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Appleseeds Day School was funded in part by CDBG Economic Development funds.
Owners & Sisters: Katie Rose and Kelly Standen as well as Marie Cappello, Executive Director of Rockingham Economic Development Corporation recently talked to CDFA.
What was at this location prior to Appleseeds?
Kelly – Empty space. We built here because it is in a central location. It is close to the highway, but we have trees around, so you still feel like you are in the country, but we are real close for commuting parents.
Why did you start the business?
Katie – I had been working in the field as a teacher and we both have kids. Kelly is an accountant and we both looked for childcare for our children and didn’t find anything that we liked. When we decided to start the business, we wanted it to be in a good place.
Kelly – Most of the places I looked at were old. They all seemed so institutional. As a consumer, if you have no other choice, it is a terrible place to be. The need for good care is huge. We can’t even take a lot of people – we take 100, but there is still a lot of need.
How did you figure out the financing?
Kelly – I am a CPA and worked on the business plan. One day I was at the beach with the kids and just so happened to sit next to someone from Rockingham Economic Development Corp. (REDC) I networked with them. I then dropped off the business plant to Marie Capello and she was an angel.
As an accountant, I wouldn’t have been able to do this without Katie because she has the daycare/childcare background.
Marie – They found me. At the time, they were working with one bank. But instead of just helping with the financing, we also critiqued the business plan, bank selection, and contractor selection.
The bank gets a sense of comfort when a subordinate lender like a Regional Development Corporation is involved in the deal. The daycare building is more expensive to build because of specialty items and codes and regulations. It gives the bank encouragement when a subordinate lender uses financing like CDBG for working capital and equipment.
How familiar with you with the CDBG funds that went into this project?
Kelly & Katie – Before this, we had never heard of CDBG financing.
With your access to traditional bank financing, why did you end up using CDBG money?
Kelly – We received construction financing through a traditional bank loan. We needed working capital and equipment money and traditional banking sources weren’t excited to fund these types of things. If we hadn’t gotten the CDBG money, we wouldn’t have been able to do it because we couldn’t have had start-up funding or equipment.
Would you have moved the project forward without CDBG money?
Kelly – I really don’t think so. It gave Ocean National a lot of comfort that we had the CDBG (CDFA) and SBA involved. Having two government programs gave the bank comfort.
Have you ever worked with REDC prior to this?
Kelly & Katie - No
Do you know much about revolving loan funds? Do you realize when you pay back the loan this money will go into other Economic Development projects in your area?
Kelly – It’s terrific. Now we are paying back the money, so others can use it.
Marie – The CDBG loan from REDC to Appleseeds gets paid back to us. The principal repayment gets paid to our regional loan fund for lending out to other area businesses for future projects. A portion of the repayment is used to support our operations.
Part of the money went for training staff through the College of Life Long Learning. How did this work?
Katie – The College of Life Long Learning came here on site and taught three four credit classes: Child Growth and Development; Fundamentals; and Environments. If people have twelve credits then they are able to become a lead teacher. We were able to bring in people that had a lot of experience with kids, but not the education part. We also brought in people that wanted to start in the field – it was an excellent opportunity.
Kelly – It was probably about $2,000 worth of training per employee in only a six month period. We did it after work on site.
Katie – At least 10 employees, which is about half, took at least some of the classes.
Marie – As an added value, we added the training piece to the funding. We set it up for the College of Life Long Learning to provide three four-credit classes. One of the classes is a state licensing requirement and the other two the staff chose. There were between 8-14 students that took the classes. We paid for the books, registration, and the class. They ended up with 12 college credits towards Early Childhood Education. The intention of this was to get them started.
What sets Appleseeds apart from other childcare providers?
Katie – I think the biggest thing is our staff. We are able to retain the best teaching staff in the area by paying them a little more and offering benefits. Having a newer building also sets us apart from most other providers in the area.
A portion of the jobs created were for low to moderate income people. Are the jobs at Appleseeds competitive with other area employers?
Kelly – We start teachers at $9/hr. We conducted a survey in the area and a lot of providers require employees to have the education and only pay them $9/hr. We start everyone at $9/hr, plus benefits.
Do you have a success story of an employee?
Kelly – We treat everyone as an equal in the classrooms. We have a single mom who had her child while in high school. We really got her started in the field. We gave her a job because she wanted to get a job that allowed half-off the cost for daycare for her child. She came in and took the classes and became a member of a classroom.
We have another employee who had no childcare experience and was working as a waitress. She took the classes and she is definitely a leader in her class. She has even taught a sign language workshop for the other teachers here. It was a six-week long workshop.
Katie – Yes, there is definitely room for advancement.
Would you consider using CBBG funds again or would you recommend them?
Kelly – Oh, definitely.
Are there any questions I haven’t asked, but you think people would like to know about?
Kelly – We employ 20 full time and 4 part time people. We are licensed for 100 kids, so we are able to get 100 people to their jobs. This is a critical service.
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