Case Study:Two Schools LLC

Seattle, WA

Two Schools LLC is a partnership between Giddens School (“Giddens”) and Lake Washington Girls Middle School (“LWGMS”) (collectively, the “Schools”). Its purpose is to serve as a planning and development vehicle for the Project described in further detail below. Each of the Schools is a member of Two Schools and shares equally in its governance and decision making.

Founded in 1972, Giddens is an independent, co-educational school for grades preschool through 5 in Seattle, Washington. At the time of the financing in 2018, the School served 161 students. Founded in 1996 and opened in 1998, LWGMS is Seattle’s first secular middle school for girls and served 109 students in grades 6 through 8.

Project Overview

Two Schools desired to pursue the acquisition and development of a new $30 million facility. Because of their similar missions and shared values and the opportunity to achieve significant economies through shared use of a single campus, the Schools elected to co-develop and occupy a single site. The Project improvements include a facility space totally approximately 53,000 square feet to house the operations of each of the Schools with room for their growth plans and space for exclusive use by each School and shared community space (including a gymnasium, food service facilities, playgrounds and parking). Two Schools sought permanent debt financing for the development of the campus with the main source of payback being operating cash flow and the proceeds of a $12 million capital campaign.

Financing Overview

Two Schools secured a creatively structured $21.5 million tax-exempt bank purchased bond, the proceeds of which funded (1) the net cost of its purchase of land on which to develop a new facility (2) construction of the Project and (3) related costs. The financing was structured as a fixed-rate, drawdown, tax-exempt revenue bond.

Wye River Group’s Role

Wye River had the privilege to work closely with a select group of Board members and management to assess Two School’s debt capacity and plan its Project financing. More specifically, our services included:

  • Preliminary project planning including an assessment of debt capacity
  • Developed comprehensive Finance Plan for the Project
  • Coordinated the solicitation, evaluation and selection of candidates to provide banking and underwriting services for the School’s financing
  • Negotiated key terms of the financing with the selected provider
  • Organized and coordinated Finance Team activities for transaction
  • Reviewed transaction documents to assure performance of financial institution and professional services firms in conformance with Finance Plan and commitment letters
  • Coordinated closings of the financing

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