesson in the power of private money.

The $80 million institution is the first New York-run school to be privately built in an arrangement that gives Niagara Falls a state- of-the-art building without a penny's increase in the property tax.

"It is a revolution in school financing, partnership, programming, leadership and technology," a beaming Superintendent Carmen Granto declared.

The kids are beaming, too: Each of the 2,400 students will be issued a laptop computer, they will swim in an Olympic-sized pool, run on an indoor track, and attend shows in a 1,700-square-foot theater.

They also can study in the "technology core," a 2.5-story circular hub of glass that contains a library and high-tech research equipment.

"My brother says I'm so lucky," said freshman Stephanie Wruck, whose brother is in seventh grade. "He can't wait to go here."

Using a so-called "lease-back" deal, Minneapolis-based Honeywell, with private investors, built the school and will lease it to the school district for 30 years for about $4.8 million a year.

Under the state's school construction formula, New York will reimburse about 83 percent of the district's cost.

After the 30 years, ownership transfers to Niagara Falls.

So unusual is the arrangement it required a special act of the state Legislature in 1996 to skirt the bond process traditionally used for school construction.

U.S. Undersecretary of Education Judith Winston called the school "a remarkable new beginning for education." Across America, there are 3.5 million students in schools that need repair or replacement, she said.

"This building is the direct result of your collecting and harnessing the power of partnership," she said at the school's opening earlier this month. "You have provided one model that other school districts may want to follow."

Neighboring Buffalo, with the oldest collection of school buildings in the state, is now pursuing a similar arrangement for a handful of schools.

The idea has yet to catch on outside New York, authorities said.

"With all the attention and energy and money that goes toward the physical facilities, sometimes that ends up taking away from the true academic mission of the schools," said Joe Agron of American School & University Magazine. "This may be a way for school districts to act as any other tenant."