Keystone Education Center Charter School

“Mercer County charter school executive director fined.” Pittsburg Tribune (PA), 3/26/2013

The Pennsylvania State Ethics Commission on Tuesday fined the executive director of a Mercer County charter school for leasing properties he and his family controlled for the school's use without board approval.

James Gentile, executive director of Keystone Education Center Charter School, violated conflict of interest rules, the commission said. It fined him $7,000...

From the 2006-07 through 2011-12 school years, the school paid $714,120 in leases for two Greenville properties owned by Gentile Enterprises, a company owned by Gentile and his family, without board approval, the state said.

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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.

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Horizon Charter School

“Rocklin Charter School Shuts Its Doors Amid Controversy.” CBS13 (CA), 10/16/2012

ROCKLIN (CBS13) – Six weeks into the school year a charter school in Rocklin is closing its doors. Four hundred kids were told Friday that their school would close, and Tuesday was their last day.

But many parents say the Horizon CEO is making up false excuses for why he’s closing the doors at Horizon’s Accelerated Learning Academy campus. Fired up families were fuming even more Tuesday over what many consider a lame excuse for the shutdown...

“How can you throw 400 families out?” parent Laura Daggett asked.

Horizon CEO Craig Hembichner spoke to CBS13 on Monday and said the urgent campus closure was all because of safety...

But the county told CBS13 its staff did not tell Hembichner he had to shut down anytime soon, not wanting to interrupt the school year.

The county staff also stated they have traffic congestion concerns, but again they say they never told Hembichner he had to shut down.

During a meeting with parents Tuesday night, Heimbichner spent the first 30 minutes of his presentation talking about the history of Horizon Charter Schools before someone finally stood up and yelled for him get to the point.

The angry interruptions became a common theme throughout. Some parents got so frustrated they walked out...

[Heimbichner] said he’s looking for a new facility and in the meantime the kids will have independent study from home.

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“Questionable lease led to Rocklin charter school shutdown.” News10 ABC (CA), 10/17/2012

ROCKLIN, CA - A regional charter school operator signed a 10-year lease for classroom space in a Rocklin industrial center, apparently unaware its new school was prohibited by the local zoning code...

A Placer County business license application filed by GroupAccess president William Brockmeyer in May 2011 claimed the space would be used as a "resource center" with no more than one employee and an average of five clients.

According to the Placer County Community Development Resource Agency (CDRA), the current zoning allows the resource center to legally accomodate 75 students at any one time, but not in a traditional classroom setting.

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Adelanto Charter Academy

“Adelanto Charter School’s Demise Involved Postmus & DeFazio.” San Bernardino County Sentinel (CA), 5/27/2011

ADELANTO—The Adelanto School District has revoked the Adelanto Charter Academy’s charter, based on a laundry list of operational shortcomings...

While charter schools are by law non-profit entities, it appears that those involved with the school in some cases formed for-profit companies that were devoted to providing the charter academy with materials, ranging from furniture to computers to visual aids to books to writing materials that were sold at inflated prices.

A similar circumstance developed with the failed California Charter Academy a decade ago...

Involved in the California Charter Academy debacle but avoiding indictment was former county supervisor and assessor Bill Postmus. Postmus was a member of the Snowline School District Board of Trustees that had granted the California Charter Academy one of its charters, was later a board member for the Charter Academy and in the heyday of the California Charter Academy was riding high as chairman of the county board of supervisors and the chairman of the San Bernardino County Republican Central Committee. He dictated the California Charter Academy’s hiring policy, insisting that Cox hire several of his associates and family members who had no real educational qualifications. And Cox and the California Charter Academy made political donations to Postmus campaign funds totaling thousands of dollars.

The Sentinel has learned that Postmus and two of his associates, John Dino DeFazio and Jennifer Ruiz, sought to emulate in many respects the California Charter Academy/Educational Administrative Services Corporation/Maniaque Enterprises/Everything For Schools operation.

... Ruiz, a former educator with the Hesperia School District, was registered as the Adelanto Charter Academy’s principal. DeFazio, like Cox and Honeycutt, created two corporations, Professional Charter Management Inc. and Educational Development Inc. Hidden in the operation was Postmus, who advised Ruiz in the set up of the enterprise.

Postmus, whose political career foundered in January 2009 when he was arrested for possession of methamphetamine and the hallucinogen Extacy, advised Ruiz to bill the Adelanto Charter Academy as one embracing conservative and Christian values to build character in students that were to be drawn mostly from impoverished home settings...

In November the audit was released. It showed the academy was plagued with fiscal mismanagement, poor or non-existent record-keeping, problems with the teacher to student ratios and unsanitary or unsafe food handling that put students at risk. Moreover, according to a summary of the audit put together by the Adelanto School District, DeFazio and others making money off the district were not providing what they were obliged to provide...

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 “Politicians & Their CroniesLooted Adelanto Charter Academy.”San Bernardino County Sentinel (CA), 6/12/2012

A number of current and former office holders, their associates and other politically connected figures, including ones currently facing charges in San Bernardino County’s corruption scandal, siphoned off money from the now shuttered Adelanto Charter Academy, documents obtained by the Sentinel show...

