The latest cash grab : Teacher/charter school villages

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TFA recognizes the value of the Centers concept and has entered into a Memorandum of Understanding with Seawall Development Company to replicate the Centers for Educational Excellence model across the country. Philadelphia, along with Washington, D.C. and New Orleans, is a TFA-identified growth area, and TFA has committed to being the lead commercial tenant in these developments, with their corps members making up the majority of residential tenants.

TFA: The New Gentrifiers

As I noted in a previous article titled The Battle in Seattle Against Yet Another Charter School Invasion, a developer plans to build a project that includes retail, low income housing and at one time, a charter school, the Green Dot charter school chain, in Southeast Seattle.

Based on further research, I found this is not an anomaly but a national trend.

Bankers, developers and real estate brokers are working together with Teach for America (TFA) and charter school enterprises to offer low income housing mainly for Teach for America recruits and other teachers who do not have adequate pay for clean and safe housing along with free space for charter schools through city and state support. These are our tax dollars paying for highly lucrative business ventures where all the profit goes back to the bankers, developers and brokers.

These people are not developing these projects out of the goodness of their hearts, they are doing it for, of course, the money.

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So how does this work?

Basically, developers will get money from the city or state to provide low income housing in blighted areas or low-income communities. A charter school is brought in to sweeten the pot along with teachers who will begin the process of gentrification.

In a few years, the local community becomes popular for basically the creative class or white middle and upper classes and before you know it, you have a Soho, a Mission district in San Francisco, a Northeast Portland.

Property values begin to rise and an investment made with public money goes into the pockets of the bankers, developers and brokers.

For Teach for America, Inc. it’s a perk. They can retain recruits at very low pay because they now have “affordable housing” for the working poor and charter schools can come in with little to no cash required because of city and/or state subsidies.

Sweet deal for the 1%, not so good for the rest of us.

When the value of the property around the school begins to skyrocket, those who were to benefit from the developments will not be able to afford to live anywhere near the original charter school/low income housing sites.

And, if a charter school goes belly up, as a large percentage of them do, less money has been lost and the space is move-in ready for the next charter school venture.

According to an article titled Why Are Community Development Lenders Financing Charter Schools?  published in ShelterForce:

Some CDLF [Community Development Lenders] practitioners also believe that charter schools are conducive to urban revitalization because they provide middle-class families with “safe” educational alternatives that encourage them to move to and stay in urban areas, helping to break up the concentrated poverty found in many of those areas. Research documents that charter schools are used by higher-income, primarily white urban residents who do not want to send their children to local public schools serving large numbers of low-income, black and brown students.

Other studies provide evidence that charter schools are used by more affluent whites in non-urban communities as well, as a means of facilitating segregation. More generally, numerous studies have found that charter schools lead to increases in segregation in education by race, ethnicity, and income, across metropolitan areas

  1. It’s Where the Money Is

CDLFs are mission-driven organizations, but they also respond to the market. There are substantial and growing public and private incentives for investing in charter schools. Those incentives are particularly attractive given the limited availability of other forms of subsidy.

One of the most effective forms of subsidy to encourage CDLFs to support charter school expansion is the U.S. Department of Education’s (USDOE) Credit Enhancement for Charter School Facilities (CECSF) program. The USDOE awarded $280.9 million in CECSF grants between 2002 and 2015 “to public and nonprofit entities to develop innovative credit enhancement models that assist charter schools in leveraging capital from the private sector.” CDLFs received at least 75 percent of these CECSF grant dollars

Indeed, the program has been very successful in leveraging private capital with federal funding sources. LISC calculated that, through 2012, approximately $250 million in CECSF dollars leveraged an additional $3.2 billion in charter school facility financing, with private investors attracted by the lower risk and greater financial profitability.

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Before heading to other cities where this is happening, I thought it would be worth noting that the Homesight low-income housing development in Southeast Seattle that was to house Green Dot charter school and populated by Teach for America recruits has one financial backer of note, Bill Gates. Bill Gates is a proponent of school privatization. The Gates Foundation provided Homesight with $100,000 to support the Regional Equity Network to advance a community-led agenda in the Puget Sound region”* and $16 million to Green Dot “to support the expansion of Green Dot Public Schools into the state of Washington”. Also of note, two of Washington Teach for America’s “Supporters” are Goldman Sachs (who finances several of these charter school/low income developments around the country) and Avenue Properties.

So, let’s see what’s been happening elsewhere.

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One of the first examples of these business ventures was one Cory Booker pushed back in 2012. Cory Booker is no friend of public education because of his ties to the donor class so this comes as no surprise to those who have been following him.

As the then Mayor of Newark, Cory Booker stated at the groundbreaking of the Teachers Village per NBC New York:

“This is how we reinvent and rebuild a great American city,” Mayor Cory Booker declared when ground was broken for Teachers Village, a downtown development of eight buildings planned to have 200 apartments for teachers, three charter schools, a day care center and stores. It’s being designed by architect Richard Meier, a Newark native best known for designing the Getty Center in Los Angeles. The $150 million price is being covered by a combination of private and public funds.

