Peter Greene identifies the dirty secret of the charter industry. Two words. Real estate.
In Ohio, a charter lobbyist wrote the charter law for the state. When a charter operator insisted that he owned everything the charter bought with public money, the courts upheld him. It was in the law.
In Pennsylvania, charter schools own the property where the charter school is housed, and they charge rent. They charge rents above the market rate. The state doesn’t ask questions. The state doesn’t even notice that the charter operator owns the property and pays himself rent.
Greene offers a few examples from across the nation, and he didn’t even include Florida, where the charter scams are commonplace:
Carl Paladino, the notorious bad boy of the Buffalo school board, has made a mint in charter-related real estate deals. Not only does Paladino build the charters and lease them, but he builds the new apartment buildings near the shiny new school– a one-man gentrification operation. And he sits on the public school board, where he can vote to approve and support the growth of charters.
That’s not even the most astonishing sort of charter real estate scam. A 2015 report from the National Education Policy Center outlined what might be the worst. Take a public school building, built and paid for with public tax dollars. That building is purchased by a charter school, which is using public tax dollars. At the end of this, you’ve got a building that the public has paid for twice– but does not now own.
In February of this year, researchers Preston Green, Bruce Baker and Joseph Oluwole dropped the provocative notion that charter schools may be the new Enron. It’s a lot to take in, but Steven Rosenfeld pulled out five takeaways for Alternet, if you’d like a quicker look. But just some little factoids give you a taste. For instance, Imagine Schools take 40% of the money they collect from taxpayers and put that right back into lease agreements. In Los Angeles, owners of a private school leased room on their campus for a charter school that they were also involved in running– then jacked that rent up astronomically.
His article has links. Follow them. This is the most underreported story of the charter world: The big money is in the real estate, not necessarily the students.
Diane Ravitch's blog 
I am aghast rom this. So Betsy D really does know what she is doing, as does her Boss Mr. T Maybe the later stage to this would be the Russians buy our schools from these scammers and then control how all our children are trained to think. Nah! That couldn’t happen
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There are about a hundred Gulen schools. If Fetullah Gulen gets extradited to Turkey, what will happen to all the Gulen (Concept, Harmony, etc) schools?
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The scary part is under who’s administration/watch, these schools were allowed to flourish? The money trail is kept in secrecy and what political agenda is being covered up under the guise of an education for youth? There’s just too much mystery with the Gulen schools.
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I hold the lonely opinion that if the democrats want to recover from their losses—they need to start emphasizing just how important public education—especially teachers are. The democrats in congress should ask for all the details they can get about Gulen’s operation…and invite the republicans to help as much as they are willing. Some might…most would not want to bother.
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@Joe Prichard….that will never happen because there is much to lose from both sides. There is so much dirty politics being dug up that I fear the masses are going to revolt soon. The castle is already crumbling and every week brings a new “enlightenment” into the back room deals and bargaining by both sides. Public education will be collateral damage at best.
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Every time I receive something from the DNC or a DEM, I ALWAYS write and tell them: Support Our Public Schools and our Public School Teachers rather than using them as political leverage … $$$$$$ and backroom deals.
NO ONE ever answers.
The DNC and the DEM who wrote to me, just wants my money. I tell them that I am a public school teacher with a FIXED income and costs are rising. Like they care…NOPE!
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well, this should wake up some of those people who do not like having their tax money wasted by welfare cheats. I am sure they can work themselves into an equally energetic frenzy over the idea of billionaires stealing from them, too. Truthfully
…I am not 100% sure of that.
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Since these inflated cost leasing deals operate in the shadows, there is little public awareness of how taxpayers are being cheated. The complicit politicians are being paid to grease the wheels of these deals. There is little scrutiny because the charter lobby pays to ensure the politicians vote against any type of regulatory oversight or accountability. This is just waste and fraud that goes unchecked.
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If the public understood these real estate deals, there would be wide outrage.
But how many times have you seen these backdoor dealings explained in a widely read or viewed outlet?
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I wish ’60 Minutes’ or one of the other major news shows would expose these “organized crime worthy” dealings in the charter industry. Most of the media outlets these days tend to be owned by conservatives. John Oliver has been the most receptive of looking at charters through a critical lens.
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I don’t know. I haven’t heard a peep from anyone about the new property tax assessments that Utah taxpayers are getting, just for charter schools.
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“At the end of this, you’ve got a building that the public has paid for twice”
I’m not so sure of this. The public money that Charter uses to buy the public school property flows back to the school system which is selling the property. So the second payment is not lost, it returns to school board coffers.
Of course, if the price paid is below market, we have a scam of a different sort.
