Peter Greene wrote in the Bucks County Beacon about the lucrative real estate deals that produce profits for charter schools. He reviewed the latest report from the Network for Public Education report Chartered for Profit II.
It would be easy to assume that charter schools are in the education business, but in fact, many charter school companies appear to be in the real estate business instead.
In its new report, “Chartered for Profit II,” the Network for Public Education lays out the techniques for running a charter for profit, even if it is nominally non-profit, including the use of real estate deals.
One of the most common techniques for running a charter school for profit is to have the non-profit company run by a for-profit charter management organization.
In some states, there is no need to keep those two companies strictly separate. For example, in North Carolina, the non-profit Torchlight Academy was led by principal Cynthia McQueen. The for-profit company hired to run the school was Torchlight Academy Schools, LLC, whose CEO was Don McQueen, Cynthia’s husband. In addition, McQueen’s daughter was hired as special education director, and their son-in-law was awarded the contract for cleaning services for the school.
Those kinds of insider deals can involve real estate as well; the left hand buys a building, and then rents it to the right hand. The NPE report outlines how Glenn Way, a former Utah legislator, set up a charter school empire in Arizona. He and his wife established the American Leadership Academy chain of charter schools. At the same time, Way ran several real estate outfits, including Schoolhouse Development, that built and developed charter school properties. Way, like many other real estate businessmen in the charter school business, was able to use his real estate business to collect rent from his charter school business—all of it paid with taxpayer dollars.
“When Craig Harris of the Arizona Republic asked Way if such profiteering from taxpayer dollars intended for children should be allowed, he responded, ‘It’s [charter schooling] no different than building a Walmart, CVS, or Walgreens.’”
Notes the report:
An investigation in 2018 by the Arizona Republicfound that Way’s real estate business collected roughly $37 million in taxpayer dollars passed through his ALA charter school chain.
Florida’s Academica is yet another example. The company is owned by real estate developer Fernando Zulueta, who opened his first charter school as part of a housing development he had constructed. He expressed no burning desire to get children a great education; he just figured a school would make the housing development more attractive.
Zulueta and his brother have launched what journalist Jessica Bakeman called “an empire of charter schools.” Their headquarters are the home address of over 100 active corporations linked to various family members. Within this maze of corporations, charter facilities are sold off in ways that allow one arm of the octopus to cash in on the sale while another arm keeps earning management fees for the school.
The Academica chain is rapidly expanding in Nevada and other states.
Please open the link and read the rest of this excellent review of an important study of charter profiteering.
Diane Ravitch's blog 
So interesting. Ray Kroc said the same thing about McDonald’s — it wasn’t in the restaurant business; it was a real estate company. I appreciate being shown the connection.
“As school finance expert Bruce Baker laid out a decade ago, the public can actually end up buying the same building twice and still not own it.”
Real estate has always been part of how charter schools make money with their numerous schemes to buy and lease properties at exorbitant rates. In urban areas with potential for gentrification, a selective charter school is generally part of the deal to ensure that the student population will remain mostly white near the new, upscale housing. In some communities charter schools buy old public school buildings for a nominal fee, renovate the building, sometimes with public loans, and open it as a charter school. The school building, once a public asset, is transferred into private ownership. In some cases the building is then sold for purposes other than education, and public is unaware that they have just been fleeced. Charter schools always put profits over student needs, but I doubt they are a big issue in Bucks County where about 87% of the population is white, and Upper Bucks County is home to the “horsey set.”
Pennsylvania needs to focus on convincing Gov. Shapiro that vouchers are worthless and very harmful to public schools, particularly rural school districts like those in the northern and western areas of the Commonwealth. Pennsylvania cannot afford to make another fiscal blunder by pouring more public dollars into a losing proposition.
I read in today’s newspaper that Destin, FL, is building its own charter high school. Residents of Destin had been sending their children to the Okaloosa Public Schools, but students had to spend forty-five minutes on a bus each way, and parents complained. They applied and were approved for a charter high school two years ago. The charter high school is currently in a leased building, but they are building a new high school to accommodate about 800 students. This charter school construction is funded through the Florida Education Finance Program in the same way as public schools in the school district. In other words public money will construct the building that will belong to a private owner.