In the next paragraph, the reporter writes:

The hope is that schools will be better with teachers who live in the community, and that it will create a middle-class enclave in a city where nearly one-third of families with children live in poverty. Middle-class residents can bring neighborhoods stability, attract more businesses and ultimately improve tax revenue.

Per New Jersey Business:

The project was awarded nearly $40 million in Urban Transit Hub tax credits from the state Economic Development Authority and allocated $60 million in federal New Markets tax credits for the school portion. Other public financing came from the city of Newark, the state Casino Reinvestment Development Authority, and federal Qualified School Construction Bonds, according to an EDA memo. Private financing came from Goldman Sachs, Prudential Financial Corp., TD Bank and New Jersey Community Capital, Beit said. In the early months of the recession, Beit said, Berggruen’s unwavering commitment to the project — Berggruen said he considers his investment “long-term” — brought everyone else together.

Teachers Village now has three charter schools.

All of this out of public coffers at an estimated $200 million.

Originally, leaders of the teachers’ unions were all for Teachers Village until they came to realize the concept was not for public school teachers but for Teach for America recruits. (It’s hard to imagine these folks were that naïve.)

According to Ed Week in an article titled Projects Couple Affordable Teacher Housing With New School Construction:

Newark Teachers Union President John M. Abeigon says the union, an affiliate of the American Federation of Teachers, initially backed the project because it thought it would benefit more traditional public school teachers. At the start, he says, the developers had emphasized its planned support for such educators.

But Abeigon contends that the project then became aligned with what he calls the “corporate charter school movement.” For evidence, he cites the complex’s three charter schools and the fact that most of the apartments are rented to charter teachers and staff.

Abeigon’s concerns are echoed by Randi Weingarten, president of the AFT.

“This was supposed to be a way to recruit and support and retain Newark public school teachers,” she said. “That was the basis on which then-president of the Newark Teachers Union Joe Del Grosso [now deceased] and the AFT said this makes sense, because we really do believe in the idea of teachers living in the communities in which they teach. But Teachers Village came to be about charter teachers alone and that was dead wrong.”

Abeigon also argues that the complex’s close ties to charter schools belie the developers’ professed commitment to the long-term health of the community—a sentiment shared by other critics of the project.

“It’s a known fact that traditional public school teachers, who I refer to as career educators, stay longer than charter school teachers, so their commitment and investment in the community is that much greater,” he said. “Those living in Teachers Village are going to be turnaround tenants. They’ll do their two-year stints with [Teach For America] or a charter school, beef up their résumés, and then go get a job elsewhere. They aren’t going to really be invested in Newark.”

And in New York, another housing development. Per Affordable Housing Finance:

A new vibrant, mixed-use development that is providing much-needed affordable housing, a charter school for underserved students, and nonprofit office space has been built on an underutilized area of a New York City Housing Authority (NYCHA) site in East Harlem.

Jonathan Rose Cos., Harlem RBI, and Civic Builders partnered to create the East Harlem Center for Living & Learning on the site of George Washington Houses. The development includes the 89-unit Yomo Toro Apartments; the DREAM Charter School…

The total development cost for the project was approximately $84 million, including $30 million for the Yomo Toro Apartments. The affordable housing portion was financed through low-income housing tax credit equity provided by Enterprise Community Investment and sourced by JPMorgan Capital Corp., first and second mortgages from the New York City Housing Development Corp. (HDC), a loan from New York City Department of Housing Preservation and Development, Reso A funding from City Council speaker Melissa Mark-Viverito, and a grant from the New York State Energy Research and Development Authority.

In San Diego, there was a push to revise code requirements that would allow a charter school to be a part of a low-income housing development.

The community had issues with the school bringing with it additional unwanted traffic to the neighborhood causing the variance for the charter school to be tabled.

The difference between what happened in San Diego and what occurred in Seattle is that the variance request was reviewed by way public meetings in San Diego, not behind closed doors as was done in Seattle.

Thanks to the efforts of former School Board Director Sue Peters, the school board and the public were alerted to the second attempt by Green Dot charter school to receive special treatment by the City of Seattle in terms of receiving a code variance.

RBHGroup-logoThe RBH Group, who were the developers for the Newark project and whose CEO Ron Beit sits on the board of Teach for America, Inc. in New Jersey, then went to Hartford, Connecticut.

According to a report published by Goldman Sachs:

RBH Group, the developer of Newark’s Teachers Village, announced the completion of financing and the start of construction on Hartford’s Teachers Corner, a mixed-use apartment complex in downtown Hartford aimed specifically at teachers

RBH Group’s founder and president Ron Beit said, “Teachers Corner represents a public and private partnership committed to urban reinvestment, building affordable and workforce housing and contributing to revitalizing the center of the city.

Following the Teachers Village project in Newark, NJ, the RBH Group, through its joint venture with the Goldman Sachs Urban Investment Group, partnered with Prudential Social Investment Group, the City of Hartford and State of Connecticut to build the $20M project

Funders include City of Hartford, Connecticut Housing Finance Authority, State Department of Housing, Capital Region Development Authority CRDA, State Department of Economic and Community Development, Prudential Social Investment Group and Goldman Sachs Urban Investment Group.

