Philly.com’s three-part report on Philadelphia’s corrupt & unsustainable Charter School system hits home with an expose on String Theory, a charter school that was sniffing around Scotts Lane earlier this year. Steve Fillmore’s recap breaks it down for us.
Remember String Theory, the fancy-schmancy charter school that was looking to put a satellite campus off Scotts Lane? Schoolbus traffic would’ve likely been the least of East Falls’ problems with such an enterprise.
According to a verrrry interesting Philly.com investigation, String Theory is apparently participating in a citywide scheme in which charter schools, legal firms, and the PIDC — (Philadelphia Industrial Development Corporation) use taxpayer dollars to finance the purchase of extravagant school buildings and equipment.
I know, right?!
“Extravagant” is certainly the word that comes to mind recalling our tour of String Theory’s flagship school in January of this year: iPads for all, aquaponic fish farming, a business incubator, video motion-capture studio, and a sound stage that rivaled a Broadway theater. After the over-the-top tour we met with founder Angela Corosanite for an over-the-top pitch.
But not a lot of answers to questions like “Do you expel kids who are behavioral problems?” Corosanite said they don’t expel any kid because all their kids blossom when given the chance. The answer was enough for me to put down my pen and left us feeling wary of celebrating a new local school choice until we found out more.
Wow, did Philly.com provide more. Reporters Alex Wigglesworth & Ryan Briggs reveal a shaky financing scheme at String Theory that has caused administrators to cut back classes and suspend bus service after only a year in their new space. Why? Because of an operating deficit in excess of $500,000.
What’s going on at String Theory is indicative of city-wide waste and corruption throughout Philadelphia’s charter school system:
Premier space. Rather than purchasing a modest building, String Theory bought a marquee space, the old GlaxoSmithKline office tower on Vine Street, in 2013 for $29 million (and added another $10-12 million in upgrades). The school now spends nearly one third — $5.5 million — of its $16 million budget just to occupy the half-empty 228,000-square-foot high rise, along with two older, smaller schools in South Philadelphia. That figure is more than String Theory spends on teachers’ wages — $5.3 million.
High-interest bonds. The school relied on high interest junk bonds to finance itself. (The interest rates are approximately 2 times higher than what the Philly school district pays because charter schools are seen to be a more risky investment than public schools, which rely on more stable government bonds. Charter school default rates have also been on the rise recently.) The high rates mean that String Theory will pay $78 million over 30 years on top of its $55 million bond.
Financing and transaction costs. About $1.5 million in financing and real estate transaction fees were built into the $55 million bond deal, paid to Santilli & Thomson and Sand & Saidel. The two firms have billed charter schools millions in the last few years for consulting services and bond issuance fees.
The combination of these costs mean that ST spends $3895 a year per student, well above the amount for the average charter ($1182) or district school ($875)
And yet String Theory sought permission to open four more schools. How could this be?
Because more students means more state funding to pay off debts. But they lose money with every student — around and around they go! Fortunately the School Reform Commission denied the request and the Falls avoided getting tangled up in String Theory (ahem). Looks like taxpayers, however, are left still holding the bag.
The full article on Philly.com goes into much more detail on shady ways charter schools like String Theory can work the system, including how many of these school finagle a way to pay rent to themselves (?!). Kinda unbelievable, we’d love to hear what you think in the comments below or email editor@EastFallsLocal.com.