"In the event the authorization to operate a Renaissance school project is terminated or expires for any reason, and no substitute or replacement owner or operator for that Renaissance school project has been approved by the state . . . [the] project shall revert to the board of education of the Renaissance school district," the new provision states.
"The Renaissance school district shall assume any outstanding debt used to finance the Renaissance school project."
The Urban Hope Act gives school boards in Camden, Trenton, and Newark the power to approve up to four of the public-private, charter-like projects each. To date, only Camden has invoked the statute, approving the KIPP Cooper Norcross Academy Renaissance project.
The debt provision replaced a controversial section that would have allowed for the issuance of bonds to fund Renaissance projects without voter approval.
But the change does not make urban education reform advocates feel any better.
"It's wholly inappropriate to saddle the district with the cost" of a failed Renaissance school project, said Ruth Lowenkron, an attorney for the New Jersey Education Law Center, which represents students in poor school districts and opposed the debt provision during the legislative process.
Sen. Donald Norcross (D., Camden), who sponsored the initial act, proposed the amendments. His goal, he has said, was to give Renaissance schools more flexibility.
Norcross was not available to comment Tuesday, but an official familiar with the decision-making said the debt provision was inserted to make sure a Renaissance project remained a school. Otherwise, if the project failed and went bankrupt, banks could convert the properties to noneducational uses, the official said.
In contrast, if a charter school were to lose its charter and close with outstanding debt, it would likely go into bankruptcy, said Rick Pressler, director of school services for the New Jersey Charter Schools Association.
"Neither the state nor the local district will be responsible for charter school debts," Pressler said.
Charter schools - Camden will have nearly a dozen at the start of the new school year - are not allowed to use public funds for their facilities. Renaissance schools may use public funds for new construction.
KIPP Cooper Norcross Academy was the only one of four Renaissance applicants in Camden approved by the school board in November.
The Lanning Square project was created by a partnership of KIPP, one of the largest charter school networks in the country; the Cooper Foundation, the charitable arm of Cooper University Hospital; and the Norcross Foundation, established by the family of Norcross and his brother, George E. Norcross III, who is chairman of Cooper University Hospital, a Democratic leader, and a managing partner of the company that owns The Inquirer.
George Norcross' daughter, Alessandra, a director of the parent company of The Inquirer, is an officer of the foundation and a board member of KIPP Cooper Norcross Academy.
When the academy proposal was approved by the Camden school board, only Sara Davis voted against it, citing her support for the public school system. She remains on the board but could not be reached Tuesday.
The board, including three new members, was downgraded to advisory status as part of the state takeover of the school district in June.
A new state-appointed superintendent - expected to be named Wednesday - is to assume the powers of the local board and will answer directly to the state education commissioner.
While under state control, any debt incurred by the district remains the district's and not the state's, said state Department of Education spokesman Michael Yaple.
Most of the district's $326 million budget is funded by the state.
Asked about making the district potentially responsible for Renaissance school debts, Yaple said only that the state was "supportive of the first Renaissance school set to open next fall, and we're working in partnership with the school leaders to make that a reality."
KIPP Cooper Norcross Academy officials plan to open the school in 2014. The academy plans to eventually have five schools in its Camden project, including a high school, and enroll more than 2,000 students.
Susan Bass Levin, CEO of the Cooper Foundation, which is overseeing the facilities part of the project, said the Camden planning board approved the site plan earlier this month and backers hope to break ground for the project in late October.
Contact Claudia Vargas at 856-779-3917 or firstname.lastname@example.org, or follow on Twitter @InqCVargas. Read her blog, "Camden Flow," on www.inquirer.com/camdenflow.