Aurora Christian School students will get to attend classes in their current home on Sullivan Road this fall, school officials announced Friday.
The financially troubled school worked out a deal with its lender to lease the school for a year, while the two sides continue to work on a solution to the school's large debt, according to a prepared statement to from Collette House, the school's superintendent.
The school had set June 30 as a deadline for deciding whether to move classes somewhere else for the fall, if it couldn't be assured it would get to stay in the building the whole school year.
"We have all endured quite a bit of stress over the last few months, but we have grown in our faith! ... I truly believe that ACS is a family. We're not perfect, but we love each other through the good and the bad times," House wrote to parents.
In April, Fifth Third Bank sued the school over a $500,000 line of credit issued in 2009. The school used that credit to pay bills when income dipped, typically in the summer when tuition payments weren't flowing in. The bank contends the school has failed to repay almost half of that line of credit, which expired in March. The school also owes at least $18 million. It borrowed the money in 2004, via a bond issue, to buy a former newspaper distribution site on Sullivan and convert it to a high school.
It has since moved its preschool, elementary and middle school students to the Sullivan campus. The bond money also was used to fund some school operations. The collateral for the bonds included the school's buildings and land it owns on Deerpath Road near Interstate 88. Fifth Third issued a letter of credit at the time guaranteeing repayment of the bonds. But the value of that collateral has dropped -- from $33 million when the letter of credit was extended to $5.6 million today. The school had planned to repay the bonds by selling the Deerpath land to commercial developers, which fizzled when the commercial real estate market tanked.
Principal payments on the bonds are due in 2012.
It has to start repaying the principal on the bonds in 2012. "The school will never be able to pay off the loan based on the cash flow (of tuition and fundraising), and the bank knows it," financial committee member Nick Calamos told parents at a meeting in early June.