The Metro Housing Board moved ahead on a plan to pay for the construction of a $25-million-dollar East Nashville charter school. It’s an unprecedented financing move that opens up the agency to risk by acting as both the developer and the lender for the project.
Jim Harbison, the chief of Metro’s housing authority, says the Explore school is critical to breaking up concentrated poverty in James Cayce, the city’s largest public housing complex. He called the school, run by the Martha O’Bryan Center, “the glue” that will hold a mixed income community together.
But MDHA Commissioner Melvin Black says the plan opens the agency up to too much risk and wastes precious affordable housing dollars. He was the only board member to vote against the plan at today’s meeting.
“My concern would be that MDHA being in the school business as opposed to being in the housing business,” Black said. “The dollar amount is something that we could use for housing rather than schools. I just think we’re sort of moving in the wrong direction.”
MDHA officials say the financing plan includes a $14.7 million loan from private investors, $5.3 million in federal tax credits and another $5 million that MDHA will pay at closing, but that Martha O’Bryan will repay through fundraising.
The fact remains, the plan puts MDHA on the hook for the building if the Martha O’Bryan Center can’t cover the debt payments, and to help them out the agency has pledged up to $3 million to cover any gaps.