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I’m not so sure that the school systems own the buildings. I believe that education dollars are alotted to build new school facilities by the state and with certain bonds that are financed over time by the county. Counties only have to put up a certain amount. I think that the building becomes part of what the county owns….the sale of the building flows back to the county and NOT the school system. It’s all very confusing.
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It would depend upon the state in which the deal goes down*. In Missouri, each district owns it’s buildings. Each district is a separate legal entity from any town, county or the state.
*Wise advice: https://www.youtube.com/watch?v=HgpyFRwEWa4
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I’m going to move over some posts in the COMMENTS section:
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Remember four years ago when Chicago Mayor Rahm Emanuel closed 53 schools in one day?
Well, here’s a story about what’s happening to some of those schools.
For over a century, low income and minority students attended Stewart Grammar school, which was shuttered in that massive closing in 2013.
Check out this article, (everything that’s wrong with Rahm’s Chicago and his ed. policy summed up in one photo):
The conversion of the former Graeme Stewart Grammar School building being cut up into — and sold off as — upscale condominiums marketed as “best in the class” has been controversial. (“class”, of course, a pun on its former incarnation as a schools. This was also enabled by Arne Duncan, who years ago laid the groundwork for this outrage to come to fruition):
https://www.chicagoreader.com/chicago/stewart-school-lofts-uptown-controversy-upscale-apartments-james-cappleman/Content?oid=27360380
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“A shuttered Chicago public school promoted as ‘best in the class’ upscale apartments is a big fail”
By Ben Joravsky, The CHIGACO READER:
“Not everyone sees it that way, especially Wozniak, who lives in Uptown. ‘To me, this is Rahm Emanuel’s Chicago,’ she says. ‘We’re closing schools and turning them into private projects and disinvesting in neighborhood kids.’
“What really galled her was that damn sign.
” ‘I find that insulting to all the kids who went to Stewart and all the people who worked there,’ Wozniak says.
“More maddening still is that Emanuel earmarked $16.1 million in TIF dollars to subsidize the development of a high-rise apartment complex at Clarendon and Montrose—not far from Stewart.
“So once again there’s no money for our dead-broke schools, but millions for upscale housing.”
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And if turning a closed public school building into luxury condos wasn’t bad enough, how about turning one — or more specifically, its rooftop — into a fun singles’ bar and hangout for upscale milllenial Yuppies who are new to a neighborhood this is just starting to gentrify … a gentrification that is thanks in part to closing its own public high school where those millenials can now drink and mingle?
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“Makers” and “Makers-spaces”
There are a lot of such stories about the fate of closed schools — closed as part of a gentrification movement — with the empty buildings being re-purposed for that gentrifying neighborhood’s new upscale residents.
Peter, here’s one from your state of Pennysylvania.
There’s something really creepy about this story… as it’s about the intersecting clash of class and race and school reform and gentrification and… well… capitalism.
Two years ago, Philly School leaders executed a massive closing of schools, including Bok Technical School, an Art Deco school built by the Works Progress Administration in the 1930’s for working class Philadelphians. For 80 years, Bok Tech helped generations move into the middle class, and had one of the highest achievement and graduation rates for its working class demographic.
For eight decades, the now-closed school’s rooftop gave its low-income students a beautiful view of Philadelphia, so some developers bought up the closed school, then turned rooftop into …
“Le Bok Fin” ….
… an ultra-trendy bar / cafe for newcomers to this gentrifying neighborhood. These upper class and upper middle class hipster yuppies can now eat and drink and mingle there. Mind you, patrons have to walk through the abandoned school hallways to get to the hip place.
Anyone care to go slumming?
Protestors have been handing out fliers to people as they enter:
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“You’re eating and drinking at a beloved school that was closed against the community’s wishes.”
Here’s a positive portrayal of the transformation:
https://www.theawl.com/2015/09/the-hottest-bar-in-philly-is-a-shuttered-public-school
“The Hottest Bar in Philly Is on Top of a Shuttered Public School”
Look at the pictures. Upscale white hipsters wining and dining at the tragically hip site of a school that, until two years ago, served Philly’s black underclass.
Stuff like this is not for me…
(Ooops, the above link is dead, so you’ll have to use your imagination.)
Here’s a piece that is critical: (young urban professionals are not called yuppies, but “makers”, and gentrified spaces like this renovated high school are called “makerspaces.” Who comes up with this jargon, by the way?)
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“Why ‘Le Bok Fin’ Is Misguided and Wrong for the Neighborhood
“Ever since I saw that a Scannapieco, this time the offspring, had bought and was set to develop the former Bok Technical School into a ‘makerspace.’