During the school’s operation, indicted and now convicted former San Bernardino County Assessor Bill Postmus, current Hesperia School District board member Anthony Riley, indicted former California Charter Academy founder Charles Steven Cox, Peggy Baker (Cox’s sister-in-law), San Bernardino County Supervisor Brad Mitzelfelt’s campaign fund, Mitzelfelt’s field representative Jessie Flores, indicted former assistant assessor Adam Aleman and indicted local businessman John “Dino” DeFazio all received money from the Adelanto Charter Academy or entities deriving money from the academy...

[More on California Charter Academy @ http://charterschoolscandals.blogspot.com/2010/05/california-charter-academy-60-schools.html]

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National Heritage Academies (huge rent markups @ NYC charter schools)

“Charter management firm charging huge rent markups to charter schools; Charters’ 1,000% markup.” New York Post, 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...

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.

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Mavericks in Education Florida LLC

“Mavericks High Schools Hope to Profit From Education – But at What Cost?” Broward-Palm Beach New Times (FL), 12/29/2011    

...This is Frank Biden, the brother of Vice President Joe Biden. He's here, at a ribbon-cutting event August 31, to promote the first Palm Beach County location of a local for-profit chain of charter schools called Mavericks in Education Florida...

But so far, Mavericks' lofty goals haven't materialized. Most of their schools graduate less than 15 percent of eligible students. On state report cards, the schools get "incompletes" because so few of their students are taking the FCAT. In Miami, two former teachers filed whistle-blower lawsuits alleging the Homestead school is inflating attendance records and failing to report grades properly.

Plus, there are rampant financial questions, cozy ties between Mavericks and local politicians, and a legal fight with former celebrity spokesman Dwyane Wade...

Mavericks' story begins in Akron, Ohio, with a wealthy industrialist who loved to wear big cowboy hats and donate millions of dollars to Republican politicians. In 1998, David Brennan launched White Hat Management. His charter schools were housed in strip malls, and the students herded in to sit at computers for three shifts a day. This was an education model Mavericks would later call the "next generation in education." But state auditors weren't so fond of the company...

One of White Hat's early leaders was Mark Thimmig. As CEO from 2001 to 2005, he helped grow the company into one of the largest charter school chains in the country. As of 2010, White Hat had 51 charter schools in six states, including ten charter schools in Florida called Life Skills Centers.

Two years after leaving White Hat, Thimmig alleges in court documents, he was approached by Palm Beach Gardens developer Mark Rodberg about launching a chain of charter schools here. Rodberg had built a few schools for White Hat, but had never run one before. He owned restaurants, including Bucky's Bar-B-Que in Boca Raton and Bucky's Grill in Fort Lauderdale. Together, Thimmig and Rodberg came up with a plan that was nearly identical to White Hat's: Students would attend school but take all their courses online, using virtual technology that required minimal maintenance. Classrooms could hold rows of cubicles with computers where kids would sit elbow-to-elbow. There would be no after-school sports teams, just "cyber-athletics" that allowed kids to play Wii instead of shooting hoops...

Each school is overseen by a local, nonprofit board. Mavericks in Education Florida LLC then charges the nonprofit hundreds of thousands of dollars in management fees to run daily operations. Mavericks also handles the real estate, charging the schools $350,000 a year in rent...

Hollander says the charters planned to use the basketball star [Miami Heat star Dwyane Wade] as a celebrity spokesman, encouraging kids to enroll in Mavericks and graduate. "Kids related to him. Parents related to him. Even grandparents related to him! He was the biggest celebrity ever to be connected with the national high school dropout crisis," Thimmig told New Times in 2009...

But pairing schools with a restaurant chain and a basketball star turned out to be a lethal mix. Wade would later allege in court documents that the partners were scheming to cut him out of profits. When they asked him to invest $1 million in the Aventura location of the restaurant, he refused...

In December 2009, Thimmig resigned as CEO. Then he sued Mavericks for back salary and money he said he lent the company — a total of at least $300,000. He also aired the company's dirty laundry in public court documents. Just two years after its founding, the hope factory was floundering...

... Only Michigan has more charter schools run by for-profit companies than Florida, according to a 2010 study published by the National Education Policy Center at the University of Colorado. Last year, there were 145 schools in Florida run by companies such as Mavericks.

Plenty of government grants help charters grow. Reports submitted to the state by Mavericks show their schools each receive about $250,000 a year in federal grants...

Often these schools struggle academically or financially, yet their management companies are allowed to keep opening new campuses...

Biden says, "We just graduated almost 200 people in one location."

But figures from the Florida Department of Education paint a vastly different picture, showing that Mavericks schools have a worse graduation rate than traditional public schools in Florida...

On Florida's state report cards, Mavericks schools in Miami-Dade, Pinellas, and Osceola counties have all scored "incomplete" because not enough students have taken the FCAT. Hollander says she expects the FCAT grade to change as more students enroll...

