The Big Business of Charter Schools — MUST READ
Don’t take it from me. Meet David Brain, an investor who also owns commercial real estate, movie theatre chains, and other businesses. He talks baldly to CNBC about what a great deal it is to have taxpayer dollars subsidize your investment.
As highlighted in Valerie Strauss’ Answer Sheet, at the Washington Post:
If you are wondering why you should add charter schools to your investment portfolios, here’s David Brain, head of a major investment concern called Entertainment Properties Trust, to tell you.
So, still think corporate chain charters are rooted in the community and responsive to parents and children?
Anchor: Well let me ask you about potential risks, here, to your charter school portfolio, because I understand that three of your nine “Imagine” schools are scheduled to actually lose their charters for the next school year. Does this pose a risk to investors?
DB: Well, occasionally — we have Imagine arrangements on a master lease, so there’s no loss of rents to the company, although occasionally there are losses of charters in certain areas and they’re used to peculiar, ug, particular circumstances. In this case it’s a combination of relationship with the supervisory authorities and educational quality. Sometimes educational quality is very difficult to change in one, two, or three years. It’s a long-term proposition, so uh, there are some of these that occur, but we’ve structured our affairs so this is not going to impact our rent-roll [emphasis mine] and in fact we see this as uh maybe even a good experience as the industry thins out some of the less-performing schools and we move on to the best-performing schools.
Because school closures are not disruptive and difficult for families to absorb, and hard on children who must re-attach themselves to new teachers and friends — which is why investors are blithe about starting them up and shutting them down. I’d bet if asked, Mr. Brain would say, “We don’t cry when a McDonald’s under-performs, we just bring in some consultants or enact a turnaround strategy, and freshen it up and get that bottom line where it should be.” Same with a corporate charter chain, right Mr. Brain? You sell the sizzle of vanity customization even though the steak of curriculum, centralized charter management operations, and drill-and-kill might be a little one-size-fits-all.
NOT. I have problems with market approaches to education that treat children as either an inconvenient byproduct of the actual product (that being RENT-ROLL, in case you missed it) or little widgets themselves.
Wonder if there were no New Markets Tax Credits for investors, if corporate charter chains would be quite so popular. Somehow I suspect not.
We currently have the equivalent of Medicare in our public education system. It isn’t perfect and we’ve funded it inconsistently, but there’s darn universal coverage for all who are eligible, and what you need gets covered pretty well. Why would we want to throw Medicare out the window and make education a scarce commodity, much as was done to our health insurance system until we had the gumption to improve it with the Affordable Care Act?
If you had Tri-Care or Medicare, would you give it up for catastrophic coverage that’s expensive and exclusive to those who are already fit and healthy?
That’s what market forces introduced into public education would do.