“Le Bok Fin” will feature a French menu, and put the kitchen that used to train teenagers to use. I wonder how many of the neighbors will be able to afford a meal there. Even its name is a reference that most of the neighborhood won’t get–to possibly the most bourgeoisie restaurant ever in Philadelphia. I wonder how many nearby residents will even have the time, as time poverty is an issue that often gets overlooked.
“This under-served neighborhood needs affordable healthcare and childcare, ESL classes, business and finance classes in multiple languages, better jobs, living wages, technology classes, immigration services, and the such. It doesn’t need dog parks, a bus shelter for an alternate-route bus and a ‘living room.’
“And so (developer Lindsay) Scannapieco clearly hopes to usher in gentrification with her ‘makerspace.’ It’s a pretty easy conclusion when other Philly makerspaces are in Graduate Hospital and Kensington, both battlefronts in the gentrification war Philadelphia is currently waging again long-term residents.
“Furthermore, who are these ‘makers?’
“They’re young, white people–the sort who build start-ups and attend expensive, pointless pop-ups and don’t worry about the community that was already there.
“Will they invite in kids for free workshops (with meals provided)?
“Will they hire the community and train them for meaningful jobs, not just as janitors?
“Will they pay a living wage if they do?
“What will they do for parents and adults who are too busy to be ‘makers’?
“Is this a space for everyone, or a space for those privileged few who can afford myriad luxuries–the first of which might be the ability to be a “maker” in the first place?
“Scannapieco aims to build a community, but the community already exists. Taking a building that educated their children into the middle class and instead using it to showcase the very worst of the middle- and upper-middle classes in Philadelphia isn’t just tone deaf.
“It’s insulting, and it’s wrong.”
Here’s a Fox News-type that ridicules any such misgivings that working class residents have about cannibalizing a beloved 80-year-old school building, and turning it into a trendy upscale ‘makerspace’ bar & cafe—ignoring the pre-existing community connection to the school, and the school’s history in the process:
http://www.phillymag.com/news/2015/09/09/le-bok-fin-controversy/#QVD9PWiAR1EblfUR.99
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“Dear Le Bok Fin Haters: Quit Your Whining”
“Did you hear about the latest scourge of Philadelphia? No, it’s not the violence in the streets or the corruption and incompetence in public office or even the PPA parking nazis.
“It is [cue sinister music] ‘Le Bok Fin.’
“This ‘*controversy’ *is one of the stupidest things I have heard all year. And I hear a lot of stupid.
“The ‘activists’ are upset that all this activity is happening atop a shuttered school, even though Le Bok Fin had absolutely nothing to do with the school closing. They are griping that the neighborhood doesn’t need French food or a dog park (another disastrously progressive aspect of the development at that location). And they are horrified that a bunch of privileged white millennials are coming there to drink and stretch.
“In short, they have summed up developer Lindsey Scannapieco as an evil gentrifier, invading their neighborhood with her big, fancy ideas.
“If anybody wants to invade my neighborhood with a bunch of millennials and their rooftop yoga and rooftop French food, I will personally roll out the red carpet. In fact, Will Smith’s alma mater Overbrook High School is just around the corner from me. And since it sits on the top of a hill along Lancaster Avenue — you can see the skyline quite nicely just from the front seat of the car — it will have a killer view.”
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If you wish more detail on the “Le Bok Fin” debacle, watch this video that was made of the protests — referred to just above as “stupid” and “whining”:
Also, here’s another editorial opposing “Le Bok Fin”:
http://www.metro.us/ernest-owens/boycott-le-bok-fin-period/zsJoiq—XbbZjyUpx5qM6
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“Boycott Le Bok Fin,” PERIOD
“No conscious Philadelphian should find enjoyment in socializing atop a shuttered school.”
” … I care about Philly education and don’t take pride in seeing schools shut down, only to have them turned into more bars and crap we don’t need.
“What disgusts me the most about “‘Le Bec Fin'” is that it mocks the very nature of the school in which it feels fit to now colonial-ize.
“Sad fact: their namesake comes from one of the culinary programs formerly housed and offered in the now-closed school, and what the kitchen classroom used to call itself.
“How can anyone who cares about education reform and improving the city stand atop that roof and party knowing that the failure of a school produced this? It almost feels as though one is celebrating Columbus Day and forgetting that the holiday partially commemorates the genocide of thousands of native tribes.
“And for that reason, I’m asking Philadelphians to have no part in this insensitive developmental site.
“What next?
“Tea parties and macaroons where the MOVE bombing took place?
“The message this new venture is telling Philadelphia is that schools aren’t meant to save but replace for social hubs that can reminisce their glory days. If that isn’t rubbing it in the face of those former teachers, mentors, and alumni – then I can’t possibly imagine what else does.
