A school should be the anchor of its community. It should be a place where children and families feel welcome, a place where they learn to work and engage with others who are different from themselves but share common concerns. A public school is a mainstay of our democracy, because for many people, it is the first place where they have a chance to learn and work with others to achieve their goals for their community.
But read this story, and what do you see? Two charter schools were sold to an eager investor.
Colliers International Education Services Group brokered the sale of two Florida charter schools totaling 134,000 square feet. ESJ Capital Partners and MG3 Developer Group sold the properties for $30.5 million to AEP Charter KCC II LLC and AEP Charter Renaissance LLC, entities affiliated with Portland-based Charter School Capital, according to public records.
The assets included in the transaction are the 105,002-square-foot Renaissance Charter School at University located at 8399 N. University Drive in Tamarac, Fla., and the 28,998-square-foot Kid’s Community College Southeast Riverview at 11515 and 11519 McMullen Road in Riverview, Fla. Charter School Capital’s facilities arm, American Education Properties, paid $22.3 million for the Renaissance property and $8.2 million for the Kid’s Community College asset.
SKILLED MANAGEMENT ORGANIZATIONS
Renaissance Charter School at University opened in 2012 and will serve 1,426 students in the 2017-2018 school year. Managed by Charter Schools USA, the building was built in 1982 and underwent renovations in 2015. Kid’s Community College Southeast Riverview opened in 2003 and is slated to serve 397 students in the 2017-2018 school year. It is independently operated by Kid’s Community College, a charter management organization that manages a total of eight charter schools serving Pre-K through high school.
As part of the acquisition, Charter School Capital assumed the existing 20-year leases on both schools, which expire in 2032 and 2033, respectively. Charter schools have enjoyed rising popularity in the state since their inception in 1996. The deal is indicative of the continued interest in educational-based real estate.
“We enjoyed working once again with ESJ and MG3 to arrive at terms that will give the charter school operators the peace of mind that comes in knowing their facilities are securely theirs to operate for years to come,” said Stuart Ellis, president & CEO of Charter School Capital, in a prepared statement.
Todd Noel, executive vice president & national director of the Education Services Group based out of Phoenix, along with Achikam Yogev, senior vice president based in South Florida, represented the seller in the transaction. ESJ Capital Partners is the manager of ESJ Real Estate Fund LLC and focuses on investing in charter schools and medical office buildings. Charter School Capital provides growth capital and facilities financing services to charter schools.
GROWING INVESTOR INTEREST
“Because of the complexities, charter schools have traditionally sold individually and rarely as a portfolio, but the continued interest in this asset class has paved the way for more creative strategies and more complex deals being done on behalf of our clients,” stated Yogev, in prepared remarks.
This isn’t the first deal between ESJ Capital Partners and Charter School Capital. The Aventura-based investment advisor sold a portfolio of five Florida charter schools in November 2016 to Charter School Capital in a $72 million transaction.
No surprise, it happened in Florida, where charter schools open and close with unsurprising rapidity. They are not the anchor of their community. They are exemplars of commerce and consumerism.
My reaction on reading this story: revulsion. It is stories like this that persuades me that the very concept of charter schools is wrong, especially when they operate for-profit and when they are part of a corporate chain. They are not about education; they are not about learning; they are not about children; they are about money and profit.
Allowing the education of American children to be distorted by this greedy industry is a blight on American society.
Diane Ravitch's blog 
The money “follows the child”. Well, with some stops along the way to pay brokers and investors and middlemen.
The money left over after the various adults take their cut follows the child. There’s now a thick, creamy layer of profit between “the money” and “the child”. A whole constellation of adults who make three figures in that small space between “the money” and “the child”.
When ed reform started in Ohio we were told they would get rid of those nasty, low class labor unions who were “self interested”. Only the purest lobbyists for us! Only the Best and Brightest!
They forgot the part about how they would be replacing one set of lobbyists with another.
Somehow lobbyists for government contractors are morally and ethically superior to lobbyists for labor unions. Higher SAT scores or something.
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Peter Greene has some comments on this very topic: http://curmudgucation.blogspot.com/2017/08/charter-real-estate.html
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Diane finds charter managers bundling real estate swaps and Peter notes the (unelected) managers are renting properties to themselves!?! That’s a bad combination. And governments are financing the investments. This is frightening. Are there Lehman Brothers lending to these Enrons? How big is this financial crime bubble? How many too big to fails are involved? Will someone please tell me I am wrong, and that these reports are just isolated incidents.
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I’d like to tell you you’re wrong. But I don’t like to lie.
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“Two words – charter schools. They are at the heart of the national debate over education. Education Secretary Betsy DeVos has made championing them a federal priority. But in reality, their fate is tied to state funding and local school boards. Recently, the most expensive school board race ever in this country took place in the second-largest school district in the country, Los Angeles, pitting pro-charter candidates against those supported by the teachers’ unions. The pro-charter candidates won the majority. And we have one of them on the line, Nick Melvoin. Welcome to the program, sir.”
True. It’s all they talk about in ed reform. Well, now they spend about 25% of their time promoting vouchers so there’s that.
Melvoin consistently denies this in interviews, though. That’s interesting to me, how ed reformers seem to believe that their identification as the “charter/voucher people” is somehow politically untenable.
Melvion goes out of his way to deny that he’s a charter advocate, yet ed reform promote him as a charter advocate. The national “movement” doesn’t align with how these people run locally. Why is that? Why aren’t they comfortable running on privatization locally yet promote it in DC and in the national lobbying orgs?