In Baltimore, per Urban Land magazine:

The $21 million renovation of a long-vacant, century-old former tin box manufacturing plant in Baltimore’s Charles Village neighborhood was completed in summer 2009 by Seawall, founded by father and son Donald [Previously on the Teach for America, Baltimore Advisory Board] and Thibault Manekin. The project includes 40 apartments—ten reserved as affordable—and 35,000 square feet (3,250 sq m) of commercial space.

All the apartments are rented to school teachers at substantial discounts to market rental rates, and all office space—with the exception of Seawall’s headquarters—is leased to education-related organizations, including Teach for America.

Over 70 percent of the residents are members of Teach for America who work in Baltimore’s public school system, Morville notes. Several others are participating in the Baltimore system’s City Teacher Residency program, and some teach in parochial schools…

The financing mechanism that really made the project pencil out was the pairing of the New Markets Tax Credit (NMTC) with federal and state historic tax credits, Morville says. The project is located in a census tract defined as “highly distressed” under the NMTC program.

And in San Jose:

Developer proposes project with charter school, affordable housing for San Jose ‘urban village’.

With affordable housing and a [Aspire] charter school, the mixed-use project would be a first for San Jose and transform a currently vacant industrial property in the Alum Rock area.

As with charter schools and the Common Core Standards, venture capitalists are cashing in on public school funding making school districts even more strapped for cash while desperately trying to keep schools together, employ certified teachers and adequately staff their schools.

Make no mistake about it, these “teacher villages” are not about the children or the communities they live in. This is yet another big grab for cash by financial enterprises.

Dora Taylor

*Post Script:

It’s a devious web that Bill Gates and others weave particularly in the Seattle area where many of us caught on several years ago to the efforts by a few to privatize public schools in the US.

For that reason, it’s important to explain some connections.

Homesight and Regional Equity Network (REN):

Tony To, the Executive Director of Homesight is a co-chair for REN. Thus, the grant from Gates describes two receiving parties, Homesight and REN.

 

Recommended articles:

SIX REASONS WHY WE DON’T WANT GREEN DOT CHARTER SCHOOLS IN SEATTLE

This Is What Happens When You Criticize Teach for America: An internal memo reveals how TFA’s obsessive PR game covers up its lack of results in order to justify greater expansion.

Why Are Community Development Lenders Financing Charter Schools?

Public Schools to Community Development (A highly recommended deep dive into what the thinking is on the part of the moneyed community.)


Critics rip plans for $22M charter school at Cayce Homes

Who Will Live In Newark’s Teachers Village? TFAers

TFA: The New Gentrifiers

Policy Link: A recent find that shows who is connected to what organizations in Washington State

Projects Couple Affordable Teacher Housing With New School Construction

WHEDco Bard Academy Charter School to share space in Bronx with affordable housing and music center in 2013  

It’s an East Harlem DREAM come true: a new charter school beneath affordable housing 

EMAILS REVEAL THE “GATES MACHINE” IN ACTION AFTER THE WASHINGTON STATE SUPREME COURT’S DECISION THAT CHARTER SCHOOLS ARE UNCONSTITUTIONAL

BILL GATES IN WASHINGTON STATE: MAYORAL CONTROL AND CHARTER SCHOOLS

WHAT BILL GATES HAS SPENT SO FAR IN OUR STATE TO SUPPORT CHARTER SCHOOLS

Washington State: Charter School Backers Want to Oust Judge Who Authored Anti-Charter Decision

 

 

 

 

 

 

 

 

5 comments

  1. Here is another recent move by the charter industry: an August 2018 report on charter school “deserts” where parents have insufficient “choices.”
    Charter Schools Deserts, is available on line with interactive with maps and zones in each state designed to encourage charter expansions in census tracts selected by (dubious) measures of “levels of poverty.” These levels are conjured to rationalize the movement of charters into suburbs said to have insufficient choices in schools. The expansion scheme is from the Thomas B. Fordham Institute and also circulated by the Heartland Institute. I am reminded that such maps are also being used, in more sophisticated form by WeWork, which has a startup school in NYC designed by the architect who designed the LEGO headquarters and also connections with a farm where children from the charter school go to learn entrepreneurial skills. https://edexcellence.net/publications/charter-school-deserts-report
    Here is another version of real estate development in NYC with a school for young entrepreneurs to be integrated into a workspace also with a farm. https://therealdeal.com/2016/02/04/weworks-adam-neumann-buys-60-acre-westchester-farm/

  2. Come to us and we’ll give you charter schools AND affordable (forget having your own professional income) housing: how very, very frightening to see the strategy in play. Control the kids, control the curricula, control the very lives and conversations of those who teach…

  3. Dora, when you have time, you may want to check out this talk with the head of TFA. It was done at the Wharton People Analytics conference and provides some interesting insights into TFA as a social impact investment program as well as how THEY manage (automate) human capital within their system. TFA is one big social experiment for the benefit of private investors at all level. https://wpa.wharton.upenn.edu/video/wharton-people-analytics-conference-2017-elisa-villanueva-beard-interviewed-adam-bryant/

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