Monday, July 28, 2014

More Michigan corruption and an LA-based observation

As mentioned before, the Detroit Free Press recently ran an extraordinary series on on the growing number of scandals surrounding Michigan's two decades of aggressive school privatization. I've got something bigger coming up on this and I don't want to spend too much more time nickel-and-diming the subject by posting various outrages, but I do want to take a moment and share this pattern I've come to recognize.

First devastating cuts are made to essential parts of kids' education with the rationale that things are tough all over. Then people in the same system (often the same people -- see Deasy, John) will spend extravagantly on their pet projects (see iPads, John Deasy's billion dollar), often enriching themselves, associates, friends and/or relatives. When someone criticizes the profligacy, the inevitable reply is to insist they only want kids to have the best.

Remember this story from an earlier post?
Detroit Public Schools EM shifts funds from classroom
By Dr. Thomas C. Pedroni

Many of us are shocked to learn that DPS plans to cut costs in the coming year by further increasing class sizes. Already at an unmanageable target of 38 per classroom in grades 6 through 12, Emergency Manager Jack Martin’s fiscal year 2015 budget allows class sizes in those grades to expand to 43.
With that in mind, check out this article from Jennifer Dixon, part of the Free Press series.
Glenn Clark, president of Detroit Merit Charter Academy and a founding member of the board, said he didn’t know the amount “off the top of my head.” But he said it was justified as a “made-in-heaven arrangement in that corner of the city.”

Detroit Merit subleases its building from NHA. The building is clean and orderly, but it lacks a cafeteria or gym, so students eat in their classrooms. With more than 730 students, the school is packed. Clark said “every seat is taken” and there isn’t enough classroom space for specialty areas of instruction.

On a Free Press visit to the K-8 school last year, a writing coach worked with her students at desks tucked under a school stairwell, a handful of students played their drums in another stairwell, and saxophonists practiced in a hallway.

The band room had been carved in half to make room for art classes, with filing cabinets separating the musicians from the painters. A third of the kitchen had been converted into a small math classroom, with refrigerators and other appliances dividing up the area.

Melvin Rusher, president of the board of Fortis Academy in Ypsilanti, declined to say how much the school was paying in rent — just over $1 million — until checking with the rest of his board. He did not return subsequent phone calls. Board presidents at Regent Park Scholars, Flagship Academy and Legacy Charter Academy, all in Detroit, also did not return calls.

Rent increases pushed schools into the million-dollar club in the 2013-14 school year: South Arbor in Ypsilanti, Ridge Park and River City Scholars, both in Grand Rapids. The Free Press could not reach board presidents.

Plymouth Scholars is another school in the NHA million-dollar club, but neighbors in Plymouth Township say it doesn’t look like a million.

Built in 2012, it is two stories and rectangular. Residents of the neighborhood, where some houses are on the market for upwards of $500,000, say it looks like a warehouse.
Charter Development Co., an affiliated company that is based in the same offices as NHA, paid $700,000 for the land, according to township assessor records. NHA declined to say how much it spent on construction costs, but told its authorizer that it would invest approximately $7 million.

The school’s annual rent is $1.16 million.

Based on those numbers, local developer Jim Jabara said NHA is getting a 16% rate of return on its investment, which he likened to the goose that lays the golden egg.

“It’s a hell of a return for the people who own it, and the school pays a premium for it,” said Jabara, who owns commercial and industrial property in the area.

William Watch, president of First Commercial Realty & Development Co., in Southfield, which owns, leases, manages, develops and builds commercial and retail projects, said the rate of return for free-standing drugstores like Walgreens and Rite Aid, with long-term leases, is typically 7%-9%.


Carl Berry, a member of the Plymouth Scholars board until late January, called it “an ugly building” but said, “What goes on inside is the most important.” The school is too new to be ranked by the Michigan Department of Education.

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