Charter school principals fired after questioning taxpayer money spent on school's real estate arm.

madfloridian

(1000+ posts) Send PM | Profile | Ignore

Thu Aug-27-09 09:23 PM
Original message

Charter school principals fired after questioning taxpayer money spent on school's real estate arm.

Imagine Schools are run by Dennis and Eileen Bakke. Dennis Bakke and his wife, Eileen, are members of the Fellowship, The Family. They are anti-union as well. Her cell in the Fellowship includes Grace Nelson, wife of Senator Bill Nelson. Hillary was mentioned as a member of that cell as well.

Dennis Bakke, The Fellowship, "Imagine" charter schools and their real estate arm, "Schoolhouse Finance LLC", how did we get here? The man who called public schools a "government monopoly" runs 18 charter schools in Florida. There are dozens of others in other states that are being questioned about using public taxpayer money to profit their real estate arm.

'Too many questions'

Bruce Greening, a former principal at Imagine MASTer Academy in Fort Wayne, Ind., said Imagine required him to pay $650,000 a year to rent a 28-acre campus valued at $3.4 million. But the school used only two buildings on the sprawling property, he said.

"Obviously, I thought the rent was kind of steep," he said. "But I had no choice, because it was part of the company's procedures. We couldn't go anywhere else."

Dallas Morning News

He was fired as was another administrator at the school.

From the same article...a principal was fired in a Nevada Imagine charter school ostensibly for asking similar questions.

Hugh Wallace knew accepting the principal's job at 100 Academy of Excellence in North Las Vegas presented a challenge. Eight months into the job, he said, he realized that nearly 40 percent of his state funding went to pay rent to Schoolhouse Finance. And the rent jumps a few percent each year, according to the charter school's lease agreement.

A nearby charter school unrelated to Imagine receives about the same state funding as 100 Academy of Excellence. But last year, it paid about 14 percent of its state funding for building rent, according to Nevada's education department. So Wallace said he asked his boss if the school's lease on the 50,000-square-foot building could be reduced.

"I was told to never ask about the lease payment or I would get fired," he said. "I was given a reprimand."

But Wallace kept asking about the lease and about Imagine's control of the charter school. Wallace said Imagine fired him in early November.

A blog called Schools Matter phrased it very succinctly:

Charter school leaders fired.

How would you like to send your child to a school paid for with tax dollars where the principal and another administrator get fired, and no one will tell you why? Were they molesting children? Were they stealing money? Were they harassing teachers? This is the new no-oversight reality of charter schools, brought to you by the market solutionists and the corporate socialists.

Here is the about page from their website.

At Imagine Schools, our mission is to help parents and guardians educate their children by creating learning communities of achievement and hope. We create and operate public charter schools with the goal of restoring vision and purpose to schools and returning parents and guardians to full participation in the education of their children. We devote ourselves to creating joy-filled schools in which all are valued, all are responsible for their actions, and all are working toward the common goal of student success.

Imagine Schools was founded in 2004 by Dennis and Eileen Bakke. The Bakkes are passionate about making a difference in education by implementing a unique operational structure that creates a dynamic learning environment, putting teachers and school leaders squarely in charge of the decisions affecting the schools they serve. All Imagine Schools people take responsibility for the success of their students and their school community. Dennis Bakke, co-founder and CEO Emeritus of the AES Corporation, a global power company, brings to Imagine Schools a distinguished business background, including a pioneering approach to creating a decentralized, highly effective organization. Eileen�s passion is mentoring teachers and creating a school culture that engages students in meaningful and effective learning.

There is a close Fellowship connection between the Bakkes and the Bill Nelsons, the Jack Kemps, the James Bakers among others.

When Clinton first came to Washington in 1993, one of her first steps was to join a Bible study group. For the next eight years, she regularly met with a Christian "cell" whose members included Susan Baker, wife of Bush consigliere James Baker; Joanne Kemp, wife of conservative icon Jack Kemp; Eileen Bakke, wife of Dennis Bakke, a leader in the anti-union Christian management movement; and Grace Nelson, the wife of Senator Bill Nelson, a conservative Florida Democrat.

