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Dollars to investors

More evidence of the awkward relationship between for-profit businesses and taxpayer supported schools is found in a recent story in the Wall Street Journal – this one about Entertainment Properties Trust, the real estate investment trust that owns three Imagine Inc. charter school properties in Indiana. The trust owns the Imagine MASTer Academy campus in Fort Wayne and two school buildings in Indianapolis.

The June 26 article describes troubles EPT has run into in Missouri and Georgia, where Imagine Inc. was forced to close nine schools in the wake of "criticism about poor test scores and financial mismanagement."

The schools represent $72 million in investment for EPT. Chief Executive David Brain insists the charter school environment is still attractive, with an "increasingly favorable political climate for alternative education."

But the article notes that not all signs are good:

Some school boards are frowning on using taxpayer funds to pay rent to profit-making companies. Ronald Lankford, deputy commissioner of the Missouri Department of Elementary and Secondary Education, said that Imagine was paying closer to 20 percent to 25 percent of the state money on rent and other expenses related to the maintenance of the school facilities. "It did not appear that sufficient funding was set aside to go directly into school instruction," he said.

The good news for EPT in Indiana is that the state department of education and the appointed school boards which oversee charter schools don't seem to care about how much money is flowing to real estate investors instead of classrooms. The Journal Gazette has reported extensively on Imagine's lucrative real estate deals, which have gone unquestioned by state officials, legislators and charter school board members. Gov. Mitch Daniels' dollars-to-the-classroom push has mysteriously bypassed charter schools.

Local government budget transparency has improved greatly during Daniels' tenure, but the transparency has not extended to charter schools even as his administration has gone to great lengths to increase the number of charters. In the case of Imagine Inc., it's not even known exactly how much money taxpayers spend on rent because the triple-net contracts are between EPT and Imagine Inc., the for-profit education management company hired by the unelected boards to operate the schools.

Too complex to understand? That's surely what someone intended.

Karen Francisco, editorial page editor for The Journal Gazette, has been an Indiana journalist since 1981. She writes frequently about education for The Journal Gazette opinion pages and here, where she looks at the business, politics and science of learning as it relates to northeast Indiana, the state and the nation. She can be reached at 260-461-8206 or by e-mail at