Meanwhile, recent lawsuits filed against Mavericks raise questions about whether any of the schools' statistics can be trusted...

Mavericks' paper trail is also troubling. Accountability reports, submitted by Mavericks to the state, contain bizarre financial figures...

Money has long been a problem for Mavericks. At the Fort Lauderdale Mavericks in June, independent auditors found the school met state criteria for a "financial emergency," with a net deficit of at least $520,000. At the same time, an audit showed that the North Miami Beach Mavericks was $400,000 in debt and had borrowed from the Mavericks management company to stay afloat. The state department of education also required the Mavericks school in Pinellas to create a financial corrective action plan...

...In 2010, Mavericks in Homestead paid the management company $418,000, or 17 percent of its state funds...

But most of the time, Mavericks isn't buying buildings. It's striking deals with private landlords, then charging individual schools rent of $350,000 per year for five years, regardless of the price of the building. That's the case in Homestead, North Miami, Kissimmee, and Pinellas. In Homestead, the school building's current market value is $1.2 million, but the school is on the hook for $1.75 million in rent over five years.

That sum, combined with its management fee, means the Homestead school paid 28 percent of its revenue to Mavericks in Education in 2010...

BE SURE TO READ THE WHOLE THING!

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“Joe Biden’s Brother Helping God Privatize Public Schools.” By Doug Martin, Firedoglake, 11/29/2011   

When Lisa Rab outed Joe Biden’s brother, Frank, as a major force behind a for-profit education management organization (EMO) dead set on building 100 new charter schools across Florida,* it came as no surprise to anyone who has been paying the slightest bit of attention to the corporate school reform movement, the Obama/Biden/Duncan regime, or Florida.

What was surprising was that Francis W. Biden told Rab that he and Mavericks in Education Florida, LLC  were on “a mission from God.”...

Not testing students to earn state ratings is nothing new to Mark Thimmig, one of the original founders of Mavericks in 2007. In 2005, after the former AutoNation official joined the notorious for-profit charter school operator White Hat Ventures, Thimmig took heat from the Ohio Department of Education for not adequately reporting student test scores in four of its Life Skills high schools. Also, the Akron Beacon Journal discovered that when Ohio switched testing from the 9th to the 10th grade, White Hat enrolled almost half of its Life Skills schools’ student body into the 9th grade in order to avoid testing these students...

READ THIS ARTICLE, TOO!

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Regis Academy

“Parish seeks to evict group.” CourierPostOnline (NJ), 3/16/2012

CHERRY HILL — A Catholic parish here wants a judge to allow eviction proceedings against Solid Rock Worship Center, a church that plans to host a controversial charter school at its Ashland complex.

Holy Eucharist Parish said Solid Rock continues to owe back rent under a lease-purchase agreement and that it has missed a deadline to buy the compound at Burnt Mill and Evesham roads. The parish says those actions violate an agreement the parties reached in June, about a month after Holy Eucharist sued for Solid Rock’s removal.

But Pastor Amir Khan, who leads Solid Rock’s 1,000-member congregation, says his church has received verbal approval for a mortgage that will satisfy its financial obligations. He said Solid Rock hopes to receive a written commitment for the loan shortly...

Khan has received state approval to operate a charter school, Regis Academy, in a former parochial school building at the site. Regis Academy, on track to open in September, hopes to draw students from Cherry Hill, Voorhees, Somerdale and Lawnside. It faces sharp opposition from school administrators and residents in those towns, who say Regis Academy would divert badly needed tax dollars from the local districts...

[Khan] said the site is more than the charter school. “We’re a church,” he said, noting about 85 youngsters also attend a private Christian school and day-care center. “We’re just excited that we’re finally going to get our mortgage.”

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More information about Regis Academy and Amir Khan at:

• The Tangled Web Behind Regis Academy's Approval 
• Three Strikes For Regis Academy Charter School; Separation Of Church And State,Enrollment Discrepancies And Skimming Students

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Prime Prep Academy

“Former football player’s charter school raised questions.” Austin American-Statesman, 11/4/2011

Last month, the state Board of Education granted its approval for two charter schools affiliated with former professional football and baseball star Deion Sanders to open next fall, in Fort Worth and Dallas. A review of recently released public records shows that early versions of the charter’s application contained two business arrangements that appeared to be designed to give school executives opportunities to personally profit off the school.

A spokeswoman for the Texas Education Agency said the suspect deals have since been removed from Prime Prep Academy’s application, after state officials investigated and confronted the school’s executives. Prime Prep’s executive director, Damien L. Wallace, confirmed that the specific contract deals had been excised from the charter’s application.

TEA, the agency that vets new charter schools, says it has beefed up its scrutiny of applicants in recent years. Several of the publicly funded schools have been revealed to be paying executives generous salaries, often through not-exactly-arm’s-length deals with side companies controlled by school officials...

Although Sanders’ name does not appear as an official executive for the school, his name does show up in the application, with his fame promoted as a benefit to the new school. “Deion Sanders’ powerful media presence has been utilized to bring more attention to the plans of bringing a charter school of this type to the DFW area,” the school’s application states.

