Indianapolis Public Schools is working on a deal to bring the KIPP Indianapolis College Preparatory charter school back into one of its buildings starting next fall.

After leasing the space for a year, KIPP Executive Director Emily Pelino said she would explore forging a deeper partnership with IPS by becoming an “innovation school.”

If it does so, KIPP could be the first charter-district partnership under a law passed in March which granted IPS wide powers to make deals with charter schools or other groups to operate in its buildings. Under those arrangements, the schools get more autonomy than most IPS schools and can access district services like transportation or meal programs while the district can count student test scores in district averages and oversee their academic performance.

Unions objected to the bill, saying it created a uneven playing field for teachers when it comes to their bargaining rights. The bill permits the charter operators to hire teachers for the schools they run — even if they remain IPS schools — and disregard the district’s union contract when deciding what the pay and benefits will be.

In this case, KIPP would move its middle school for grades 5 to 8, and the staff it already independently employs, just more than two miles from East 42nd Street to the School 110 at 1740 N. 30th St. An alternative school for about 150 students currently housed in the building would move to a new site that was not announced at tonight’s board meeting.

It would be a homecoming for KIPP, which was housed in School 110 before moving three years ago when IPS decided it wanted to use the building again. Pelino said that was a motivation to return. For IPS, the district gets $14,700 a month in rent and the possibility of stronger future ties to the school.

“We have a lot of relationships with community organizations and families in that neighborhood,” Pelino said. “Fundamentally, it’s a win-win for both of us.”

She also said the size of School 110 would allow KIPP to expand. Her plan is to add a kindergarten next fall and expand a grade each year until the school serves grades K to 8. KIPP’s long term expansion plans are to add a second K to 8 building and then a high school by 2020.

IPS Superintendent Lewis Ferebee has expressed a strong desire to find partners to share school building space, as the district has many buildings with unused room.

At the same time, he wants to find new partners who can offer high quality options within IPS schools. KIPP earned a C from the state last year but was an A the prior year. It’s ISTEP passing rate is up almost 30 points from five years ago at 57 percent.

Ferebee said Tuesday the lease is designed so rent costs will jump 30 percent in the second year if the contract is not renegotiated. The goal is to give KIPP a reason to want to consider becoming an innovation school.

“It creates a little bit of an incentive,” he said.

Under Ferebee, IPS is pushing hard to expand and attract innovative school reform models to the district. It’s home grown Project Restore program, begun by two School 99 teachers, expanded to a second school last year.

At today’s meeting, IPS board members also discussed a memorandum of understanding it is expected to vote on next week formalizing an agreement with The Mind Trust to seek entrepreneurial educators to develop more school reform ideas.

The Mind Trust, an Indianapolis-based non-profit that pushes for educational change in IPS, is offering up to three educators a year off and $100,000 to expand ideas for improving schools into models that IPS might chose to employ at its most troubled schools.