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Shining Rock stalled on mobile classroom contract

fr SRCAShining Rock Classical Academy is considering legal action against a modular building company for not being able to honor its lease agreement with the charter school.

Shining Rock entered into a lease agreement with MSpace to provide it with several used modular classrooms to the tune of $360,000 paid out over five years. While Shining Rock has already given MSpace a $50,000 down payment for the buildings, the company is facing financial difficulties and might have to liquidate all of its assets. 

The pending legal proceeding for the company essentially leaves Shining Rock in limbo since MSpace can’t release any of its inventory at this time. 

SRCA board chairwoman Nancy East said she has been in contact with MSpace’s attorney and hopes to receive some definitive news soon on how the school should proceed. 

“The school initially chose to enter a five-year lease with MSpace because of their very long and successful history and also since one of our sister schools, Lake Lure Classical Academy (LLCA), had recently finished leasing the buildings they would soon obtain,” East wrote in a press release. “In addition, MSpace recently completed LLCA’s $10 million permanent facility.”

With grading work moving along as scheduled at the school’s future site on Dellwood Road and classes set to start in early August, time is of the essence. East said she asked MSpace’s attorney if purchasing the modular outright would avoid the waiting game, but she hasn’t gotten a response yet. In the meantime, the board needs to have a few other options on the backburner in case the MSpace lease doesn’t pan out.  

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“We’ve reached out to other mod companies to check on their inventory of used and new mods,” East told the school board at a called meeting Friday morning. “We have some promising leads on the horizon but we’ll know more next week.”

Tim Foley, a Team CFA representative on Shining Rock’s board, said in the best-case scenario it could take a month or more for a liquidation or bankruptcy case to make it through the court system. His recommendation to the board was to explore all other possibilities. 

“It seems like MSpace for whatever reason doesn’t have us high on their priority list — we need to make whatever noise we need to make to get their attention,” Foley said.

SRCA board member Torry Pinter said purchasing the units outright would be the easiest way around all the mess. But if the board doesn’t get an answer soon, he suggested going ahead and getting estimates from other modular companies.  Once the modular units make it to production, Pinter said the turnaround time is quick. If worst comes to worst, he said Shining Rock would be a few weeks behind schedule in getting them set up on campus. 

“I say get quotes from other vendors and then make a decision — tell MSpace they got 48 hours to put up or shut up,” said board member Mike Mehaffey.

After further discussion, the board voted unanimously to hire local lawyer Burton Smith to assist the charter school in dealing with the issue with MSpace. The board approved allocating up to $2,500 for Smith’s legal services but didn’t anticipate needing to spend that much before the issue is resolved. East said the board would also work on getting estimates from other companies. 

“The good news is we have other options that are affordable and meet our general scope of guidelines,” she said. 

If classrooms are not ready by August, East said Lake Junaluska might be able to find temporary space for their estimated 300-plus students. 

“Lake Junaluska’s leadership has been incredibly supportive since the school told them the news,” she said in the press release. “They are currently working out the details of adequately sized contingency space on the Lake Junaluska’s main campus, should they need it in August when school starts.”    

Getting a new charter school off the ground has been a challenging and expensive endeavor for Shining Rock board members. After being temporarily located inside the Wilson Children’s Complex at Lake Junaluska for its first year in operation, the school signed an agreement with the assembly to lease property across from the lake on Dellwood Road. The school will pay Lake Junaluska $45,000 a year to use the space but isn’t allowed to build permanent structures. 

Based on estimates from their contractor, site work needed to get the property ready for August will cost around $1.5 million, plus the cost of modular classrooms. Shining Rock has already paid out about $400,000 for grading, water and sewer and underground utility work.

Challenge Foundation Properties, an extension of Team CFA, has provided Shining Rock a line of credit for facility construction needs since charter schools don’t receive state funding for capital expenditures. Shining Rock is under the CFA’s umbrella along with other North Carolina charter schools, including Lake Lure Classical Academy and Brevard Academy. 

Shining Rock has spent money on two other potential school sites that didn’t work out. The school first had a lease on a piece of property on Ratcliffe Cove Road, but had to abandon it because of higher-than-expected costs to get the site ready. Shining Rock then had a purchase agreement on 32 acres of cornfield in the Francis Cove community on the outskirts of Waynesville but again had to abandon the site because of complications with a leaseholder of the property. The school was also denied a special-use permit by the town of Waynesville to place modular units on the property. 

“The school leadership remains very optimistic and has told their parents that Shining Rock will overcome this challenge, just as they have every other obstacle that has blocked their path,” East said. “While MSpace’s predicament was unsettling news to hear, it’s a surmountable problem with attractive alternative options. We have certainly faced bigger problems around our facilities in the past. We will continue to forge ahead and will hone in on the best solution very soon. We’ll get through this even stronger as a school family, just like we have in the past.”

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