Politics & Government

Arizona charter operator made millions on the schools he runs. He now wants to be in NC.

A charter school operator who made millions of dollars building, selling and leasing properties to the schools he runs moved a step closer Monday toward setting up shop in North Carolina.

The N.C. Charter Schools Advisory Board voted Monday to recommend giving a full interview to Wake Preparatory Academy, a proposed K-12 charter school that wants to open in 2020 in northern Wake County. Wake Prep would be managed by a company whose owner also owns the company that would build and lease back the facility to the charter school.

Wake Prep is proposing to contract with Arizona-based Charter One to manage the school. Charter One manages American Leadership Academy, a network of Arizona charter schools. Former Utah state legislator Glenn Way founded ALA and owns Charter One and Schoolhouse Development.

The Arizona Republic reported last year how Way had made as much as $37 million by setting up no-bid deals in which he built school campuses and then sold the properties at a profit to the ALA charter schools. The newspaper’s five-part investigation into charter schools earned it the prestigious George Polk Award for Education Reporting.

Under Wake Prep’s proposed agreement, the school would contract with Schoolhouse Development to build the facility and lease it back to the school. The lease would start with the school paying $2.2 million the first year, $2.6 million the second year and $3 million in each of the next three years.

Bruce Friend, a CSAB member, said the board needs to get questions answered before recommending that the State Board of Education approve the school. Aside from questions about the lease, concerns were also raised that Wake Prep plans to pay Charter One up to 15 percent of its revenues annually.

“I think we still need to flesh out a little bit this relationship between the EMO (education management organization) and the school and the development, because there are some things that happened in Arizona that I think we at least need to be aware of,” Friend said.

Robert Plowman, chief financial officer of Charter One, told the advisory board that Charter One is in good standing in Arizona and that Way is a minority owner in Schoolhouse Development.

Some advisory board members were interested in how Wake Prep would be the first charter school in the state for Charter One. Charter schools are taxpayer-funded schools that are exempt from some of the rules that traditional public schools must follow.

“I think it’s great that we’ve got another EMO that’s interested in coming to North Carolina,” said CSAB member Lindalyn Kakadelis, who chaired the committee that recommended giving Wake Prep a full interview. “This would be the first. That is interesting to me.”

Wake Prep could be interviewed at the April board meeting.

The leaders of Jordan Lake Academy, a proposed charter school in Wake County, stressed Monday that they had no ties to Way, American Leadership Academy or Charter One. The group submitted a letter saying that some of its leaders left ALA because of concerns about the organization’s business practices.

The advisory board voted Monday not to recommend a full interview for Jordan Lake due to concerns about the application.

Some charter schools are managed by for-profit companies. Last month, the advisory board recommended that the state approve three new charter schools in Wake County that would have contracts with for-profit companies.

This is the second time that Wake Prep has tried to open in North Carolina. The school applied last year to be managed by a different company before withdrawing its application.

Hilda Parler, a former CSAB member and president of Wake Prep’s board, said Monday that there’s high demand for high school charter seats among families in northern Wake.

“The population in the Wake Forest, Rolesville area is growing leaps and bounds,” Parler said. “New construction is everywhere.”

Parler was asked why she didn’t apply to just open a charter high school. She answered that a K-12 charter school would be more “lucrative” and “economically feasible” than only offering high school.

Parler said she had considered applying as an independent charter school before being put in contact with Charter One.

“We look at the things that are going on here in the great state of North Carolina and think there are opportunities to help Hilda and her board,” Plowman, of Charter One, told the advisory board.

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T. Keung Hui has covered K-12 education for the News & Observer since 1999, helping parents, students, school employees and the community understand the vital role education plays in North Carolina. His primary focus is Wake County, but he also covers statewide education issues.