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‘Gene’s Schemes’

Last of a two-part series: Growing the Kihei Charter School--creativity required.

December 6, 2012
Susan Halas - Senior Contributing Writer ( , The Maui Weekly

This is part two of a two-part series about the Kihei Charter School (KCS), the island of Maui's only public charter school. KCS is open to any public school child on the island by application. If there are more applications than openings, selection is by lottery.

Now 12 years old, KCS boasts an enrollment of 581 students in grades K-12. Despite its fast growth and outstanding academic achievements, the school is bursting at the seams and finds itself facing a crunch for space.

"Think outside the box" is a common refrain these days. While few ever take that advice, Gene Zarro embraces it.

Article Photos

Kīhei Charter School’s decentralized facilities are spread out in repurposed commercial spaces in Kīhei at the Kīhei Commercial Center and Līpoa Shopping Center (as shown above), with three additional classrooms leased from St. Theresa Church.

Zarro is chairman of the KCS governing board. He is also CEO of the South Maui Learning 'Ohana, the nonprofit organization which planned and founded the school and holds the leases on its current physical plant. The school presently leases approximately 30,000 square feet of space spread out over three locations in South Maui. Most of its facilities are currently in commercial space converted to classroom use at Lipoa Center and the Kihei Commercial Center. It also rents space from St. Theresa Church.

While the rest of Kihei has waited over a decade for a "regular" high school, Zarro and his board forged ahead and created one of the top performing public charter schools in the state. It's icing on the cake that per-pupil costs at KCS are far lower than the expense to run other public schools. But now, as the school seeks to further expand, it faces a variety of challenges.

At "regular" (so called "comprehensive") schools, facilities and maintenance budgets are separate from and in addition to instructional funds. For start-up charters like KCS, this is not the case. KCS gets a flat $5,900 per student allotment per year to cover everything. When all sources of income are added up, the total budget comes to about $4 million a year. The first million goes right off the top to landlords and utilities.

Now, he said, KCS is looking for more space, perhaps as much as an additional 30,000 square feet. In one of "Gene's schemes," they find it by leasing one or more existing buildings. In another scenario, they buy outright using attractive federal financing and leveraging their ability to make monthly payments. In a third projection, KCS and the South Maui Learning 'Ohana find an angel (or angels) who put up the land and/or cash and they build.

The current recession means there are many potential opportunities--lots of vacant space, low interest rates and many interesting proposals come floating Zarro's way on a regular basis.

"Face it," he said. "There's quite a bit on the market now that's selling for well below replacement cost--the cost to build it new."

"Ideally," he said, "our goal is to have a campus of the charter school open and available in every community on Maui, and that means expanding beyond Kihei."

On the record, Zarro was upbeat about the possibilities, which include the purchase of an underperforming mall, building from scratch on donated land, or negotiating occupancy in vacant property already owned by the state.

The KCS board has also considered going after international funds where special incentives are available to make U.S. investments that stimulate jobs.

They could also envision decentralizing further and adding additional leased classroom space in Central Maui, or even a combination of all of these options.

But "off the record," it's not quite that easy.

For one thing, after March 2013, Kihei will no longer qualify for inclusion in the U.S. Department of Agriculture's rural assistance loan program, which offers 100 percent financing and has been a lender of choice for many.

Another impediment is that so far, the powers-that-be in the Hawai'i public educational "food chain" have not (so far) smiled upon KCS.

While key players at the state Board of Education (BOE), such as Maui member Wes Lo, who chairs the BOE's facilities committee, are impressed with what KCS is doing, they're still not really convinced that KCS expansion trumps finding funds for the long-desired "regular" Kihei High School. Lo does think the board might develop a viable "interim strategy"--a way that both schools could go forward in a timely manner.

Lo is at least interested in KCS, and has requested a tour of the school and its facilities. The school hopes to show him around and update him on "what you get for what you spend."

Just eyeballing the numbers, the $10 million (or the equivalence) that KCS is seeking look pretty modest in comparison to the "regular" Kihei High School request for $160 million.

Whatever the sum, getting the attention of a BOE member is not the same as having a line item in the biennium budget. The Kihei High School has a line item budget appropriation proposed, and that large amount, according to Lo, is in the governor's projected budget for the second year of the next fiscal biennium.

Other key political players, who preferred to remain anonymous, see the long-promised but unfunded Kihei High School as "a higher priority" and were reluctant to discuss additional financing for the charter school at this time, though they were open to seeing what leases might be available for unused or underused state property.

But the fluctuating nature of the process doesn't seem to bother Zarro, who has seen the school grow and prosper in the past, despite the obstacles.

"Find a way," is his motto, and it seems to have worked thus far.

In the meantime, if any angels, landlords, property owners, Realtors and purveyors of good deals for built space that comes with realistic prices are interested in a long-term relationship with a steady cash flow, send Zarro an email at



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