Florida and The Fellowship

In an interview with the Washington Examiner Dennis Bakke called public schools a government monopoly. It is applying a business term to what was once a foundation of our country, a public education. The trouble is that language like that has worked and worked well. That language adds to the new ideas being tossed about that will allow children to be treated as products to be tested and tested some more.

Q: What is so broken within our public school system that charter schools stand a chance of fixing it?

Bakke: The major problem with our government-operated public schools is best understood by comparing the government monopolies that operate public elementary and secondary schools in this nation and our public university systems. The latter are considered among the best in the world. The former are generally considered very low on the quality scale. The major difference between these two education systems is that our elementary and secondary schools are government monopolies, while our colleges and universities compete for students. Students are assigned to most public K-12 schools and there is no significant competition for these students. The national result of monopolies in the private sector and the public sector is poor performance. Without the requirement to compete for students, there is little incentive for creativity, innovation, and the hard work or the long hours required to educate students and involve parents. Unlike the monopoly government schools, which exist whether parents like the schools� performance or not, only �good� charter schools that can attract students can survive.

Credo: Dennis Bakke

It's unreal that he can speak of our public school system that way, and that it is so well accepted. Florida legislators have welcomed Imagine Schools with open arms.

Who profits from for-profit charter schools in Florida?

"For-profit charter schools--or at least, charters run by for-profit corporations--are alive and kicking in Florida. Imagine Schools, the country's largest charter school operator headquartered in Virginia, already runs 18 charter schools in the state. On November 12, 2008, the company withdrew applications for 15 new charter schools in the face of recommendations for denial--though they plan on pursuing them later.

In the state of Florida, charter schools have more than one way of getting authorization. They first seek approval from the local school board. If their request is denied, they can appeal to the Florida Department of Education Charter School Appeal Commission, where they often have better luck. Before, if that still didn't work, they could get approval from Jeb Bush's 2006 brainchild, the Florida Schools of Excellence Commission, which had the authority (and a seemingly unquenchable desire) to authorize charter schools in most state school districts. In December of 2008, the First Florida District Court of Appeal struck down the statute authorizing the commission as unconstitutional, so for the moment, that recourse is no longer available."

...But it is not only in Florida that there have been objections to, and problems with, Imagine Schools. In Texas and Nevada, concerns have been raised about Imagine Schools' finances and complex real estate deals that have led to the charters spending up to 40% of their entire publicly funded budget on rent to for-profit companies, including Imagine's real estate arm, Schoolhouse Finance, leaving them with tight budgets for necessary materials like textbooks. In the interest of comparison, many other charter schools spend in the neighborhood of 14% of their public funding on building rent. The real estate deals, where the charter run by Imagine leases the building from Schoolhouse Finance, who then sells the property to a real estate investment trust who then leases it back to Schoolhouse at a lower rate than what the charter pays, have proven very lucrative for owners and investors in the two companies. Former Imagine School principals who inquired into the real estate expenditures were subsequently fired. But, naturally, they have also drawn sharp criticism from boards of education.

Could it be that Imagine Schools is applying for nonprofit tax-exempt status by shuffling the profits (from public funding, of course) into its real estate business? Given what has already transpired in Nevada and Texas, this seems very likely.

Big difference between 14 and 40 percent spent on building rent. Lots of empty big buildings sitting around Florida right now anyway.

So Florida communities may have to have charter schools even if they don't want them because the State Department of Education will approve them even if local school boards won't.

More about Texas, Nevada, Indiana and their troubles with Imagine Schools using public tax payer money to help fund their real estate arm. From Ft. Wayne schools:

Lease adds up at Imagine

This picture really got my attention. Through all my years of teaching I cleaned rooms, cleaned closets, even cleaned restrooms when custodians did not get around to it, cleaned the sinks in the room, bought my own cleaners and air fresheners, scrubbed desks, and so on. But never in a public school did I have to paint the room!

