"Investors Take Shine to Charters:"
A Commentary by joe brennan
Believe it or not the Wall Street Journal finally published the truth. Peter Grant, in his WSJ article 10-14-15, revealed an underlying truth about Corporate-Chartered schools. The real bottom line is Return on Investment, not education. Let the article speak for itself.
" Real estate investors are showing an increasing interest in charter school investment". "Charter school groups often rent and buy buildings from private real estate developers, and that is creating a new niche asset for some investors". "A Denver based private equity firm is raising a $100 million dollar fund". "Andre Agassi, of tennis fame, is building new charter schools with a goal of $400 million". "A real estate investment trust, spent more than $118 million in 2014 on acquisition, renovation, and construction, compared with $34 million in 2011".
"During the 2014-2015 school year, 500 new charter schools opened nationwide... for a total of more than 6,700 enrolling 2.9 million students". "Some states are beginning to make financing tools available to charter schools" " Texas, Colorado, and Utah now backstop tax-exempt bond issues for some charter schools". "Critics say charter schools are cutting costly deals with developers who are more concerned with investment return than educating children".
"The challenge is too large for the nonprofit sector to solve, said Renna Abraham of the Local Initiative Support Corp." "Northstar believes it can give investors more than 10% returns on their money. Part of its formula is buying buildings for a fraction of their costs and cutting deals with operators with a proven track record". "Mr. Agassi raised $210 million, financed nearly $200 million in new school development, and is on course to develop 65 schools for 35,000 in 17 states". "It has generated a rate of return of more than 10% for investors".
Poor children bring Rich returns for financial investors. Education for Corporate-chartered schools seems to be focused on educating potential investors. The KY GA rejected a bond issue for assisting unfunded teacher retirement plans. Will it now accept issuing bonds for Corporate-Chartered schools that promise a 10% return on investment? Let's hope this is not the case.