A Holiday Gift Like This May Be Happening in Your DC Neighborhood Right Now

On November 21, the DC public charter school board approved Rocketship having a second campus at 4250 Massachusetts Avenue SE.

Four days before, on November 17, the DC department of transportation (DDOT) held a hearing for Rocketship’s use of public space for its yet-to-be-built second school at 4250 Massachusetts Ave. SE.

Before that DDOT hearing was over, DDOT put a hold on the development, because of concerns about use of public space for it and the disapproval of the local ANC, conveyed to both the charter board and DDOT in October. A second DDOT hearing for this Rocketship campus is slated for January 26.

DDOT’s hold was apparently fomented also by a document presented to the charter board at its October board meeting, by the 21st Century School Fund. That document outlines in detail how unsuitable that area is for a school in terms of location, existing schools, and size (for instance, the planned building will provide only half the space per student a DCPS school is required to provide). It also outlines how public processes for creating that campus were not followed or fell short of adequacy, essentially leaving the public in the dark.

Indeed, at the November charter board meeting, several neighbors and ANC commissioners testified about having very little information ahead of time and presented a neighborhood petition, asking that the school not be located there. They noted that there are nine schools in the area already, including both DCPS and charter schools.

Shortly thereafter, the charter board voted unanimously to approve Rocketship’s second school in that location.

This is all perfectly legal

On May 27, 2016, three contiguous parcels of land in a residential area of Ward 7 were recorded as sold to one buyer. Two of the parcels—4135 Alabama Avenue SE and 4250 Massachusetts SE—had residential dwellings. One parcel—4254 Massachusetts Avenue SE–was an empty lot.

The sale prices for each of the parcels, recorded in our city’s real estate assessment database, were well above their assessed value. The seller for two of the properties was the nearby New Macedonia Baptist Church, at the corner of Alabama and Massachusetts avenues SE.

The buyer of the three parcels? TA Washington 4250 Mas LLC.

This name is rather meaningless until one sees the address of the buyer:

3000 Olympic Boulevard Suite 2120, Santa Monica, CA  90404

This happens to be the address of the Turner Agassi charter school facilities fund. It is also the address of Turner Impact Capital.

These businesses fund charter school development by purchasing land on which charter schools may build and then leasing the land back to the charter schools.

Rocketship’s first DC campus, at 2335 Raynolds Place SE, was purchased and funded exactly like this. That site, like those three parcels of land in Ward 7 intended for the second Rocketship campus, was purchased months ahead of its approval by the charter board. The purchaser was also an LLC at the exact same address as the new owners of that second Rocketship campus, albeit with a slightly different name: CA WASHINGTON 2335 RPSE LLC.

On June 2, days after those three parcels at 4250 Massachusetts Ave. SE were sold, Jacque Patterson, regional director for Rocketship and former state board of education candidate, made the school’s first effort to reach out to the neighborhood. He started with the area’s ANC commissioner, Linda Green.

But that outreach appeared to be too little, too late. One neighbor found out about the school by talking to surveyors, who had showed up on the property not long after its purchase and noted that a school was being built–and that there was nothing the neighbors could do about it.

Yet another neighbor found out about the school by talking with workers erecting a barbed wire fence around the perimeter of the three parcels.

On June 6, the ANC, through Linda Green, received a letter from DDOT, notifying the ANC about Rocketship’s application to occupy public space at the site. Not long after, Patterson and Rocketship went to the ANC during its regular meeting, to talk about the school–but still without giving a formal presentation.

The next day, Green told Patterson that she would not support the building of the school. Neighbors began gathering signatures for a petition against the school.

Despite the real estate actions and conversations, it was not until September 2 that the ANC was officially notified about Rocketship’s charter amendment application to build a second campus at 4250 Massachusetts Ave. SE.

According to the charter board staff memo for Rocketship prepared for the November 21 meeting, that September 2 ANC notification was not done by Rocketship, but by charter board staff, who that same day had been told verbally by Rocketship that it intended to add a campus at 4250 Massachusetts Ave. SE. Rocketship’s formal application to amend its charter was filed with the charter board a week later, on September 9.

Such ANC notification appears to indeed be the purview of the charter board. In fact, tomorrow, at its December meeting, the charter board will vote on shortening the window for ANC notification of its public hearings and actions from 45 business days to 30.

In the case of this campus for Rocketship, the charter board’s perfectly legal notification came months after the neighborhood had already been caught off-guard.

Moreover, despite the ANC voting against the school at its October meeting, and DDOT putting the development on hold on November 17, once the charter board approved the location on November 21, the property was cleared of brush and demolition of the building at 4135 Alabama began.

Just this past week, Commissioner Green and other neighbors prevailed on DDOT to stop that demolition, based on improper use of public space—apparently despite the fact that DCRA had issued demolition permits even though DDOT had expressed other thoughts on the matter.

