When it comes to slick property deals that use public money to enrich private investors in real estate trusts, Imagine Schools Inc. of Arlington, Va., has been clever and creative.
When it comes to ensuring that non-profit boards of charter schools don't interfere with Imagine's for-profit business, the national management company has been disciplined and focused.
But when it comes to actually educating children, Imagine has been betraying the trust of thousands of ºüÀêÊÓƵ kids who are eager to learn — like the child in Christian Gooden's photograph with this editorial. Imagine has betrayed the trust of parents who thought that Imagine would provide a good education and give their kids a chance at a better life.
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Imagine's scores on Missouri's standardized tests consistently have lagged behind those of other area school districts — including the ºüÀêÊÓƵ Public Schools. This year, even after four years of operation in ºüÀêÊÓƵ, Imagine's scores were the lowest of any district in the state.
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The people responsible for safeguarding the educational interests of Imagine's 3,800 students should cancel the operating charters of its schools now and free families to find better places for their children to learn and grow.
That duty falls to Missouri Baptist University, the sponsor of record of Imagine's local schools. In the wake of a revelatory of articles about Imagine earlier this week by the Post-Dispatch's Elisa Crouch, MBU officials have intensified their review of Imagine's substandard operations. Prior to publication, the university had been dragging its feet. That approach ill serves the students MBU wants to protect.
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Since Ms. Crouch's stories were published Sunday and Monday, Imagine Schools has an executive vice president on administrative leave. She reported finding his name associated with payments from a local developer who pleaded guilty earlier this year to federal charges of bank fraud and kickbacks in a case unrelated to Imagine.
However, the most disturbing aspect of this affair is not the scent of a possible scandal, but Imagine's standard business practices.
These include elaborate multi-party real estate deals used to secure property for its schools, including those in ºüÀêÊÓƵ. In the end, Imagine schools are with millions of dollars a year in rent obligations that rake off as much as 20 percent of the state funds they receive to operate. That's 200 percent to 500 percent greater than the proportion of state funds other area charters pay in rent.
Combine that with Imagine's 12 percent management charge and assorted fees, and the schools are left in weak financial condition — short on staff, books and even such basic supplies as writing materials, toilet paper and soap. They are forced to scrimp on maintenance.
Ms. Crouch reported that Imagine routinely enrolls more students than the number of people permitted in its buildings under fire safety occupancy codes. Imagine receives a per-student allotment from state education funds of about $8,000, plus another 10 percent or so from federal funds. The more students who can be crammed into buildings, the more revenue Imagine takes in.
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The students' — and the public's — first line of defense is supposed to be the non-profit board that holds the actual charter under which the schools operate. But Imagine Schools' management contracts effectively grant it total , and boards have found it difficult to demand accountability. Conflicts over authority and governance have arisen at Imagine schools in New York, Texas, Nevada, Indiana, Florida and the District of Columbia.
Ms. Crouch also reported on Imagine's unsettling relationship with Samuel Glasser, a local real estate developer and convicted felon. He has been involved in Imagine's convoluted property transactions and renovations at some of its local schools.
Ms. Crouch discovered records for historic renovation tax credits for Imagine buildings that showed thousands of dollars of payments to a New Jersey bank and referencing the name "Sam Howard." A Samuel Howard is an Imagine executive vice president with responsibility for company operations in Missouri, Georgia and the northeast U.S.
Mr. Howard, who lives in New Jersey, told Ms. Crouch that he was unaware of the references and had no idea what they meant. As Ms. Crouch reported on Thursday, Imagine has placed him on administrative leave.
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State development officials gave the material on Glasser and Imagine to the FBI and suspended the tax credits. The FBI declined to comment to Ms. Crouch, so it is not known whether investigators are aware of Glasser's in a failed real estate project in Pittsburgh last year that involved Imagine Schools.
The ºüÀêÊÓƵ region has had its share of homegrown scam artists who have ripped off schoolchildren and the public. We should support committed innovators and reformers who put children and learning first on their priority list. Imagine must go.