Brooklyn Dreams Charter School

“Charter management firm charging huge rent markups to charter schools.”New York Post (NY), 4/30/2012

A for-profit education firm is soaking taxpayers by subleasing buildings to the Brooklyn public charter schools it runs at astronomical rates — including one at an incredible 1,000 percent markup, sources said.

While the city Department of Education leases buildings in Brooklyn for between $5 and $25 per square foot, the Michigan-based National Heritage Academies subleases to the charter schools it operates for roughly $38 to $45 per square foot, according to a review of public school leases by The Post.

For example, NHA is leasing a former school building on Parkville Avenue in Kensington from the Brooklyn Diocese for approximately $264,000 per year, according to a church source.

Yet the firm billed the site, the Brooklyn Dreams Charter School, $2.76 million for rent and related charges there last year — a 1,000 percent markup, financial filings show.

Critics say it’s part of the company’s MO: putting considerable money down to purchase or renovate properties, charging sky-high rents to recoup its investment — and eventually turning a hefty profit...

Most public charter schools get no funding for facilities, and mortgage lenders are wary of dealing with them because their charters are up for renewal every five years, supporters say.

“The bottom line is that if it wasn’t for NHA’s upfront investment in the real estate, the [Bushwick] school would probably not exist in private space,” [Cynthia Proctor, a spokeswoman for the State University of New York Charter Schools Institute] said...

The firm is one of the few for-profits in New York that manages all educational aspects of its charter schools, after being grandfathered in when state law abolished the practice in 2010.