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Imagine charter schools' expensive leases draw scrutiny

Published Feb. 17, 2012

Two Tampa Bay charter schools are part of a national chain that is drawing scrutiny for lease arrangements that absorb big chunks of taxpayer funding.

The Imagine charter school near downtown St. Petersburg spent $649,312 last year in rent while the Imagine School in Land O'Lakes signed a lease on Monday for a new school with base rent of $757,989 a year.

The landlord? Schoolhouse Finance, a company owned by Imagine Schools.

It bought the Central Avenue building that houses the Pinellas school four years ago, and built the Pasco school on Sunlake Boulevard over the past several months. District records show the Pinellas Imagine spent $133 per student per month on rent while the Pasco school spent about $121 per student per month. Both figures are more than double the average for other charters in the districts.

Imagine's lease arrangements persist despite financial problems that have created tensions with both the Pinellas and Pasco school districts and, in the case of the Pinellas school, academic performance that puts it among the district's lowest achieving schools.

"If this were any traditional public school, there would be all sorts of questions as to why those dollars aren't going into the classroom," said Pasco School Board chairwoman Joanne Hurley.

The discussion is surfacing as the Florida Legislature considers channeling more public school construction money away from traditional public schools and to charter schools, which operate with public money but are overseen by private boards.

Imagine company officials say the Pinellas rent is consistent with other buildings of its size and condition. But even the president of the local school's governing board says it's too much.

"Personally, I feel like it's a lot high," said Clarence E. Davis Sr., a St. Petersburg resident and pastor who was elected president about a year ago. "We're focusing on educating our children. And every bit of income that we get, as much as possible, needs to be focused on that."

• • •

Viriginia-based Imagine Schools is a nonprofit that operates 75 charter schools in 12 states and the District of Columbia. It runs 17 schools in Florida.

The schools have an enrollment of about 400 in Pinellas, and about 520 in Pasco.

On its website, Imagine notes that unlike traditional public schools, most charter schools do not get extra money for buildings. (In Florida, some charters are eligible for small amounts of capital outlay money.)

Company officials say owning a building, versus leasing portables or office space as some charters do, is a plus for students and parents. It "provides safety, stability, a long-term presence, and a high-quality learning environment," the website says.

Supporters of providing charter schools with additional dollars say it's a way to even the playing field for parents who want choices and the schools that provide those options.

"If we do not change the economic model, our charter schools will cease to exist," Rep. Janet Adkins, R-Fernandina Beach, said this week during a failed push for a bill that would have forced districts to give some of their capital tax revenue to charters.

Critics, though, say it's a giveaway to private companies that will own the buildings even if the schools, for financial or academic reasons, go out of business.

In the case of Imagine St. Petersburg, "taxpayers have bought a building for a private entity to own . . . and the students there haven't been getting the education they need," said Pinellas School Board member Carol Cook. "Sounds like a bad deal for our taxpayers all around and our students."

Some charter schools are owned by their nonprofit boards and have agreements that if they were to close, all their assets would revert to their local school districts. A local example: Dayspring Academy in New Port Richey founded by state Rep. John Legg.

• • •

It's up to district school boards to say yea or nay to charter schools, but the law limits the grounds for rejection. A board's belief that the rent is too high is insufficient if the charter school can show its budget will be balanced, said Dot Clark, Pinellas' charter school supervisor.

"We can question, 'Is this really what you want to pay?' " Clark said. "But it's their board that makes those decisions."

Imagine's rent is at odds with many other charters. In Pinellas, the average monthly rent for those schools is $52.29 per student, district records show. In Pasco, the figure is about $54.

The Plato Academy is a home-grown charter operator that leases church space in Clearwater, Palm Harbor, Largo and Seminole. Its monthly rents range from $12.15 to $32.99 per student. "We are dedicated to high academic performance, not fancy buildings," Cam VanNoord, the academy's director of public relations and marketing, wrote in an email.

Pasco's Countryside Montessori charter school has a similar arrangement to Imagine's: The school's two founders own the school building. But its monthly rent is $14,000.

Imagine company officials say they don't think their rent payments are too high.

Beginning in July 2009, Imagine St. Petersburg (technically two schools under one roof, a middle and an elementary) has paid rent based on a formula that begins with 21 percent of its gross revenues. An amended lease says the rent cannot go below the first-year figure even if gross revenues — which are based on student enrollment — drop.

"I would say between 18 and 21 percent in revenue is a rather typical rent payment," said Chris Watson, regional director of Imagine Schools in west Florida.

Still, Imagine leases are raising eyebrows inside and outside Florida. So are similar deals with other charter school companies.

Last fall, the St. Louis Post-Dispatch reported that the six Imagine schools in St. Louis are paying a higher share of their budgets toward rent or mortgages than other charters in the city, while Florida Today reported that an F-rated Imagine school in Melbourne is paying $1.4 million in rent — 44 percent of its funding. In December, a Miami Herald review of charter schools found 19 in South Florida had rents exceeding 20 percent of their income.

• • •

Imagine's five-year contract with Pinellas ends June 30. The district recently sent the schools a renewal packet to fill out by mid March.

Davis, the school's governing board president, said he is seeking alternatives to the current lease but wouldn't elaborate. He said the rent amount is mitigated by Schoolhouse Finance's willingness to forgive the school's debts of $2.4 million. Imagine also covered some of the debts incurred by its Land O'Lakes school.

Besides its finances, the St. Petersburg school is likely to face more scrutiny because of academics. Imagine Middle earned a D grade last year, and ranked last among Pinellas middle schools in FCAT points.

Imagine Elementary also earned a D last year, up from F's in the previous two. It ranked third from last among all Pinellas elementaries, just above the district's two F-rated schools.

The Imagine School at Land O'Lakes earned a C in 2010 but jumped to an A in 2011.

Times researcher Carolyn Edds contributed to this report.

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