"A child's learning is the function more of the characteristics of his classmates than those of the teacher." James Coleman, 1972

Tuesday, May 04, 2010

"A Great Deal for Taxpayers"? Or, $$$ for EPT?

Dennis Bakke and his cronies at Imagine Schools are on the defensive in the wake of Stephanie Strom's excellent article. Here's the latest from the NY Times:

To the Editor:

We are appalled by your depiction of Imagine Schools in “For Charter School Company, Issues of Spending and Control” (front page, April 24). The true tests of successful schools, whether charter or traditional, are parent satisfaction and student achievement.

Why not spotlight the 37,000 Imagine Schools students who are learning character and leadership along with reading, history and math? Most students enter Imagine’s schools below grade level and make larger academic strides compared with peers in traditional schools.

Why not highlight the great deal for taxpayers? Imagine delivers a high-quality education for 70 percent of the money that schools run by the government spend. Why not feature satisfied parents? The fact that some at four schools were unhappy does not a trend make when most parents at 70 campuses are highly satisfied, most schools are full and over 90 percent of students re-enroll. This is the true measure of Imagine Schools’ effectiveness and success.

Dennis Bakke
Eileen Bakke
Arlington, Va., April 26, 2010

The writers are the founders of Imagine Schools.

The "great deal for taxpayers" that Bakke claims is actually a great deal for Entertainment Properties Trust, the owner of a number of Imagine Schools. On Monday EPT held a conference call for investors and published the transcript of the call (full thing available here):
In the first quarter of 2010, we continued to execute our plan of acquiring high quality properties in our two primary asset classes - theatres and public charter schools. Furthermore, our existing portfolio continued to demonstrate its resilience in today’s economic environment. I will discuss overall performance later, but first, I would like to discuss the major acquisitions for the quarter.

On January 21, we completed an additional investment of approximately $48 million with Imagine Schools. This transaction involved five schools with a cost of approximately $44 million, located in Florida, Indiana, and Ohio, as well as a commitment to provide approximately $4 million of expansion capital for two schools. The investment was structured as an addition to our existing master lease, which is tripled-net in design and pass a substantially all of the obligations for the expense and operation of the property to our tenant.
Mortgage and other financing income was $12.6 million for the quarter up $2.1 million from last year. This increase is due to our January 2010 acquisition of five public charter schools as well as increased real estate lending activities during 2009.
And you can hear the financiers drooling over the potential for more and greater earnings as Obama/Duncan's pro-charter stance opens up new markets for the morally corrupt, deep-pocketed crooks (off of our tax dollars, by the way):

Rich Moore – RBC Capital Markets

The same thing on the charter school side of things, I remember you had said I think Dave that you thought there would be 400 to 500 schools built a year. That gives you pretty good pickings for finding new opportunities. Is that accelerating as well?

Dave Brain [EPT President and CEO]

I don’t really have any statistics on 400 to 500. We know that’s been the run rate. My guess is that given the political climate it probably is going to pick up, but yes we are usually looking at things that have been open 2 to 3 years Rich, so it is still picking out of that pool that have established enrollments. It is a large opportunity set. The momentum is positive in the industry I will tell you.

As we discussed in our last call, our 2010 capital plan calls for additional investment spending of approximately $100 million, with the majority of that number targeted for the latter half of the year. I’m very pleased to report to you that we are looking at a number of significant opportunities that could materially accelerate this time frame. These opportunities exist for both theatre and public charter school acquisitions. However, as with previously anticipated transactions, we do not discuss specifics until we have a definitive transaction, or we are otherwise compelled to disclose it legally.
Don't you love that positive momentum and opportunities (translated as $$$$ for EPT) generated by the plan to privatize education and turn property over to Wall Street investors? Such a great deal for taxpayers, right Dennis?

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