At first glance, the Ascend charter network in Brooklyn appears to have a pretty sweet deal. Three of its schools are located in the former Loews movie palace on Pitkin Avenue, a 130,000 square foot building that was renovated and reopened by a private developer in 2012 after decades of neglect.

The charter schools occupy most of the eight-story building. Their classrooms are filled with light, and the spacious hallways serve as art galleries with prints of famous paintings which the students can study as part of their humanities classes.

“It’s fantastic,” said Steven Wilson, the founder and chief executive for Ascend. “Of course, there’s money involved. We pay about 17 percent of our school’s revenues in leasing expense.”

Ascend is among the first wave of charters seeking to take advantage of a state law approved in April that requires the city to give charters free space in public school buildings or pay their rent. New York reimburses charter schools on a per-student calculation, about $13,500 a year, which does not cover capital costs like real estate. 

The former Loews movie palace in Brownsville now occupied by Ascend charter schools (Beth Fertig/WNYC)

James Merriman, who heads the New York City Charter School Center, said charters have been penalized because they got less public money than district schools whose building costs are covered. He said the law aimed to ensure the charter sector could expand.

The law got its first test this week, when Mayor Bill de Blasio agreed to provide public space to four charter schools. All of them were outgrowing space in public buildings or adding new schools. Merriman said the law also applies to charters that rent their own buildings. 

In Windsor Terrace, Brooklyn Prospect Charter School leases a building that used to be a Catholic school. It’s for middle and high school students, and will reach its full capacity in the fall of 2015.

Executive director Dan Rubenstein said there was plenty of space to accommodate everyone. Nonetheless, he applied to the city for public space.

“The question is not so much whether or not it’s possible to fit in this space, the question is the cost,” he said.

Eighth graders at Brooklyn Prospect Charter School's location in Windsor Terrace (Beth Fertig/WNYC)

Rubenstein said he knew it was unlikely there would be space in District 15 so he expects the city to deny his request, enabling him to appeal and collect rent instead. Under the state’s formula, that would come to about $2,700 per student – an extra 20 percent of what charters receive for tuition.

Like Ascend, Brooklyn Prospect claims it doesn’t raise much extra money to cover building expenses. Both schools they run lean operations, and would use any new money to pay for additional teachers, classroom supplies and electives.

The Department of Education will not say how many charter schools have applied to the city for space. The New York City Charter School Center estimated about 50 charters, in both public and private facilities, were eligible for public space. This means appeals for rent could add up quickly.

Under the new law, the city is required to cover the first $40 million in rent, with the state chipping in some of the money after that.