CHARTER SCHOOL IS IN DEFAULT ON $9.9 MILLION LAUSD LOAN.

Byline: TONY CASTRO Staff Writer

A nationally recognized charter school in South Los Angeles has defaulted on a $9.9 million loan extended by the Los Angeles Unified School District using voter-approved bond funds, documents and interviews show.

The Accelerated School, an elaborate, high-tech campus where Mayor Antonio Villaraigosa delivered his State of the City address last spring, made a $200,000 payment about two weeks ago -- but only after district officials received a memo alerting them the campus was in default. The school previously had made two payments totaling about $1 million, the last in October 2005.

``They made a payment, but they're still way behind,'' school board member David Tokofsky said. ``Why we haven't foreclosed, I don't know.''

Michelle Meghrouni, the district's assistant general counsel, said Wednesday the loan is in default, and that district and Accelerated School officials are discussing a possible resolution, including renegotiating terms of the deal.

Meghrouni said she believes the loan, made in June 2004 using revenue from voter-approved school construction bonds, is the only one of its kind extended by LAUSD to a charter school.

Jonathan Williams, the founder and co-director of the school as well as a member of the State Board of Education, said campus officials are trying to work through the financial crisis.

``We're in the process of renegotiating fair terms with the LAUSD, and that, I think, is all I can say right now until I confer with the chair of our board,'' said Williams, who is also a member of Villaraigosa's Council of Education Advisers and his appointee to the city's Parks and Recreation Board.

``We took out a $10 million line of credit with the district in order to finish construction of our school (and) we were hopeful and ambitious of our fund-raising.''

Although the school has close ties to the Mayor's Office, there is no indication that Villaraigosa has been involved in the loan or in the renegotiation discussions.

Williams said the original terms of the loan required repayment of the loan within five years. The payments included interest, which Meghrouni said was calculated based on the district's bond rates.

Meghrouni said the loan was approved by the school board in 2002 as part of the construction package involving the Accelerated School, but that campus officials did not take out the loan until two years later.

No action taken

At that time, she said, the board did not have to take action on the loan.

``This (the loan) is not something we normally do,'' said Meghrouni. ``We try to come up with other creative ways to allow other charter schools to operate. But this is not typical of what we do.''

Meghrouni said she was unsure of how the credit line for the school originated, but believed it was included in the construction package as a way to cover cost overruns.

Williams said the school requested the loan when Accelerated School officials realized that fundraising from corporations and foundations would fall short of expectations.

Meghrouni said she understands the Accelerated School's fundraising has picked up with a recent corporate commitment for $1.2 million over two years that will help the school in its operation and in repaying the loan.

Approval needed

Meghrouni said any renegotiation of the loan terms would have to be approved by the school board.

``We remain optimistic and hopeful that we'll have (the negotiation) wrapped up in the next couple of weeks.''

According to Tokofsky, collateral for the loan is the school and the 4-acre site on which it was constructed.

Accelerated, which serves 1,200 Latino and African-American students from pre-kindergarten through high school, was named Time Magazine's Elementary School of the Year in 2001 for ``having found the most promising approaches to the most pressing challenges in education.'' Situated about a mile southeast of the University of Southern California, the Accelerated School has a college-like campus lined with palm trees and filled with amenities such as high-tech science labs, top-of-the-line workout equipment and an outdoor amphitheater.

Humble beginnings 

Williams and Kevin Sved, like Williams a former teacher, opened the school in 1994 with 50 students in grades K-4, renting space from a Catholic church where every Friday the founders and parents packed up and stored the school equipment so the space could be used for church services.

Its expansion a decade later was made possible by $28.1 million from the LAUSD and a credit line with the district of $11.3 million, of which the school used $9.9 million to complete its growth, according to district documents.

According to Tokofsky, the loan was necessary because the school founders' vision for their construction -- ``more detailed, more elaborate, more spectacular'' than anything the LAUSD has built -- exceeded the budget allotted by the district and the state.

tony.castro(at)dailynews.com

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