First QSCB Sale Gets Nod

The New Jersey Economic Development Authority last week approved the state’s first qualified school construction bond issue, a $19 million transaction that will help finance the expansion of a charter school in Newark.

The federal government allocated $27.25 million of QSCBs to the city, with the North Star Academy Charter School of Newark receiving up to $19 million of that bonding capacity. Newark is the only municipality in New Jersey to receive federal QSCB borrowing capacity.

New Jersey’s QSCB bonding limit is $223.2 million, not including Newark’s allocation. The state has yet to move forward on its QSCB borrowing plans, according Tom Vincz, spokesman for the state’s Treasury Department.

QSCBs are a product of the American Recovery and Reinvestment Act. Investors receive principal payments from the borrower and tax credits from the U.S. government instead of interest payments.

The $19 million QSCB deal for North Star is a direct-purchase agreement with Capital One NA. Wolff & Samson PC is bond counsel.

Bond proceeds will help finance a three-story, 52,000-square-foot facility adjacent to North Star’s downtown campus, according to NJEDA documents. The new building will include more than two dozen classrooms, three science labs, and a basketball court with 200 bleacher seats. Funds will also support renovation projects at the existing school facility.

North Star operates two middle schools, a high school, and an elementary school on three campuses. It serves 930 students and has a waiting list of more than 1,900. Some 95% of its graduates currently attend college, according to the NJEDA.

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