In newspaper accounts, Sanders said he began thinking about founding a charter school approximately three years ago. Wallace said Sanders has been a personal friend and business associate for many years...

The charter school’s application also contained a “sales/marketing” agreement with a company called PrimeTimePlayer. Primetimeplayer.com’s website promises students help with mentoring and recruiting, and features Sanders’ photo. Incorporation documents filed with the Texas Secretary of State’s office list the company’s managing members as Damien L. Wallace and Chazma Jones — both of whom are also listed as executives for Prime Prep Academy.

The marketing agreement called for PrimeTimePlayer to be paid either $1,000 or $7,500 a month (the contract’s wording is unclear) for its services, as well as a percentage of any money it raised for the school; a 5 percent commission on all “special fundraising events” and a 10 percent commission on “all monies derived from corporate, local business and private donor sponsorships.”

According to the January application, the charter had already lined up commitments for about $200,000 in such donations, including $50,000 from Wal-Mart, $25,000 from Bank of America, and $50,000 from the NFL Network, a channel operated by the National Football League.

The school’s application also stated that Prime Prep’s Fort Worth school would be entering into a lease/purchase agreement for the building the school will occupy. The contract included in the charter’s application called for Prime Prep to pay $5,000 a month the first year, $7,000 the second, and $9,500 a month the third year of its occupancy to a company called Pinnacle Commercial Property Group.

Secretary of State records show the company’s directors as of May 2011 to be Damien Wallace and Chazma Jones.

Ratcliffe said TEA’s review staff also noticed the same contracts in Prime Prep’s application and brought them to the attention of the school’s lawyer. “Our lawyer went to their lawyer and said, ‘We have a problem with them doing business with themselves,’” she recalled, adding: “They didn’t initially reveal all the connections there.”...

There is another claim that has raised questions about the finances of the school. In July 2010, seven plaintiffs filed a lawsuit in Tarrant County District Court, claiming Wallace and Sanders had promised to market high school athletes to college athletic departments, but never delivered.

In the same lawsuit, the plaintiffs, led by Lawrence Smith, assert that Wallace and Sanders “made fraudulent and deceptive misrepresentations to induce Mr. Smith into investing money in a Charter School venture.”

According to the lawsuit, Wallace told Smith and others that if they invested $25,000 in the school, a “revenue sharing agreement” would pay them back $174,600, based on rent collected on a building at 4400 Panola Ave., Fort Worth — the same building in which Prime Prep’s Forth Worth campus is to be located, according to the school’s application.

A lawyer representing Wallace and Sanders declined to comment on the case; Smith’s lawyer, Don Stewart, said in court filings the defendants had denied his client’s allegations and were contesting the claims.

Ratcliffe said Prime Prep most likely will receive its final approval from the Texas Education Agency in a couple of weeks.

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“Deion Sanders’ new charterschool drawing questions about financial, academic plans.” The Texas Independent, 11/16/2011 

...While the board gave its go-ahead in September, SBOE member Michael Soto (D-San Antonio) wasn’t impressed by what he saw in Sanders’ presentation. “I have no idea what the applicant plans to do in the classroom,” Soto said before the vote, according to the Fort Worth Star-Telegram.

Since then, other questions have arisen about some of the school’s financial arrangements — deals that would help its top officials profit from the school’s fundraising and property rental...

The conflicts of interest were uncovered by TEA only after the SBOE approved Prime Prep’s charter, but Soto is concerned by the school’s “incredibly vague” academic plans, and told the Texas Independent he’s been getting concerned calls about the school.

Soto said he was unfamiliar, though, with another possible concern: that where Prime Prep’s plans do get specific about academics, the language is nearly identical to wording developed by some other schools.

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“The Strange Tale of Deion Sanders' Charter School; Coming soon in North Texas, a charter school built on star power.” The Texas Observer, 12/5/2011 

The State Board of Education approved eight new charter schools back in September, but only one of them came backed by the star power of Prime Prep Academy, with an emotional presentation by former Dallas Cowboys great Deion Sanders...

The most novel aspect of these charters, though, may be the private funding sources they'll depend on to round out their $10 million-a-year budget: not usual suspects like Bill and Melinda Gates or the Walton Family Foundation, but big brands Sanders has endorsed or worked with over the years, which he name-drops regularly when talking about the school.

Sanders says Prime Prep is a natural extension of TRUTH, a sports-and-study program he's run for the last few years, that has received money from many of these sponsors already. The school's leadership team told the state it had secured pledges from a few of those companies already, but when contacted, many said they hadn't, in fact, pledged money to the school—at least not yet...

What Prime Prep's leaders stress is unique about its plans are its emphasis on sports along with academics, its dedication to serving inner-city kids in low-scoring school districts, and, of course, the big money that Deion Sanders' friends at big brands will throw at the school...

The SBOE approved Prime Prep's application 8-4.

"We met with Direct TV, with Van Heusen, we met with Procter & Gamble, we met Under Armor, we met with the NFL on assisting us with in endeavors and they did a cartwheel," said Sanders.

