In August of 2006, NC Senate Bill 2009, “an act to allow Capital Lease Financing for Public Schools,” was ratified. This new law allows school systems in North Carolina to enter into capital leases for school facilities. The law also provides the school system with the ability to enter into a variety of school facility operating agreements.

Once the school system has selected a developer for their project(s), they would enter into a pre-development agreement with the developer. In the predevelopment phase of the project, the developer would acquire land, design, permit, and bid the project(s). Once a lease price is determined, the school system would consider whether the lease is in its best interest.

If a lease between the school system and the developer is agreed upon, the developer will construct the project(s). The owner would not begin paying lease payments until occupancy. The school system would have the option to require the developer, as part of the lease, to provide energy usage guarantees, maintenance and custodial cost guarantees along with other guarantees and/or services as negotiated.