Out-of-the-box plan saves Modesto Christian

March 7, 2017

 

modesto christianBy NORA HESTON TARTE
Business Journal Writer

MODESTO — Modesto Christian School was hit hard in the Great Recession and last year, was poised to close its doors. But a passionate parent and team of involved community members came to its rescue.

“(Modesto Christian) survived because of the people,” said Glen Villanueva, a physician and the first parent to step up. “A number of key people wanted to see the school continue and stayed on board to help make that a smooth transition, or at least as smooth of a transition as possible.”

In June, Modesto Christian School Inc., a newly formed nonprofit, officially took over the school from Neighborhood Church. Villanueva serves on its board.

“It’s a startup from the standpoint of new ownership, new leadership,” he said. “But it has a long-standing reputation because it’s been in the community for so many years.”

The new nonprofit developed a plan to purchase the school property using money from donors and other financing. However, as a new entity, the school had trouble getting a bank loan. So, it got creative.

Modesto Christian’s new board put together a group of investors who agreed to purchase 32 acres of the 55-acre property at below market rate, a price Neighborhood Church agreed to.

At the end of two years, Modesto Christian Schools, Inc. will purchase the property from the investors for the same price. By then, the board believes the school will be financially strong enough to make the purchase.

“It is probably the most creative funding vehicle I have ever heard of,” said the school’s superintendent, Jonathan Burton. “For the investors, when they sell it back to us for the price they paid for it … they get a deduction. It’s the only legal tax deduction you can take in which you get all your money back.”

Twenty percent of the money needed to complete the project was donated and went mostly for capital improvements.

Modesto Christian Schools bought the high school campus, the gym, the athletic fields, open green spaces and parking lots. The elementary school was not included, so Modesto Christian needed to build one quickly.

Construction couldn’t start until June 1 when the ownership change was official, and classes were scheduled to begin August 11.

“For our first six months, we were building the airplane while we were flying it,” Burton said. “We had no Plan B.”

Great Valley Academy charter school purchased the other 23 acres.

Despite the proximity, Burton said the competition is no different than what private schools and charter schools have faced for years. Modesto Christian shares amenities with the charter school, and even invited the school on its annual Washington D.C. fieldtrip.

“We actually have a really positive relationship with them,” Burton said.

Villanueva and the rest of the board have made it their goal to keep what was good about the old school but to make improvements where needed. That includes rolling out new classes over four years to focus on academic rigor and increase graduation standards consistent with California State University requirements.

The board continued with the planned 2 percent tuition increase that Neighborhood Schools announced prior to changing hands. There will be a second increase for 2017-18, although the amount has yet to be decided.

Losing the tie to a specific church has turned out be an advantage. When Neighborhood Church was in charge, Modesto Christian faced a limited pool of donors.

As an independent Christian school not affiliated with one church, the board now has the freedom to reach out to more entities and has received generous donations.

In addition, instead of facing a decrease in enrollment, as the board anticipated, the 2016-17 school year experienced a bump, and the preschool almost doubled in size. Fifteen teachers stayed on during the change.

“With everything that happened to it a year ago, (Modesto Christian) shouldn’t have survived, but it did,” Superintendent Jonathon Burton said. “This is a school that was living what I call a ‘God story’… something just amazing was happening here.”

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