In its charter application Prime Prep also listed $186,000 in donations that had already been pledged “upon approval of the charter school," including a pair from Walmart and the NFL Network worth $50,000 each.

But as enthusiastic as Sanders said they all were, most of the companies on the list told me this week that they never did pledge money to the school. The other three either didn't return calls or didn't have an answer ready...

Texas Education Agency spokeswoman Debbie Ratcliffe says Prime Prep’s list of pledges doesn't matter much to their application. “Even if a charter applicant says they have pledges for land or services from various corporations or entities, we don’t let them count that as revenue unless they have a signed letter from the donor.”

But while the SBOE grilled other applicants about where they'd be getting startup cash or grants to augment state funding, Prime Prep seems to be running entirely on star power. The only signed agreements in its application at first—a $1,000 loan from a Fort Worth real estate firm and a fundraising agreement with a group called PrimeTimePlayer—were dropped because Wallace and other school officials were aslo in leadership roles at the companies that stood to profit, as the Austin American-Statesman reported last month...

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Balere Language Academy

“Charter school building heads to foreclosure auction.” South Florida Business Journal (FL), 12/21/2012

The former home of a shuttered charter school is set for auction after Great Florida Bank won a $2.24 million foreclosure judgment.

The Miami-Dade County School Board voted in April to shut downthe Balere Language Academy after parents complained of house parties with alcohol and distasteful promotions.

The Miami Lakes-based bank (Pink Sheets: GFLB) won the judgment against nonprofit Balere and loan guarantors Rocka Malik and Nagib Malik over a $1.5 million mortgage, plus interest and fees. It was also awarded judgment against Strategic Empowerment for Economic Development Corp., which provided a $1.2 million second mortgage...

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“Charter school in adult-club scandal has money woes; A party promoterthat has been scheduling boozy bashes at a troubled Miami-Dade charter schoolhas ties to the school’s principal, records show.” The Miami Herald (FL), 0/13/2011

The “Push It To Da Limit: The Flossin Edition” late-night party is still scheduled to go off Saturday night — but it won’t be at a South Miami-Dade charter school, as previously advertised.

Miami-Dade School District officials on Friday were still trying to determine whether the Balere Language Academy — a charter school already facing financial free-fall and increased school district scrutiny — has also been doubling as an after-hours nightclub.

This week district officials learned of R-rated party fliers, featuring bikini-clad women and bottles of booze, promoting a bash at 10875 Quail Roost Dr. — the address of the South Miami Heights charter school. Older ads, Twitter posts, Facebook photos and a string of parent complaints about smoky smells and empty beer bottles on campus also indicated past parties were held at the school.

Balere’s principal and founder, Rocka Malik, told The Miami Herald on Thursday that she knew nothing about any after-hours parties at her school. But records show the party promoter is tied to Malik’s husband: A phone number for the promoter comes back to a car-wash company managed by Malik’s husband, Clifton Smith, who is also a director of a pre-school at Balere. Malik and Smith did not return phone calls on Friday.

This is not the first time the school has come under fire: Last fall, school inspectors discovered that nine seventh-graders were being taught in a wooden storage shed on campus, records show. “Students had difficulty putting their legs comfortably under the desks,” district inspectors wrote in one report. When interviewed by an inspector with Miami-Dade’s building department, Malik denied that the shed was being used as a classroom, records show...

The controversy comes as Balere struggles to stay afloat amid a barrage of problems. Among them:

• A lender filed a foreclosure lawsuit against the school in June for failing to make payments on a $1.5 million mortgage — one of four mortgages on the school’s six-acre property, records show.

•  Enrollment at the K-7 school has plummeted from 255 students last October to just 82 students today, records show.

•  The school’s revenue, which comes from public tax dollars directly tied to the number of students, has shrunk from more than $2 million in 2010 to just over $1 million today. As of February, the school owed more than $100,000 to the Internal Revenue Service for unpaid payroll taxes.

•  The school has lost two principals since January, and school district officials said they cannot identify the current members of the nonprofit school’s board.

School district officials threatened to close the charter school last year, after it received an F grade from the state based on poor student test scores on the Florida Comprehensive Assessment Test. But Balere appeared to make a dramatic turnaround when it raised its grade to an A this spring, winning the school a reprieve.

Yet Balere remains under scrutiny by the school district over its finances. The school had to submit a financial recovery plan to the district after two years in the red. District officials have questioned whether the school has a realistic plan to stay afloat...

District officials are now questioning how the school property is handled as well. The campus is owned by Balere, Inc., the nonprofit company that also holds the charter to operate the school. Yet Balere, Inc. leases the property to another school-related entity for $8,000 a month, according to a financial audit of the school...

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Academy of Arts & Minds

“Manuel Alonso-Poch Won't Fix Conflicts of Interest at His Charter School, New Audit Finds.” Miami NewTimes (FL), 12/27/2012

In June, a Miami-Dade School Board audit skewered a Coconut Grove charter school for an incestuous relationship with its founder and landlord, powerful attorney Manuel Alonso-Poch. It found Alonso-Poch was charging the Academy of Arts & Minds a suspiciously high rate for rent and had rigged its board to award contracts to his businesses.

