Not News (But is News): Concerns Over Imagine Charter

The Riverside Unified School District is expressing concerns over Imagine's attempt to open a charter in the area. This was recently in the Press-Enterprise:

Resolution would oppose charter school

When it meets Monday, the Riverside Unified School District board will consider a resolution opposing Imagine Schools Riverside County's charter petition.

Imagine withdrew its charter petition in Coachella Valley after staff there identified reasons to deny it, according to the resolution in Riverside. Imagine now seeks a countywide charter but is still changing its proposal, the resolution says. The Riverside Unified petition expresses concerns about Imagine's plans to open a school within Riverside.

Update: More info about last night's meeting here. Imagine will open their first school in CA this year (Imperial Valley).

Richmond (NACSA) Hammers Imagine; Trouble in Texas

From Greg Richmond, outgoing President of the National Alliance of Public Charter Schools [CORRECTION: Richmond is President of the National Association of Charter School Authorizers] (via Edweek):

The award for the most breathtaking abuse in the nation surely belongs to Ohio. In 2006, the Ohio legislature enacted a law that allows a management company to fire the charter school governing board to which it supposedly reports and to replace that board with individuals who are more to its liking. This law turns the concept of accountability on its head. Yet the White Hat Management company is currently doing just that, taking action to remove the boards of 10 charter schools, presumably to prevent those boards from firing the company.

The chief executive officer of Imagine Schools didn’t wait for any state legislature to pass a law. He urged his staff to get undated letters of resignation from all board members and to remove members who didn’t behave to Imagine’s liking. "It is our school, our money, and our risk, not theirs," he wrote. He’s wrong. It is a public school, it is the public’s money, and the risk is being borne by thousands of parents and students who enroll at an Imagine school.

Ouch - that's the former head of the biggest pro-charter organization calling out Bakke.

That's not the only negative media attention Imagine received today. The Dallas News ran this story about Imagine's struggle to open another charter school in Texas:

Officials at the McKinney school, Imagine International Academy of North Texas, had planned to open its doors last August. That never happened, and it appears likely they won't open for the next school year.

Imagine International Academy's leaders and Texas Education Agency attorneys have quarreled since late 2008 over how the school would be run and its proposed contract with Virginia-based Imagine Schools Inc., the country's largest for-profit charter school manager.

The state has said that the contract isn't written in the school's best interest and has forced school officials to tweak the proposed contract. But the changes apparently haven't satisfied all of the TEA's concerns.

However, the charter school's website says it still hopes to open for the 2010-11 school year. If it opens, Imagine International Academy will be one of Collin County's first charter schools.

"We are presently awaiting final review of our charter documents by the Texas Education Agency," the website says.

...

But TEA's attorneys and its charter school administrators have repeatedly expressed concern about both schools' proposed contracts with Imagine Schools Inc. The charter school operator has been scrutinized by other state education officials and board members who question the company's control of its schools and how it spends public money.

Parents and trustees at Imagine's proposed Georgetown school voiced similar concerns last year. School leaders there later cut ties with the company.

Here's your third piece of Imagine news: the Marietta City Schools Board recently denied Imagine's attempt to renew their charter in the city (Marietta Charter School). Fear not: Imagine will now apply to the Georgia Charter School Commission. Recall that a number of districts challenged the legality of the commission, but a judge ruled against them.

Non-Profit, or For-Profit?

Dennis Bakke and his Imagine Schools management organization have responded to Stephanie Strom's recent NY Times article with a letter posted on their website. As expected, Imagine denies any wrongdoing and accuses Strom of biased coverage.

And, once again, Imagine denies they're a for-profit company and - once again - claims they're really, really close to getting 501c3 status (seriously, they've been saying this for AGES).

It was back in 2005 that Dennis was interviewed by the Washington Business Journal. In the interview, Bakke claims, "And we're close to converting to nonprofit status." But Dennis followed up that line with an equally perplexing statement: "I spent 20 years telling Wall Street that profit is not God, and now I'll probably spend 20 years in education telling people it's not Satan, either." [Imagine is registered as a nonprofit in VA; they still lack the federal 501c3 status. They're also registered as a corporation in DE with 60,000 shares as of 2008]

How you can claim to be converting to nonprofit status and then follow up that claim by supporting for-profit education is rather perplexing.

