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Private School, Inc.
A costly, risky enterprise gets off
the ground todayas Kapolei’s first
nonprofit academy opens
Mike and Bernadette Axelrod have high hopes for Island Pacific Academy, the new private school in Kapolei that opens its doors today to their 6-year-old daughter, Ella, and nearly 200 other students.
"We're ecstatic," said Mike Axelrod. "It's a wonderful facility. There's nothing on this level on the Leeward side."
His wife, Bernadette, said she's ready to sign up Ella's little sister, Melissa, as well. "She's just 9 months old, but I want to make sure her name's on the list now for pre-kindergarten in three years."
While the Axelrods are counting on a long future for Island Pacific, launching a private school is an expensive and risky enterprise without the financial backing of a church or an endowment.
Academex Systems Inc., the for-profit Canadian company that developed the Kapolei school, has created four schools in British Columbia. One abruptly closed during the summer. Another downsized to five grades from 12 for this school year.
But Island Pacific officials say that experience has no bearing here because the Kapolei school is an independent nonprofit with its own board of trustees made up of Hawaii people, and is on firm financial footing.
"We are not one of their campuses," said Headmaster Daniel White, who once headed Seabury Hall on Maui. "We've been very clear that we are an independent school. We have our own board of trustees responsible for the functioning of this school. They just sort of jump-started us. They were the ones that fronted the initial sort of venture capital."
Island Pacific is the first secular, college preparatory school to open in the fast-growing "Second City." It is starting with grades pre-kindergarten through seven, and plans to add a grade each year through high school.
Venturex Global, an Academex affiliate, put up $2 million to develop the school and get it rolling, according to Larry Caster, chief operating officer of Academex Systems (Hawaii) Inc. Central Pacific Bank lent an additional $6 million to build the two-story, 28,000-square-foot building next to Kapolei Library.
Caster has worked on bringing a private school to Kapolei since the days when he headed sales and leasing for Campbell Estate. Now president of Island Pacific's board, he said he expects the school to reach enrollment capacity next year and start generating cash flow to pay off its debts.
"This school has not only been very thoroughly analyzed from a market and financial standpoint," he said, "but we also have an incredible headmaster and a great teaching staff."
He noted that unlike other private schools in Hawaii, Island Pacific's overhead is low because it will rely on the neighboring Kapolei Library and regional park, for example, rather than building its own gym or library.
"The numbers really work well because we've got such an efficient physical plant, and we're not going to have to support all that infrastructure," he said. "Plus, the marketplace is so strong. Nobody wants to drive downtown if they can possibly help it."
Island Pacific will do traditional fund raising and seek grants like other schools, Caster said, but will not call on parents to pony up for capital costs as Academex has done in Canada.
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Last December, Academex asked parents at Central Okanagan Academy, which was the first campus it founded in 1999, for loans of roughly $20,000 a student, in addition to tuition, to help finance the school. A similar proposal was made at another school managed by Academex, Seymour Academy in North Vancouver.
Instead, Seymour shut down, and its staff and parents have opened their own school independent of Academex. The loan proposal did not get off the ground either at Central Okanagan, in Kelowna. A parent group took over management of the school from Academex this summer, although Venturex remains its landlord.
"The bond was way overpriced; it was unsecured," said Laura Tessmer, a founding parent who had three children at Central Okanagan when the proposal was floated. "I should not be liable for their business losses. They are not interested, in my opinion, in educating children. They are land developers."
While she became disillusioned with Academex over the bond and other financial concerns, she remains loyal to the school, calling its teachers "phenomenal."
Jonathan Derksen, head of school at Central Okanagan Academy, noted that Academex had carried the start-up costs for a "top-notch education" since the school's founding.
"From an educational standpoint, we've had very good success, and I would credit Academex with that," he said. "In terms of creating a secure financial environment, that has yet to be seen, at least in our school."
The school, which served 264 children from preschool to grade 10, has cut back to 107 students in just preschool through third grade this year "to ensure financial viability," Derksen said. That means Tessmer's oldest son, Jake, who started there at kindergarten, has had to switch to a public school for fifth grade while his younger siblings stay at Central Okanagan Academy.
Greg Clark, chairman of Academex Systems Inc., based in Richmond, B.C., said he could not comment on the closure of Seymour Academy. He characterized the recent shift to independent management at Central Okanagan and at another Academex school, Southpointe Academy in Tsawwassen, as a natural evolution.
"The purpose of Academex is to help with the birth of a school, and the intention is always to transition the school over time to become a community school," he said. "People are surprised at the level of resources it takes to get an independent school off the ground. It is not simply paying tuition."
"In each case the schools required substantial investment," he said. "The recovery of that investment has varied. Overall, Venturex has not taken a significant loss as a company."
Clark said his company has learned through experience that the best model for starting a private school is to keep the school's board independent of its developers, as is the case at Island Pacific and Aspengrove School, the fourth school Academex started in Canada.
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Academex Systems (Hawaii) has a contract to develop Island Pacific's high school, scheduled to open in 2006. Venturex holds the 55-year ground lease on the 3-acre parcel that houses the school, with an option to buy the land, and may also develop adjacent land, Caster said.
Originally scheduled to open last fall, the school was delayed while financing was lined up. With a 20-to-1 student-teacher ratio, it will focus on inquiry-based learning, critical thinking and character building, White said. The arts will be embraced as part of the core curriculum.
The school's art teacher, Andree Paradis, a veteran of both public and private schools, is thrilled with her new position and her airy classroom, which comes with a view.
"It's just my dream job come true -- to be able to develop the program from the roots and to have the support all around," she said. "This is my job for the rest of my life."
Mike Axelrod shares that confidence. "I don't have concerns about the long-term viability of the school," he said. "It's a long, long-awaited need."
www.islandpacificacademy.com