Seven months later, Alonso-Poch is apparently still at it. A new report from the board's auditor, Jose Montes de Oca, offers evidence that Miami-Dade County Public Schools is all but powerless to address sketchy charter schools in the system...

In June, the school board found "conflicts of interest" at the school, including a "subservient" board whose chairwoman was Alonso-Poch's cousin and which also included his business partners. With the board's blessing, one of Alonso-Poch's companies won a $140,000-per-year food service contract; he also charged $860,000 annually in rent, a sum the auditor found "irregular."

The board warned the school could lose its nonprofit status without reforms.

Those changes haven't come yet, at least according to Montes de Oca... 

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“Audit Ordered For Coconut Grove Charter School.” CBS4 (FL), 10/19/2011

COCONUT GROVE (CBS4) – The Miami-Dade School Board ordered a forensic audit to be conducted on the Arts and Minds Academy charter school in Coconut Grove, where questions have been raised about school funding. A group of angry parents demanded the district to get involved.

The decision, reached Wednesday afternoon, will include a search for misappropriated funds, missing equipment, and possible malfeasance in following state rules set forth for publicly funded charter schools.

The district had already started an investigation into complaints students were charged illegal fees for required classes. Some parents also claim the school lacks teachers and books, and a failure of the school to conduct required background checks on employees.

“In the last six months, we have had two very experienced, well-liked principals that have left the school and cited issues with management.” said Sherri Myers, President of the Parent Teacher Students Association (PTSA) at the school.

At the center of the controversy is Manuel Alonso-Poch.

Alonso-Poch is the schools founder, owns the management company that runs the school, owns the food service company that provides breakfast and lunches to the students, and owns the building, collecting $77,000 a month in rent from taxpayers...

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“The Lima connection: How Coconut Grove charter school cuts red tape.” The Miami Herald, 10/12/2011

Whatever else in the way of criticism gets heaped on local school boards — God knows they catch hell — board members do tend to live in the general vicinity of the school district.

Which is to say, they don’t live in Peru...

Herald reporters Kathleen McGrory and Scott Hiaasen discovered that Jorge Guerra-Castro, nominally a member of the board overseeing the Academy of Arts & Minds, has lived in Lima (Peru, not Ohio) for the last six years.

Not that Guerra-Castro has knowingly ignored his responsibilities. Called by The Herald, he seemed taken aback when told that the charter school listed him as an “at large” member of the A&M board. Emphasis on “at large.”

“Very bizarre,” Guerra-Castro told The Herald. “I have no idea what’s going on.”...

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“Grove charter school board meeting video gives insider peek insidegovernance and debate of Florida Sunshine laws.” Watchdog Report (FL), 08/07/2011

A parent of a local charter school in Coconut Grove started in 2004 and run by the buildings owner Manny Alonso Poch filmed a governance board meeting and the discussion allows the public to get an idea of what and how some of the 80 plus such schools are governed in Miami-Dade in the public  sunshine. The Arts and Minds Academy Charter School has been a frequent topic of the Watchdog Report since the school first went through and its creation was approved by the nation’s fourth largest public district because of this “related transaction” as it is called when a facilities owner also runs the school. In this case, the rent for the building jumped back in 2006 from $29,000 to $69,000 and currently now when maintenance is included is well over $80,000 per month. The school while academically doing well has gone through four school directors and has been the object of stories in The Miami Herald and Miami New Times along with other blogs. Here is what was sent to me last week by the person that took the video. >>> “I have uploaded the videos of the last 2 A&M Governing Board Meetings. The first meeting on 7/14 was adjourned when they realized I was videotaping. I showed them the law, explained, etc and they did not feel comfortable going forward. On the meeting on the 28th you will find a lot of interesting footage. If you do not have much time, at least view the Q and A portion. You will get a kick out of it. It is funny as they do not even know who is on their Governing Board and it is only a six member Board. All of the videos are ready. You can click on the following link and then look at all of the videos that were uploaded. There are a total of 8 (2 for the 7/14 meeting and 6 for the 7/28 meeting): http://www.youtube.com/watch?v=bJjpx858p7Q You can also go to youtube and search aandmgbvideos and they will all come up. Videos 5 of 6 and 6 of 6 for the 7/28 meeting is the question and answer portion.”

>>> PAST WDR: MAY, 2011: Grove Arts & Mind Academy parents, in six page blistering letter to school district, light up school’s governance and criticize building owner and school founder Alonso-Poch

Parents of students at the Arts & Minds Academy located on Commodore Plaza in Coconut Grove fired off a blistering highly critical letter of complaint to the Miami-Dade Public Schools administration concerning how the charter school is being run and governed that seems to only benefit financially the building’s owner and school founder Manny Alonso-Poch. The May 2 six-page letter signed by the A&M PTSA Executive Board President Carlos Deupi and other senior board members and parents to Tiffanie Pauline, the Administrative Director of charter schools in the nation’s fourth largest school district. The letter details a long list of issues, including the fact that he owns the building the school is housed, and uses it for other activities including having his law office at the site. The school created in 2004 was flagged by the Watchdog Report back then because of the building ownership issue that is known as a “related transaction.” The original monthly rent paid by the school district was $29,000 but when it expanded in 2006, that same rent jumped to around $69,000 a month, and caught the eye of the district’s inspector general and the school board’s audit committee. Poch, an attorney, at a past school board audit committee meeting explained to audit board members why the new rent was fair, but his explanation did not fly and had audit board Chair Frederick “Buck” Thornburgh, an attorney noting there “was a lot of fairy dust in the room,” after the explanation he thought...