Imagine Settles Discrimination Suit

Imagine will continue to preach about their shared values of Integrity, Justice, and Fun, but there sure seems to be a lot of teachers, principals, and parents with an awfully different take on the culture of Imagine.

From Diane Stafford at KansasCity.com:

Charter school operator to pay $570,000 to settle pregnancy discrimination suit

Imagine Schools, a charter school operator in Kansas City, has agreed to pay $570,000 to settle a pregnancy discrimination lawsuit.

The Equal Employment Opportunity Commission sued the company in U.S. District Court in Kansas City, alleging discrimination when Imagine failed to retain two qualified employees who were pregnant.

The women were let go when Imagine closed its charter middle school in Kansas City and opened a private middle and high school, Renais

[And a bit more here]

Hillsborough County Rejects Illegal For-Profit Charters of Imagine, Inc.

From TampaBay.com:

TAMPA — By law, Florida charter schools are supposed to be organized or run by nonprofit groups with local roots.

On Tuesday, in a vote with statewide implications, the Hillsborough County School Board unanimously rejected an applicant that met precisely the opposite description, according to its attorney: not a legal nonprofit, and controlled by a corporation 1,000 miles away.

Representatives from Virginia-based Imagine Schools, which had hoped to open a 414-student school in Riverview next fall, hotly disputed the board's rationale. They said board attorney Tom Gonzalez was misinterpreting the state's charter school law.

"I can find you five attorneys for every one who holds his position," said Karl Huber, Imagine's state director of development.

But if Hillsborough is correct, 11 other Imagine schools in Florida could be operating with invalid charters, including schools in Pinellas and Pasco counties. Charter schools are authorized and funded through local districts, but set their own policies and programs.

. . . .

Company officials said the affiliate behind those schools, Imagine Schools Non-Profit Inc., is recognized in Virginia as a nonprofit group, but has not received federal nonprofit status it has been seeking since 2005.

But Hillsborough officials said company documents show Imagine would retain the power to nominate and dismiss those local board members, violating Florida's requirement that they be fully independent of charter management companies.

And even if its Virginia parent is nonprofit, said board attorney Gonzalez, the Riverview startup is registered as a limited liability company.

"That's the opinion of their attorney, that you can have a not-for-profit LLC under law," Gonzalez said. "I disagree."

Imagine has asked the Florida Department of Education to resolve that question, and to rule that all its previously approved charters be declared valid. Officials from the Pasco and Pinellas districts said they were satisfied their Imagine schools were operating as legal nonprofits.

But a Florida Department of State official told the St. Petersburg Times that he backed Hillsborough's interpretation.

"Under Florida law, there is no nonprofit LLC," said Jay Kassees, director of the Division of Corporations.. . ..

What Level of Corruption Is Required to Deny Imagine Schools, Inc. Another Texas Charter?

As the corruption of Imagine Schools, Inc. approaches legendary status, and with the major news media now on the trail, we must wonder what evidence of deception, manipulation, and outright lying will be required for the Texas School Board to conclude that the corporate charter schools are as infected with profit fever as any other corporate venture. Public money, no oversight, corporate bottom feeders. From Abby Rapoport for the Texas Tribune (my bolds):

State Board of Education meetings are a little like Austin City Limits — know where to look and there's sure to be entertainment. At this week's gathering, the most bizarre and controversial scenes won't be in the full meetings, but unexpectedly in the Committee on School Initiatives where two Imagine International charters will make their case to receive charter contracts.

The company has a history of contentious school management and questionable non-profit status — the charter school community's nightmare. . . .

. . . .The state board granted Imagine International Academy of North Texas a charter for a school in McKinney in 2008 despite the fact that Imagine did not hold non-profit status. Imagine representatives told the board they would use the nonprofit status of an affiliated charter school... in Indiana. This week, the company will have a chance to defend itself.

But is it actually out to make money?

Matthew Haag at The Dallas Morning News followed the strange story and explained the general business plan:

"Typically, after an Imagine-managed charter school gets approval to open, Schoolhouse Finance, Imagine's real estate arm, purchases a campus and charges the school rent. After the school begins to pay that rent, Schoolhouse sells the campus to a real estate investment trust, which then leases it back to Schoolhouse."

