Just over two years ago, Universal Academy, a Texas charter school with two campuses in the Dallas area, made a surprising move.
In November 2020, a nonprofit foundation formed to support the school bought a luxury horse ranch and equestrian center from former ExxonMobil Chairman Rex Tillerson. The 12-building complex features a show barn “designed with Normandy-style cathedral ceilings,” a 120,000 square foot climate-controlled riding arena and a viewing pavilion with kitchen and bathrooms.
RELATED: IDEA Public Schools signed $15M lease for luxury jet despite being under state investigation
Last summer the Texas Education Agency granted Universal Academy permission to create a new elementary campus on the horse property’s manicured grounds. It will offer students riding lessons, according to a brochure, for $9,500.
Sales prices aren’t public in Texas, but the 100-acre property had been listed for $12 million when Tillerson, who also served as secretary of state under former President Donald Trump, bought it in 2009. Because of the foundation’s nonprofit status and its plans to offer equine therapy, the parcel has been removed from the tax rolls.
School board President Janice Blackmon said Universal hopes to use the facility to start a 4H chapter and Western-style horsemanship training, among other programs that take advantage of its rural location. “We’re trying to broaden the students and connect them to their Texas roots,” she said.
Splashy purchases like the horse arena are receiving increasing public scrutiny as charter schools continue to expand aggressively across Texas. Under state law, charter schools are public schools — just owned and managed privately, unlike traditional school districts.
An analysis by Hearst Newspapers found cases in which charter schools collected valuable real estate at great cost to taxpayers but with a tenuous connection to student learning. In others, administrators own the school facilities and have collected millions from charging rent to the same schools they run.
In Houston, the superintendent and founder of Diversity, Roots and Wings Academy, or DRAW, owns or controls four facilities used by the school, allowing him to bill millions to schools he oversees. DRAW’s most recent financial report shows signed lease agreements to pay Fernando Donatti, the superintendent, and his companies more than $6.5 million through 2031.
In an email, superintendent Donetti at DRAW said the property transactions were ethical, in the best interest of DRAW’s students and properly reported to state regulators. He said his school was “lucky” he was able to purchase the property because of challenges charters can face finding proper facilities. DRAW Academy, center, photographed Thursday, Jan. 19, 2023, in Houston.Jon Shapley/Staff photographer
Also in the Houston area, at ComQuest Academy Charter High School, the superintendent and her husband also own the company to which the school pays rent.
And Accelerated Learning Academy, a charter school based in Houston, is still trying to get a tax exemption on one of the two condominiums it bought just over a decade ago in upscale neighborhoods in Houston and Dallas. The school claims it has used the condos for storage, despite a nearby 9,600 square foot facility.
The battles between school districts and charter networks have become increasingly pitched, as they are locked in a zero-sum battle for public dollars.
Last year in Houston, about 45,000 students transferred from the ISD to charter schools, resulting in a loss to the district of a minimum of $276 million. That figure includes only the basic allotment received by the districts, excluding special education funding or other allotments.
In San Antonio, the two largest school districts are Northside ISD and North East ISD. More than 12,000 Northside students transferred to charter schools in the 2021-2022 school year, as did just under 8,000 from North East ISD. That means Northside lost at least $75 million, while North East lost $50 million, using the same basic allotment figures.
Each side cries foul about the other’s perceived advantages: charters are able to operate with less government and public scrutiny, while school districts benefit from zoning boards and can lean on a local tax base for financing.
Georgina Perez, who served on the State Board of Education from 2017 until this year, noted arrangements such as these would never be permitted at traditional school districts.
“If it can’t be done in (school districts), they probably had a good reason to disallow it,” she said. “So why can it be done with privately managed charter franchises?”
Lawmaker: ‘Sunshine’ is best cure
The largest charter network in Texas was a catalyst for the increased public scrutiny of charter school spending.
IDEA Public Schools faces state investigation for its spending habits, including purchases of luxury boxes at San Antonio Spurs games, lavish travel expenditures for executives, the acquisition of a boutique hotel in Cameron County for more than $1 million, plans to buy a $15 million private jet and other allegations of irresponsible or improper use of funds. The allegations date back to 2015 and led to the departure of top executives — including CEO and founder Tom Torkelson, who received a $900,000 severance payment.
Over the years lawmakers have steadily tightened rules for charter governance. A 2013 bill included provisions to strengthen nepotism rules; a 2021 law outlawed large severance payments. That bill was sponsored by Rep. Terry Canales, a South Texas Democrat whose district has some of the highest rates of charter school enrollment in the state.
“There’s a lot of work to be done for the people of Texas when it comes to charter schools,” Canales said. “Sunshine is the best cure for corruption. And the reality is it seems to be sanctioned corruption in charter schools.”
Considering the increased scrutiny, “It’s a myth that charter schools today are unregulated,” said Joe Hoffer, a San Antonio attorney who works on behalf of many charter schools. “Every session, more and more laws get passed.” If anything, he said, charter schools often have to jump through more regulatory hoops than local schools.
Yet acquiring property remains a gray area.
Diane Ravitch's blog 
When “Law” allows…
Equality under the law, is one
hallmark lesson, proven to be
false by reality.
Privilege, sanctioned by law
is the hallmark of aristocracy.
Seeking solace through fantasy
doesn’t work.
Fantasy: The institutional
mechanisms established by
the powers that be, were
established to limit the
powers that be.
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That is indeed a fantasy. Long ago, on these shores, wealthy Boston merchants and wealthy southern colonial plantation owners talked a bunch of people further down the socioeconomic ladder to fight and die to stop Britain from taxing them. And they said that this was about people being created equal. lol
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Let me try that again.
A New Birth of Freedumb, or Every Nation Has Its Foundational Mythology
Long ago, on these shores, wealthy Boston merchants and wealthy southern colonial plantation owners talked a bunch of people way, way further down the socioeconomic ladder from them to fight and die to stop Britain from taxing–guess who?–wealthy American merchants and plantation owners. They did this by claiming that the struggle was about people being created equal. lol
Then, when the surviving soldiers of the Revolutionary War returned to their farms, many of them found that the new government had placed tax liens on their homes and farms to pay off the money that the rich merchants and planters had borrowed from France to finance the war. So, after five years of privation and battle, they returned to find that the new government they had fought to create was taking their property. This led to Shay’s Rebellion, which the new government put down violently.
So, when you look around at the wealth and income inequality here in the U.S. today, remember this:
It was ever thus.
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They did this by claiming that the struggle was about taxation without representation and people being created equal.
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Charter people sometimes tell potential investors straight out, “We are not in the education business; we are in the real estate business.”
It’s in part a nifty means to use public funds to build private equity in big properties like school buildings.
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In some cases charter schools are given public building by cities or states. In other cases charter management companies lease buildings back to charter operators at exorbitant rates. Lots of times charter operators lease buildings back to other family members. There is a lot of profitable self-dealing in the charter industry and opportunities to hide profit while public school students suffer the loss of programs and funds. It is a ‘wild west’ of investing with very little oversight or accountability.
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Exactly, RT.
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In NYC, Success Academy owns buildings and rents or leases space at a high price. Win-win for them. It’s not uncommon among the for-profits to have the corporation own the building and lease space from itself.
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It’s very common for the CMO, owned by a private individual, to buy the building and then lease it at above his mortgage cost to the school. So, basically, taxpayer money is used to pay off the guy’s mortgage, with a little stipend each month on top, and at the end of it all, he’s the owner off a building worth tens of millions that he didn’t pay a dime for.
Nice little scam there.
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