“And let’s not act like it’s a community effort. The people attending are predominately white yuppies looking for another place to naively encroach their sentiments of innovation and cultural appropriation.
“What a neighborhood that housed a closing school needs are not yoga sessions, but smarter resource pools to prevent it from happening again.
“The city should start a better campaign to encourage developers and/or community organizers to find actual proactive ways to utilize such property outside of booze-infused recreation.
“We are starting to become a Brooklyn waiting to happen, and if that’s the case, I won’t be here long enough to see it unfold.”
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Last bit on *”Le Bok Fin” (there’s much more on this situation … just use Google)
(I included all of this because, as the twin processes of gentrification and school closings continue, scenarios like this will become more and more common … and it won’t be pretty.)
http://www.newsworks.org/index.php/local/essayworks/86080-fin-a-bad-beginning-for-bok-buildings-rebirth
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ALEXANDER KACALA:
“When I really think about what Le Bok Fin represents, I realize there is something wrong here.
“Millennials are dancing on the grave of a public school.
“This pop-up and what it represents is ill-advised. This is the first thing to take place at the building since it closed, and it’s a missed opportunity for the building developer, Scout Ltd., to do something important.
“What we have instead is some really bad PR. But that’s hard to avoid when gentrification is such a dirty, dirty word.
“‘To close a school and then a couple years later turn it into a bar, it’s a total slap in the face,’ Octavios Mitchell, a former student told the Philadelphia Inquirer. ‘Not only to the students, but to the community.’ ”
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The above piece also includes an interview with the daughter of the developer, conducted by the article’s author, Alexander Kacala.
Kacala seems skeptical of the developer’s claim that they are respecting and “paying homage” to the building’s history:
“Confusion was evident in Scannepieco’s voice when she spoke about the future of the building — which, it seems, is still anyone’s guess. And I’m not sure if she is really listening to critics. There seems to be a lot of deflecting and not enough absorbing (on Scannepieco’s part, JACK).”
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Here’s the absolute latest:
The Bok” — as the closed school building is not referred to — is filling up with tenants.
(“Le Bok Fin” has changed its name to “Bok Bart”, as the “Le Bok Fin” was the former name of the culinary class and classroom housed in the former Bok Tecnhical School … keeping that name was insensitive and rubbing it in the faces of the community and the former schools teachers, employees, and students) :
http://www.buildingbok.com/
Here’s more:
http://www.buildingbok.com/about/
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“A historic vocational school closed by the School District of Philadelphia in 2013, we are working to lovingly restore the building into a new, richly layered and constantly evolving center for creatives, small-businesses, non-profits, small-batch manufacturers and beyond.”
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In the FAQ’s, the developers, Scout, take pains to tell people not to hold a grudge against them —
“Hey, don’t get mad at us. We didn’t close the school. The politicians did.”
And then those politicians — “The School Reform Commission” — chose Scout to make good use of the building. That’s all.
*”We’re not the bad guys here.”
http://www.buildingbok.com/faq/
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“Did this building used to be a public school? Why is it closed?”
— “Yes, this building was Bok Technical High School from September 1938 until June 2013. In March of 2013, the School Reform Commission (SRC) voted to close the school along with 23 other schools around the city.
“For more information on these closings read the School District’s “Facilities Master Plan” here:
http://webgui.phila.k12.pa.us/offices/f/facilities-master-plan/
“Scout was selected to redevelop the building by the SRC in autumn of 2014 through a public auction process.
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I’m sorry if anyone thinks I’m posting too much stuff.
I’m doing so because the Bok debacle — and the Chicago Grammar School condo debacle — such closing-converting-then-reusing of school buildings is going to be repeated dozens — nay, hundreds, perhaps THOUSANDS — of times over the course of the next twenty years … so don’t say you weren’t warned!
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The story of MacDonald’s is that it transitioned from selling hamburgers and fries to leasing franchises and accumulating real estate. Of course corporate franchised charters will accumulate public schools and like MacDonald’s end up converting government property. Because franchising is where the money is.
Additional advantage of a corporate franchise is that it gets government loans and tax write-offs.
What’s not to like about privatizing public education for those seeking profit from the taxpayers?
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Hah…maybe McDonald’s wants to open a college/university and then people can be walking advertisements for McDonald’s.
It’s all so SICK. The DNC and DEMs “DISSED and BLAMED” Public Schools and Public School Teachers. This was done for political favors and $$$$$.
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They already have their own university. It’s called Hamburger University: https://en.wikipedia.org/wiki/Hamburger_University
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