Imagine has become a major business force, with several dozen schools in 12 states — but the states aren't what you'd call happy customers. Newspapers in North Las Vegas, St. Louis and Fort Wayne all report various complaints about the system. According to its annual report, Imagine hopes to expand into South Carolina, California and Texas in 2010.

In the case of Nevada, the schools reportedly spent so much on rent that they struggled to pay for textbooks. In Fort Wayne, the Journal-Gazette reports that local control was effectively ignored by Imagine Schools, Inc.

Haag quoted Barry White, the company's chief financial officer, saying the company's real estate deals are "transparent" and the company's interest is in offering quality education.

According to Haag's research, the schools spend up to 40 percent of their state allotment — money per pupil that comes from the state — to pay for real estate. Two principals, one in North Las Vegas and one in Fort Wayne, claim they were fired for asking too many questions about rent. The schools all contract with Imagine Schools, Inc., a company based in Virginia, for operations. In Florida, several schools failed to open after local and state leaders complained about the out-of-state management.

In Texas, when the state board offered Imagine its charter, it wasn't without strings. The would-be schools have to conform to a list of requirements, which includes proving its nonprofit status. Since then, four of its five board members have quit, saying the company wants to run the schools and doesn't have regard for local control.

Thursday, Imagine will make its presentation to the board, as they also propose another school in Georgetown.

"They’re still working out some of their contingencies," said SBOE Chair Gail Lowe, who said she was eager to hear their side of things.

It should be a show worth watching.

Imagine Schools, Inc. Becomes Funnel for Public Dollars to Corporate Investors

On top of their commitment to establishing urban behavioral chain gangs that train up docile uniformed and uniform populations of black and brown children, the corporate school privatizers are even more keen on receiving regular transfusions from the three quarters of a trillion dollars that Americans spend each year on education for their children. The corporate welfare charter school system is the result, and there are over 4,000 of them now, with more on the way. Imagine Schools, Inc. could be the poster corporation for the kind brazen corruption and lying that the charter industry will be known for long after it has been strangled in its own sewer.

These corporate school mercenaries operate with little or no oversight, and CEO principals hire and fire at will--until they, themselves, are yanked by the corporate home office. When parents have a complaint, as they do now in Las Vegas after the third CEO in three years has been yanked without explanation, there is no school board to appeal to because outfits like Imagine Schools, Inc. operate outside the purview of any elected school board. And don't expect a straight answer from Imagine, Inc., especially since its employees like Pat Crain lie at public school board meetings even about Imagine's corporate status. Yet Secretary Arne Duncan, taking his marching orders from Gates, Broad and the Walton Clan, does not want any challenge to the corporate scripted "innovation" that miracle workers like Imagine, Inc. bring to poor children, and he certainly does not want to get in the way of the home office innovative hiring and firing of teachers or their CEO principals. The corporate model has come to school.

Imagine School, Inc., which now boasts 74 stores, er, schools in 13 locations, has recently partnered up with Entertainment Properties Inc., which will act as Imagine's property management arm and, thus, allow one partner to set the amount of rent that will be paid to another partner from public dollars received to run the schools. Perhaps this kind of corrupt siphoning of public funds has something to do with why Imagine Schools, Inc. is still waiting after 3 1/2 years for its application for non-profit status to be approved.

KANSAS CITY, Mo. — Charter schools, already seeing a surge in students, are getting attention from another group — private investors.

Entertainment Properties Inc., known mostly for sinking its money into movie theaters and wineries, recently bought 22 locations from charter school operator Imagine Schools for about $170 million. The real estate investment trust acts as landlord, while Imagine operates the schools and is using the investment to expand its chain of 74 locations.

"They really are an effective source of long-term financing that we can rely on and enables us to do what we're best at, which is running schools, and do what they're best at, which is long-term real estate ownership," said Barry Sharp, chief financial officer for Arlington, Va.-based Imagine. "It's a good fit."

. . . .

Focusing on large players who know how to operate schools, hire teachers and develop a curriculum, he said, provides the company a more dependable return.

