September 19, 2021

Carol Burris: Charter schools are publicly funded–but there’s big money in selling them

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Writing at Valerie Strauss’s Answer Sheet at the Washington Post, Carol Burris walks us through a complicated bunch of financial shenanigans using a charter school operation to generate huge profits.

National Heritage Academies (NHA), the third-largest for-profit charter chain in the nation, is selling 69 of its more than 90 schools to a new corporation created just for the purchase. Charter Development Co., the real estate arm of NHA, will receive the payout from a sale that requires nearly $1 billion to finance. This massive transfer of public dollars into private wealth is running into some roadblocks, however, in NHA’s home state of Michigan.

Both Charter Development Co. and NHA are owned by J.C. Huizenga, an education reform entrepreneur who refers to himself as “the son of a garbage man.” His father was hardly the typical garbage collector, however. In 1971, his successful business joined forces with those of his cousin, H. Wayne Huizenga, to create Waste Management, a trash disposal company worth almost $64 billion today.

The sale of the 69 NHA campuses in seven different states, like the operation of Huizenga’s charter schools, is wrapped in secrecy, even though taxpayers have paid the mortgages for years.

According to the documentation provided to the Wayne County, Mich., Commission, which was asked to approve the deal for 15 schools, the buyer is Campus Partners 1, which describes itself as a Michigan nonprofit organization.

Campus Partners 1’s charitable tax-exempt status, however, has not yet been granted by the Internal Revenue Service. The corporation has no website. It has no records filed with the Michigan attorney general, which is a requirement for nonprofit organizations in that state. Its November 2020 articles of incorporation provide scant information other than an incorporation date and boilerplate bylaws.

The president of Campus Partners 1, according to the documentation given to Wayne County, is John Grant, who serves as general counsel to J.C. Huizenga and his interests. Campus Partners 1 will contract with NHA’s related Charter Development Co. for a facility maintenance contract and “ground lease” so that the buildings can continue to be a cash cow for the for-profit organization. While ownership may technically change hands for the cash-out, control will still be in the hands of NHA.

One might wonder what organization would loan $853,600,000 to a corporation of unsettled status that is less than a year old.

There’s more. Read the whole piece here.

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