Cathie Rowand | Journal Gazette
Fifth-grade teachers prepare new classrooms at Imagine MASTer Academy, a charter school on Wells Street.

Charter school defends selling campus, renting it back

A Fort Wayne charter school is using state tax dollars to pay a for-profit landowner nearly triple in rent what it might have paid to own its campus outright.

Imagine MASTer Academy, on the former Wells Street YWCA campus, spends nearly one of every five dollars of its taxpayer-funded budget on rent to a real estate management company. Charter school-oversight officials in Indiana say the lease payments are on the high end of what�s recommended but appear acceptable. Ball State University, which monitors the Fort Wayne charter schools, said it�s closely watching � as it does all charter school budgets � to make sure the leases don�t creep much higher.

Similar real estate deals have come under fire in other states where the national charter school company, Imagine Schools, operates. But a local Imagine executive said such deals are necessary for the charter school company to invest in new properties.

Here is more about TX and NV tucked at the end of the article at the Journal Gazette:

Imagine�s Fort Wayne charter schools haven�t faced the same criticism as some other Imagine schools. Last month, the Dallas Morning News reported that Imagine has come under fire in Texas and Nevada for spending large chunks of its budgets on rent. An Imagine school in Las Vegas paid 40 percent of its budget on a lease to a real estate investment trust, the newspaper reported. The trust bought the school property from Schoolhouse Finance, Imagine�s real estate arm.

In Indiana, the high lease payments leave less money for Gov. Mitch Daniels� goal to increase in-classroom education spending.

�Especially when basic academic programs are lacking, it is totally unacceptable that 39 cents of every education dollar is spent outside the classroom,� Daniels said during his State of the State address this year. Daniels, along with the Obama administration and Secretary of Education Arne Duncan, has supported charter school growth. Daniels, through a spokeswoman, declined to comment for this story, citing a lack of information on the situation.

The governor of Indiana is not well enough informed to speak on the topic. He's just doing what Arne wants because that is where the money is.

Here is something from Susan Ohanian's blog about the real estate and education mixing.

Does Imagine Schools Inc. force its charter schools to spend too much money on complex real estate deals and not enough money on teachers and academic programs?

A national charter school company that plans to open new schools in Texas, including one in McKinney, has run afoul of an education official in Nevada and two of its former principals, and they all pose the same question. Does Imagine Schools Inc. force its charter schools to spend too much money on complex real estate deals and not enough money on teachers and academic programs? Virginia-based Imagine Schools has emerged as one of the largest for-profit charter school management companies, running several dozen schools in 12 states. It plans to open Imagine International Academy of North Texas in McKinney next year.

Charter schools house their students in Texas in a variety of ways, according to the former Charter Resource Center of Texas, from renting space in a shopping center to doing complex property transactions such as Imagine's.

Typically, after an Imagine-managed charter school gets approval to open, Schoolhouse Finance, Imagine's real estate arm, purchases a campus and charges the school rent. After the school begins to pay that rent, Schoolhouse sells the campus to a real estate investment trust, which then leases it back to Schoolhouse. The charter school eventually sends rent payments � in one case upward of 40 percent of the school's entire publicly funded budget � to two for-profit companies.

"The arrangement is very lucrative because it's a direct conduit to public funds. The school property is paid off with public funds," said Gary Horton, who oversees charter school funding for the Nevada Department of Education. Nevada's charter schools include Imagine's 100 Academy of Excellence in North Las Vegas.

School properties paid off with public funds. I'm confused, are those school properties considered private property by that group?

At last count 18 Imagine Schools in Florida are getting taxpayer money for their for-profit charter schools. That is my taxpayer money. My money is also sending approximately 30 to 40 thousand (hard to get the correct figure) students to private religious schools with vouchers.

When I hear the chants from the teabaggers and other assorted screamers about not wanting their taxmoney paying for someone else's health care, I want to laugh.

Perhaps they should consider where their taxpayer money is already going...in many cases to enrich the real estate arm of their charter schools.