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“Coconut Grove charter school owner accused of bilking taxpayers.” Miami New Times (FL), 06/09/2011

Manuel Alonso-Poch isn't just one of Miami's best-connected lawyers and a major donor to bigwigs such as Miami Mayor Tomás Regalado and his daughter, school board member Raquel Regalado — he's also been trumpeted lately as the business-savvy savior of the long-threatened Miami Marine Stadium.

So what the heck is going on over at the Academy of Arts & Minds, the Coconut Grove charter school he cofounded in 2003?

The academy's Parent Teacher Student Association sent a searing letter last month to Dade officials alleging fraud and malfeasance, including a governing board made up of relatives and lackeys that pays Alonso-Poch inflated rent.

Alonso-Poch says the complaints are hooey: "For a group of misinformed, ignorant parents who don't trust anything to attack my hard work is very offensive."

He started the school from scratch eight years ago with his partner, Ana Renteria, and has built it into an "A" school focused on creative arts. Lately he has earned headlines with a plan to build a marine exhibition center next to the languishing, graffiti-tagged stadium on Virginia Key.

But some parents say they've uncovered troubling practices at the academy, including

• a "rubber-stamp" governing board that includes Alonso-Poch's cousin and numerous business associates;

• a lease that pays Alonso-Poch $86,000 a month for a building worth only $3.4 million;

• a lucrative food services contract awarded to his own company;

• tax returns that fudge the school's cash flow.

Alonso-Poch denies the charges and provided the school's financial statements. He says his governing board is independent (but admits his cousin holds one seat) and neither he nor Renteria makes money from the school.

The rent is fair, he says, and the food services contract went through a standard bidding process. "We happened to make the best offer," he says...

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Boston Renaissance Charter Public School

“State board places Boston Renaissance Charter School on probation.” Boston Globe (MA), 2/25/2013

MALDEN — State officials on Monday placed the Boston Renaissance Charter School on probation, formally putting the school on notice that it must improve student academic performance or risk closure when its charter comes up for renewal in two years.

By a tally of 7 to 1, the state Board of Elementary and Secondary Education voted for probation, despite pleas from Renaissance school leaders who fear the designation will unsettle families, hurt staff morale, and hinder fund-raising efforts...

Renaissance, one of the city’s oldest and largest charter schools, has faced the possibility of closing before. In 2007, the state placed the school on probation for poor academic performance...

Renaissance moved aggressively to fix its problems, and achievement improved. In ­December 2010, the state board ended the school’s probation.

But scores on the MCAS statewide standardized tests have been sliding since 2009, when 54 percent of students scored ­advanced or proficient in math and 61 percent scored in those two categories in English. By comparison, only 36 percent of students scored proficient or advanced last spring in math and 53 percent in English...

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“Opinion: Cheating - Charter Schools and Their Unfair Advantages.” Back Bay Patch 09 Jun 2011 

...Approaching the building, you would be forgiven for thinking you are actually entering a chic, private country club. The grounds are fenced in and accessed through a gated entrance. The renovated brick buildings look beautiful rising above the manicured lawns (fresh flowers have just been planted). There are many luxury vehicles in the parking lots; BMWs, Lexuses, a Range Rover. Off in the distance, blue-uniformed children play on a regulation-sized soccer field.

But, this is no country club, it’s a Boston public school - actually, a charter school. The Boston Renaissance Charter Public School recently moved out of its Bay Village home and into this $39 million, custom-built, three-building suburban campus in Hyde Park.

Meanwhile, parents in the North End have been pleading with the city of Boston for a larger school, seeing as their K-8 Eliot School, which lacks a gymnasium or playing fields, is bursting at the seams. The number of children living in the neighborhood has increased by more than 13% during the past ten years.

The Renaissance’s new 6-acre, 107,000 square-foot campus includes a multimedia center and a large interconnected complex with a gym, cafetorium, library, music classrooms, and dance studios. The school says it offers its students “a full range of educational, emotional, social, and health care” (including eyeglasses and dental care)...

The Commonwealth’s charter school program, controversial even now, was met with much suspicion when first proposed. In 1995, in order to get the nascent program off the ground, then-governor William Weld worked out a financial scheme to cover Renaissance’s start-up costs; a cheap lease and a low-interest loan. Four years later, the Commonwealth sold the building to Renaissance for just under $8 million, which the school paid for with additional funding arranged by the state.

