Class struggle: demand for private schools leads to construction boom.

Demand for private schools in Los Angeles is skyrocketing, with nearly two dozen of them expanding or modernizing their campuses, and a handful even tapping the municipal bond market to raise much-needed capital.

At least 20 applications from private elementary and high schools have been received by the office of Councilman Jack Weiss, whose Fifth District encompasses the Westside and Sherman Oaks, wealthy neighborhoods with a high concentration of the schools.

With tuition already costing upwards of $25,000 a year, expansion is one of the few ways the schools can grow at time when many are already near capacity or in outmoded facilities.

The biggest project in the works is from Harvard-Westlake School, the largest private school in Los Angeles, which will break ground in June on a $110 million remodeling of its middle school in Holmby Hills. The school recently bit the $100 million mark raised for a $150 million capital campaign, all of it from donations.

Buckley School, in Sherman Oaks, plans next month to unveil its third "campus enhancement plan" in nine years. Neighborhood groups opposed earlier plans in 2004 and 1997 because of traffic concerns.

And several new schools have opened to meet growing demand, including Sierra Canyon School in Chatsworth, Vistamar School in El Segundo, and Oaks Christian School in Westlake Village.

"There's a keeping up with the Jones' mentality right now," said Jim Skrumbis, head of Sierra Canyon School, which has classes for grades nine through 12. "The economy is healthy and these schools are raising more money than they ever have, so every school is in this rush to improve their facilities."

Educators attribute the growth of private schools to several factors: Los Angeles' population growth, an explosion of affluent families, competition for spots at existing private schools, and a general dissatisfaction with the Los Angeles United School District.

At the same time, parents are clamoring to get their children into college preparatory schools, many of them religious in nature. Nearly half of the schools that have filed applications to expand are Jewish Orthodox.

On a cultural level, competition to get in to private schools has become so stiff that second graders are taking tours of high schools, and some administrators find themselves writing letters of recommendation for 4-year-olds.

Thomas Hudnut, Harvard-Westlake's headmaster, said the problem in Los Angeles was not so much the LAUSD school system, but the perception that public schools are inferior.

"I lament that so many people think they have to flee the public schools," Hudnut said. "There's nothing magic about a private school that makes them good, and a public school bad. There are good public schools. But this is a contagion that has spread and proliferated."

While there are no statistics to determine whether private schools in Los Angeles will have a big jump in enrollment following years of renovations, Mimi Baer, executive director of the California Association of Independent Schools, based in Santa Monica, said it is likely.

"Our schools have had long waiting fists for a long time," she said. "Many could get bigger."

Tapping bonds

Skrumbis, a former senior administrator at Marlborough School in Hancock Park, said he was courted in 2004 to lead Sierra Canyon, and was intrigued by its "entrepreneurial spirit and business model."

The high school is tapping the municipal bond market to finance a new $40 million campus--one of the largest bond offerings for a private school in California. The ground-breaking is set for April.

Zions First National Bank, in Salt Lake City, is acting as an agent and has shopped around the tax-exempt bonds to eight banks and tour insurance companies.

"Private schools have tapped the bond market before, but not to the degree that they're starting to tap it now," said Skrumbis, noting that pricey California real estate and the new buildings are used as collateral on the bonds in the event of a default.

"It's a function of the demand that is increasing for private schools." said Sanje Ratnavale, a former venture capitalist and investment banker, who is Sierra Canyon's associate head of school. "The banking community has traditionally lent to higher universities. Now they see the stability of the cash flow of private schools."

Mellon Bank, in Pittsburgh, parent of Mellon 1st Business Bank, is working on two municipal bond projects for private schools in Los Angeles. Charles Goodwin, first vice president in public finance at Mellon Financial Markets, said many private secondary schools were built in the 1960s or 1970s and their buildings need reinvestment.

"There's a large technology component to new construction," he said. "Plus, it's cost-effective to go out to the public markets and get pretty attractive tax-exempt interest rates."

Of course, the process of building or remodeling a campus can take years, even decades. Many of the schools are required to stick to the terms of their conditional use permits with the city, which can place limits on expansion, and have tussled with local homeowners' associations that want enrollment flat.

However, Weiss so far has backed the schools' requests, which have their own intense support from alumni, parents of current students and even parents of prospective ones.

"I will support each and every one of these applications over any NIMBY objections from the neighborhoods," he said in a speech last month to the Westside Urban Forum. "It's just morally wrong in my opinion, to oppose schools in neighborhoods."

Victoria King, who owns her own public relations agency, is so concerned about competition at private campuses that she recently took her second-grade daughter on a tour of Marlborough School, an elite school for girls in the seventh through twelve grades.

"When you hear the statistics, you just wonder if there's enough space for all these kids," she said.

Pricey tuition

Rennie Wrubel, head of school at Milken Community High School, remembers getting a call from a former student who asked her to write a letter for her young daughter. "When you're writing recommendations for 4-year-olds, it's insanity--but everyone buys into it," she said.

However, Dr. David Ackerman, director of educational services at the Bureau of Jewish Education of Greater Los Angeles, said some of the rush to expand or remodel--at least by Orthodox schools--may simply be a function of the area's limited availability of affordable real estate.

When Yeshiva University of Los Angeles Girls' School, known as YULA, built a $6.5 million campus in 2004, the school vacated its old building on Beverly Boulevard, prompting Bais Yaakov School for Girls to quickly move in and do its own remodel--a sort of chain reaction.

"Part of what you're seeing is simply schools that may have wanted to do something about their facilities for a long time," he said.

New Roads School in Santa Monica, a spin-off of Crossroads School, is breaking ground this summer on a $46 million campus that will be named the Herb Alpert Educational Village.

It will combine the institution's elementary, middle and high schools with a building for the New Visions Foundation, created by Crossroads' founder, Paul Cummins. And it will be paid entirely by non-profit foundations. More important, the new campus will increase enrollment by nearly 26 percent to 650 students.

"Every year there are more and more applicants," said Head of School David Bryan, who acknowledges the $22,000 a year tuition is "expensive."

Milken Community High School, itself in an expansion mode, saw demand being driven by a gap in how wealthy parents perceive the quality of public versus private school education, Wrubel said.

"It's startling how people view the public education system in Los Angeles," she said "LAUSD spends about $6,000 a year per student and private schools are spending $22,000 per student or more. The culture in California is that if you can afford it, you send your children to private school."