It’s like they know they wouldn’t win if they ran on what they plan on doing.
http://www.npr.org/2017/08/06/541877825/la-schools-and-charters
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This type of practice is an elaborate scheme to steal public assets. When we pay our taxes, most of us believe we are supporting the common good. Charter school chains use public funds to underwrite their investments. It is a socialized risk for them, but the profits are privatized. These properties should belong to the people of Florida, but charter real estate schemes allow companies to move this companies into a private portfolio. $72 million dollars in privatized profit will encourage more of these repulsive, crooked deals that allow vampire corporations to feed off public funds intended for public school children.
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retired teacher,
You are RIGHT! Thank you for your response. Those deals are indeed REPULSIVE and CROOKED. It’s all so SICK.
America used to be GREAT. Now ALL we do is GRATE.
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There is a hybrid model for charter school development. Real estate is only one part of it. It has multiple components.
The charter company has its own land acquisition arm, its own construction contracts, has a master architectural plan for the design of the school facility (K-8), has a “services” arm for front and back office operations, vendors for components of the preferred curriculum, managerial schemes for accountability and marketing, templates for outsourcing transportation, and a legal firm at the ready to draft very specific policies bearing on attendance, conduct of students and staff, and so on.
A school “district” for the charter school is informally defined by a specific recruiting area for students and by the availability of land for development. Development includes getting subcontractors for school construction, operation, and services such as meals and transportation. The charter school and its self-defined district may have more than one school and the charter district may overlap one or more regular public school districts (compete for those public school students).
Here is one example of the model, developed by Athlos Academies.
First, there is no special focus on low-income neighborhoods. The Athlos Leadership Academy operates in a north Minneapolis suburb that overlaps school districts for Maple Grove, Brooklyn Park, and Falcon Heights. All have relatively low poverty rates. In Falcon Heights the median home value is $323, 805. Maple Grove’s poverty rate is below 5%.
The governing board for the Athlos Leadership Academy is elected. The policy states: “Those eligible to vote for the governing board for the school are restricted to staff members, board members, and parents or legal guardians of children enrolled at the school. … Voters will need to show a photo ID in order to verify voting eligibility. ALA seeks school board nominees with professional experience in business, marketing, law, accounting, fundraising, education, and human resources. The ALA Board is comprised of community, parent, and teacher board members with professional expertise in one or more of the aforementioned categories.”
Second, the Athlos model clearly separates Management decisions from Governance. Governance for ALA means that board points to an issue and a law firm is contracted to write up a policy, citing any federal regulations or state statutes that may be relevant. “Thin” democracy works for the governance of the school. Management is everything else.
Third, in addition to marketing specific features of an Atlos curriculum (see below) the Atlos Model includes a full-service multi-stage package for starting a school.“ This includes everything from developing a charter application and building a facility, to school operations and educating students.”
A complete package of Athlos Academies services includes:
PRE-APPROVAL SERVICES: Charter application development; Authorizer approval assistance; Board governance training.
PRE-OPENING SERVICES: Site identification, Facility construction, Lease agreement, Board policy development, Board training and cultivation, Budget development, School launch, Staff professional training, Staff and student recruitment.
OPERATIONAL SERVICES: Bond market assistance; Research-based curriculum; Professional development; Website, email, social media, and marketing; Payroll processing and benefit management; Budgeting and financial management; Uniforms for purchase; Data reporting tools. https://athlosacademies.org/start-a-school/
Fourth, the Athlos charter model appeals to parents/caregivers who want a school that offers a “three pillar” program with an explicit focus on character education, healthy living and physical fitness, and academics.
Pillar One. The Character Curriculum is present in every grade. “Athlos Character is part of a formal, year-long curriculum. Our proprietary lesson plans identify 12 essential performance traits.” (e.g., Grit, Self-control, Optimism, Leadership, Social Intelligence, Courage, Focus, Integrity, and Humility ). “These concepts become part of daily academic instruction and athletic activities.” The traits are taught through “Character Huddles” where “performance attributes” are discussed in relation to student goals and other real-life examples. “Reflections” are re-teaching exercises lead by students. “These are the strengths and skills that social researchers identify with success—far more so than an academic GPA. And they act as the foundation Athlos Leadership Academy uses to point our students toward success.”
Pillar Two. The Athletic Curriculum is a fitness and health program—not training for sports, although some team sports are included for “fun” and to teach the virtues of team play and competition. The program is intended to support the Academic Curriculum, reinforce the Character Curriculum, and ”create good habits, improve skills, and promote healthy bodies.” This aspect of the program is marketed as essential for mental, emotional, and social well-being, not just for physical fitness and health.
Pillar Three. The Academic Curriculum. This will vary by state, with non-standard components and topics developed as needed. So far, the Athlos Curriculum Model is for Pre-Kingergarten to grade eight. I analyzed the curriculum components.
The curriculum is keyed to college preparation with one target, high scores on PSAT, SAT, and ACT tests. The curriculum uses Common Core resources in language arts and mathematics, along with vocabulary exercises drawn from Core Knowledge. Science modules and hands-on kits of materials were developed at the Lawrence Hall of Science, University of California. Traditional skills in cursive writing are part of the program.
I estimated that the instructional resources—some with scripted lessons, posters, worksheets, online digital materials—would require contracts for at least twenty vendors, some of these very well known, including Pearson, Prentice Hall, and Scott Foresman.
You can see that the facilities are designed as if for a suburban community and to compete with schools that taxpayers have financed. https://athlosacademies.org/schools-our-facilities/
The founders of the Althos Model are claiming to be on a social mission. The mission is market-based education with a full-service operation that prevents public participation in anything except supplying funds to combine with those of venture capitalists.
http://thecharterschoolfund.com/index.html
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