Fast forward to 2006, when the Renaissance decided to move from Bay Village to Hyde Park. In 2008, the school signed an agreement to sell its existing building for $45 million. After using some of the proceeds to pay off debt and start renovations on its new campus, it was left short, so it again got help from the state, in the way of two tax-exempt government-sponsored bonds.

Of course, at the same time Renaissance was banking millions of dollars in real estate proceeds, it was receiving additional millions in state aid, money diverted from the Boston public school budget...

The Renaissance was able to build and open its school during a terrible recession only because of some clever real estate manipulation not available to your typical Boston public school...

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Indiana charter schools (real estate profiteering concerns)

CHARTER SCHOOLS AND VULTURES; April 18, 2011; The Journal Gazette 

When the Texas Board of Education reviewed the application for a charter school to be operated by Imagine Schools Inc., board member David Bradley had a question for company CFO Barry Sharp.

"So are you in the real estate business or the charter (school) business?" Bradley asked.

A great question. It's one the Allen County Property Tax Assessment Board of Appeals is asking, as well. Based on an Indiana Supreme Court decision from December, the board is reviewing the property tax exemption for the Imagine MASTer Academy in Fort Wayne.

In a review of the school's complex real estate arrangements, I came across a fascinating observation by Brent Van Alfen, who has advised charter schools on financing. He warns of the relationship between education management organizations like Imagine Schools Inc. and real estate investment trusts:

"There are many of these REIT/(education management organization) partnerships that remind me of a couple of vultures feeding off of an emaciated carcass."

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A TAXING TALE / COUNTY SCRUTINIZES CHARTER SCHOOL PROPERTY TAXEXEMPTION; April 17, 2011; Fort Wayne Journal Gazette (IN) 

The news about charter schools, their owners, and the money they make goes back to December to the state Supreme Court. In reversing a decision by the Indiana Tax Court, the justices ruled that a property owner doesn’t automatically qualify for a tax exemption even if property is used for a charitable or exempt purpose.

From that one decision, some charter school books are being opened in Fort Wayne. Taxpayers can learn where some of their tax dollars are going, and a lot of them leave the state and end up at a company boasting of attractive profits from a “reliable cash flow.”

A company is summoned. Based on that Supreme Court decision and a January memorandum from the Indiana Department of Local Government Finance, Allen County officials summoned JERIT CS Fund LLC, the real estate investment trust listed as owner of the Wells Street campus of the Imagine schools, to defend its property tax exemption…

The tangle of leases and subleases, for-profit management organizations, charter school boards and real estate investors involved in some of the state’s existing charter schools begs for transparency before more tax dollars start flowing out of state.

Statewide, a lot of money is spent. Taxpayers will spend more than $3.2 million in rent this year on just four Indiana charter schools. Most of the dollars are flowing to a Kansas City, Mo., real estate company that earned $84.7 million in profits last year. And while the Allen County board is scrutinizing the property tax exemption sought for the company’s property on North Wells Street, Entertainment Properties Trust can’t lose: Its triple net lease agreement makes the tenant – Indiana taxpayers – responsible for maintenance costs, utilities, insurance and taxes…

JERIT (see box on cover) bought the Wells Street campus from Schoolhouse Finance for $5.5 million – $2.6 million more than North Wells Schoolhouse paid the YWCA for the property just two years earlier and about $1 million more than its assessed valuation…

Steve Zacher, president of The Zacher Company, a Fort Wayne commercial real estate company, said in an interview that there was no market explanation for the rent increases.

“It seems like someone is making a killing,” he said. “People can get a fair return on their investment, but somebody is getting a way-above-normal return.”

Bryant appeared at the PTABOA hearing alongside Fink. He characterized the complex real estate deals as a means of leveraging investments to acquire more charter school facilities…

Why the court ruling matters. The Indiana Supreme Court decision that prompted the review might well result in the exemption’s being denied. A denial would set up the first test of the ruling. It holds that a property owner – not just the tenant – must demonstrate the property is owned for a tax-exempt purpose.

That could be a tough case for Entertainment Properties Trust (see box on cover) to make. In a video annual report posted on its website, the publicly traded company boasts returns to shareholders of almost 40 percent, citing public charter schools as a promising sector in a portfolio of specialty real estate that also includes megaplex theaters, water parks, ski resorts and vineyards…

Ohio is a laboratory for Imagine Schools Inc. Imagine Schools Inc. has become the largest charter school operator in the nation, with 73 schools. Policy Matters Ohio, a nonpartisan think tank, examined Imagine Schools’ model in a comprehensive report released last May.

“Schoolhouse Finance spent a combined total of $6 million to buy five Ohio properties that now house four Imagine schools,” according to Piet van Lier, the author of the report.

“Within 22 months of the purchase date for each property, Schoolhouse Finance has sold all five properties to one of three REITs for a combined total of more than $26 million. According to state audits and lease documents obtained through public records requests, the non-profit charter schools run by Imagine continue to operate under long-term leases with Schoolhouse Finance, paying hundreds of thousands of dollars in rent each year to the Imagine subsidiary.”…

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