The Role Of Real Estate In The For-Profit Charter School Grift

One of the ways charter schools rake in the taxpayer dollars is through a variety of real estate grift. In this piece for the Bucks County Beacon, I look at some examples of how that game is played.

In its new report, “Chartered for Profit II,” the Network for Public Education lays out the techniques for running a charter for profit, even if it is nominally non-profit, including the use of real estate deals. 

One of the most common techniques for running a charter school for profit is to have the non-profit company run by a for-profit charter management organization.

In some states, there is no need to keep those two companies strictly separate. For example, in North Carolina, the non-profit Torchlight Academy was led by principal Cynthia McQueen. The for-profit company hired to run the school was Torchlight Academy Schools, LLC, whose CEO was Don McQueen, Cynthia’s husband. In addition, McQueen’s daughter was hired as special education director, and their son-in-law was awarded the contract for cleaning services for the school. 

Those kinds of insider deals can involve real estate as well; the left hand buys a building, and then rents it to the right hand. The NPE report outlines how Glenn Way, a former Utah legislator, set up a charter school empire in Arizona. He and his wife established the American Leadership Academy chain of charter schools. At the same time, Way ran several real estate outfits, including Schoolhouse Development, that built and developed charter school properties. Way, like many other real estate businessmen in the charter school business, was able to use his real estate business to collect rent from his charter school business—all of it paid with taxpayer dollars. 

Notes the report:

“When Craig Harris of the Arizona Republic asked Way if such profiteering from taxpayer dollars intended for children should be allowed, he responded, ‘It’s [charter schooling] no different than building a Walmart, CVS, or Walgreens.’”

An investigation in 2018 by the Arizona Republic found that Way’s real estate business collected roughly $37 million in taxpayer dollars passed through his ALA charter school chain.

Florida’s Academica is yet another example. The company is owned by real estate developer Fernando Zulueta, who opened his first charter school as part of a housing development he had constructed. He expressed no burning desire to get children a great education; he just figured a school would make the housing development more attractive. 

Zulueta and his brother have launched what journalist Jessica Bakeman called “an empire of charter schools.” Their headquarters are the home address of over 100 active corporations linked to various family members. Within this maze of corporations, charter facilities are sold off in ways that allow one arm of the octopus to cash in on the sale while another arm keeps earning management fees for the school. 

There’s much, much more. Read the full piece here.