"We're not speculators, we're investors, so I have to invest in property making money for me and my customers today," said Brain, whose trust oversees a $2.6 billion portfolio. "The charter public schools offer lenders/leaseholders a dependable revenue stream backed by a government payer. It's a very desirable equation." . . . .

Imagine, Inc. Charter Schools and Real Estate

The inherent fetidness of the charter school model is without parallel in the history of American schooling. As the economy continues to sink as a result of capitalist greed, our "leaders" continue to foist on the American people a scheme that epitomizes the corruption and reckless disregard that brought us the current Depression.

By MATTHEW HAAG / The Dallas Morning News
mhaag@dallasnews.com
The Texas Education Agency last week approved the opening of a McKinney charter school run by a company that other states rejected over concern about its tax status.

The Texas board of education allowed the for-profit Imagine International Academy of North Texas to run the school even though state law allows only nonprofit organizations to open state-funded charter schools.

Imagine argued that it would use the nonprofit status of an affiliate charter school in Indiana.

State officials said the Texas attorney general reviewed the arrangement and determined that it was allowable before the school was approved.

But school officials in Florida and Nevada have raised questions about other Imagine schools, saying they have not proved they are nonprofit and that public money should not flow into for-profit hands. The company has opened dozens of schools in 13 states.

Multiple calls to the Imagine Schools Inc. headquarters in Arlington, Va., for comment were not returned.

Florida's reaction
In Florida, Imagine intended to open 15 schools.

But the company met heavy resistance from local and state education officials, and withdrew its applications. Florida education leaders questioned whether Imagine was a certified nonprofit or a business attempting to profit from public education money.

"They cannot prove to us that they are a nonprofit. They do not have a 501c3," said Tina Pinkoson, chairwoman of Florida's Alachua County Public Schools, where Imagine applied to open a charter school this year. "They say they can prove it, but we won't believe it until they show us."

The school district's attorney, Tom Wittmer, voiced similar reservations to the school board.

The structure of the school in McKinney, and another campus approved last week in Georgetown, is similar to that of the proposed schools in Florida. According to paperwork submitted to TEA, the charters will use Imagine Schools Inc. for "the opening and ongoing operation of the Academy."

That means Imagine Schools Inc. would receive 12.5 percent of the per-pupil state funding, which is about $750,000 from each of its Texas schools, according to the TEA.

Monthly allowance
The charters would also pay Imagine Schools Inc. monthly allowances, Julia Brady said. Ms. Brady was a founding parent of the McKinney campus and was later hired as school development director of Imagine International Academy of North Texas.

The amount of the monthly allowances has not been set in Texas, but in Alachua, Fla., Imagine Schools Inc. proposed receiving $3,000 a month for 20 years, plus 1 percent to 3 percent of the charter's revenue for up to 20 years.

In return, Imagine Schools Inc. would provide the two Texas charters everything from teachers to budgeting to human resources, the charter applications state.

Both the Texas charters will lease school space from Schoolhouse, a subsidiary of Imagine Schools Inc., Ms. Brady said.

She said the Imagine charter schools are paying for services they need.

"It's hard to find a vendor to lease something or provide loans to a new charter school," Ms. Brady said. "It's essentially a way for schools to tap into an existing company with a strong credit background."

Ms. Brady said the company is not unjustly siphoning public funds.

"I don't see it that way," she said. "Essentially, the local board has contracted with Imagine Schools to set up and start up the charter, paying them for services rendered."

Ken Berger, CEO of Charity Navigator, a nonprofit watchdog group, said the setup skirts the rules.

"The charter seems like a shell corporation created for the for-profit corporation," he said. "It looks like they found a way around regulations."

According to the Internal Revenue Service, Imagine Schools Inc. is not a certified nonprofit – or 501c3. Ms. Brady said the company is expecting to receive the status soon. The company applied for it in November 2005.

Mr. Berger said the process should take months, not years.

Mr. Berger said it's fine for nonprofits to contract with for-profit corporations. But when most of the contract appears to be made with the same company, the relationship becomes "questionable," he said.

"It seems like they are giving oversight duty to Imagine," he said. "It seems like the tables have turned and Imagine Schools are managing them. But it certainly sounds like a questionable arrangement."