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Goldman to Lend $25 Million for Charter Schools

Take a look at who's involved in Local Initiatives Support Corp. Job possibility for Michelle?

As Juan Gonzalez pointed out in The Daily News, May 2010, Wealthy investors and major banks have been making windfall profits by using a little-known federal tax break to finance new charter-school construction.

The program, the New Markets Tax Credit, is so lucrative that a lender who uses it can almost double his money in seven years.

By Esme E. Deprez

Goldman Sachs Group Inc., the most profitable Wall Street firm, will lend $25 million to a nonprofit community-development organization to finance 16 charter schools in New York City and New Jersey.

The nonprofit group, Local Initiatives Support Corp., will make the money available to the school operators during the next two years, Goldman Sachs and LISC, both based in New York, said today in a statement. The chairman of LISC, according to the group’s website, is Robert E. Rubin, former U.S. Treasury secretary.

Charter schools are nonsectarian, public institutions that operate independently of local boards of education in the U.S. under special charters. Goldman Sachs’s Urban Investment Group has committed about $150 million for charter schools in New York and New Jersey, according to the statement.

"By funding this facility, Goldman Sachs ensures that thousands of low-income children will have access to innovative local schools that also help revitalize blighted neighborhoods," Michael Rubinger, president and chief executive officer of LISC, said in the statement.

The financing may allow the charter schools involved to obtain as much as $100 million in additional capital, according to the statement.

LISC raises money to support community organizations that work to revitalize urban and rural areas. The organization gives grants, invests money, and underwrites loans to low-income communities, and has provided $127 million in financing to 130 schools in the U.S. since 1997, according to the statement.

— Esme E. Deprez
Bloomberg
2010-11-09
http://www.bloomberg.com/news/2010-11-09/goldman-sachs-to-lend-25-million-to-nonprofit-to-fund-16-charter-schools.html

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