Crain’s New York reported that New York City’s high-flying super-wealthy high-test-scoring Succes Academy charter chain bought up 11 plots in Jamaica, Querns, for $30 million as part of its expansion plans.

The charter chain previously bought property in the South Bronx for $105 million, to build a K-12 school.

Leonie Haimson, executive director of Class Size Matters wrote about these purchases:

Class Size Matters issued reports in 2019 and 2021 that showed the following:

  • In FY 2019, DOE overspent on charter lease subsidies by over $21 million compared to their legal obligation.
  • In several cases, the charter school rents charged to DOE appeared to be greatly inflated, including in cases where the CMO owned the buildings.
  • As of FY 2023, 81 charter schools are housed in 103 buildings owned or subleased by their CMO or other affiliated organization, charging DOE about $125 million per year.
  • For at least 34 of these schools in 39 buildings, DOE is paying entire cost of the lease rather than per pupil amount, totaling nearly $43 million in FY 2023 – and in these cases, it is unclear if the rent charged to DOE is inflated or assessed at fair market value.
  • More than a year ago, March 15, 2022, Senator John Liu, Senator Robert Jackson and CM Rita Joseph, sent a letter to NYC Comptroller Brad Lander asking him to audit the issue of charter rent as well as millions of dollars in missing matching funds for facility enhancements, supposed to be provided to public schools co-located with charters as required by law. Yet to our knowledge, no such audit has yet happened.

 

The issues mentioned below re New Markets Credits for charter school land acquisition and construction is another issue that the Comptroller should look into. I see New Markets Credits were used to convert a theater into the Brownsville Ascend Charter School Middle School as explained here.

 

We have a charter schools briefing here, that we’d be happy to provide to any CEC or other parent organization.We also drafted a charter resolution in opposition to raising the cap and for amending the charter law in many ways, including eliminating the obligation that DOE pay for charter rent or provide them with space in a public school, the only district in the country with this onerous obligation, as well as touching on many other issues.

Noah Gotbaum, a community activist, responded to Leonie’s post. He cited another article in Crain’s about a 70,000 square foot lease for Brooklyn Prospect Charter School,

…showing that the City’s obligation to pay rent for Charters with taxpayer dollars has become a boondoggle for private investors. “Investor appetite for charter school development has also grown, due to the long-term nature of their occupancy,” he added, citing the length of Brooklyn Prospect’s lease. Re Success, I wouldn’t be surprised if they are structuring the land purchase as a private investment, so beyond using city rent dollars to pay its private investors a healthy return, Success likely is also selling the New Markets’ Tax Credits to make even more money for its friends. Also could be getting the State on the hook to float tax exempt bond funding to pay for the construction. All while paying Eva Moskowitz over a million dollars a year through various different entities. Nice work if you can get it.