Regardless, the ball for this second campus of Rocketship has never really stopped rolling:

A day or so after the dwelling at 4135 Alabama was demolished, Rocketship held pizza application parties in wards 7 and 8–and presented the first schematic plan for the school building to Green’s ANC.

Deep ties

Rocketship’s charter amendment application to the charter board for this second campus is undated—but the board’s staff approval memo for Rocketship, dated November 21, makes clear that the charter amendment application was submitted to the charter board on September 9, 2016.

That order of events appears to be much more compressed than what the charter board itself noted on that application:

“The entire process [of charter amendment] can take up to six months from submission of this application to board vote, including up to three months to allow for ANC notification (requires 45 days advanced notice of public hearing), 30 days of public comment, a DC PCSB-sponsored public hearing, a public vote at a regularly scheduled public meeting, and the execution of a written charter amendment.”

Nonetheless, the official DC public notification for the additional Rocketship campus was made on September 16, 2016, soliciting comments by October 17 and noting that the charter board would have a hearing on that date and a vote on November 21.

Curiously, at that November 21 charter board meeting, Jacque Patterson testified that one of the times he appeared before the ANC, it was with a charter board member present. Although I have not seen such charter board intervention with other charter applicants appearing before my ANC, charter board head Scott Pearson noted at the November board meeting that the neighborhood around 4250 Massachusetts Ave. SE is the “largest single area without a charter” east of the Anacostia, suggesting great interest in a charter school, and particularly Rocketship, locating there.

In fact, those were not the only times someone working for the charter board had apparently advocated on behalf of Rocketship.

For instance, at the February 25, 2013 charter board meeting to consider granting Rocketship its first charter in DC, Pearson himself and a charter board member gave answers to questions directed to Rocketship by charter board members. No one from Rocketship was present at that meeting to do so.

Moreover, at the November 21, 2016 charter board meeting, Pearson—not Patterson or anyone else from Rocketship–defended Rocketship’s application against criticisms contained in the 21st Century School Fund document.

It’s about the real estate

As I discovered while searching DC’s real estate assessment database, many of the homes around 4250 Massachusetts Ave. SE and 4135 Alabama Ave. SE are owned by people who are not claiming the homestead deduction for real estate taxes.

That suggests that these homes are lived in not by their owners, but by renters. Moreover, I found a fair number of dwellings immediately adjacent to the Rocketship parcels owned by the New Macedonia Baptist church–which sold two of the parcels to the Turner Agassi group.

All told, this situation makes an easier path to develop a charter school. A developer not only would have free reign to tear down any dwellings, as the area is not protected by historic designations, but would gain sizable lots for a relatively low price, even when paying over the assessed value.

As it is, with a good number of absentee owners in the area immediately adjacent, any development might be less constrained in its actions—not to mention having more freedom convincing such owners to sell by offering them prices greater than the assessed value of their properties. Absentee owners do not necessarily lose a personal home or neighborhood stake by selling–but do gain cash they might not otherwise ever get for those properties.

Patterson himself underscored this real estate dynamic when he noted at the November charter board meeting how he first approached the church for the parcels it owned there, only to be turned down. The church later approached Patterson when the mayor decided not to put in a publicly funded halfway house on one of the church’s parcels.

For charter schools, this development pathway is enabled by city code, which makes clear that public schools, both charter and DCPS, are allowed by right in residential zones like this one, which is zoned R2. Before 2006, when another charter operator, Appletree, located in a building in a residential neighborhood of Capitol Hill (also against residents’ wishes), there was no regulation whatsoever for where and how charter schools located.

Since then, all public schools (including charter schools) in residential areas are required to have a minimum lot dimension of 9,000 square feet that is at least 120 feet wide, with two parking spaces for every three staff members.

But as Rocketship’s plan makes clear, this is rather a baroque distinction. Even though the  three parcels at 4250 Massachusetts Ave. SE together meet this standard, what can be built on that land may not be very good for actual students. Not only will Rocketship’s planned building have 50,000 square feet for more than 700 students, which ensures half the space per pupil relative to a DCPS school, but there are no regulations for play areas or special offerings like art and music for DC charter school students. (Not that it matters to Rocketship, as it is not big on things like the arts.)

Not surprisingly, there is no holistic planning, either.

The body that would have the most affinity for such planning, the cross sector task force, is completely awol–although deputy mayor for education Jennifer Niles (who resigned her Rocketship board membership after becoming deputy mayor and now heads the cross sector task force), will host a private focus group tomorrow (December 19) for draft policies on mobility that cannot ensure actual reductions in mobility.

As it is, several neighbors testified before the charter board in November not only about the nine other existing public schools around the Rocketship site, but also about the fact that the site’s close proximity to the Maryland line would encourage students to simply walk across the border to go to school.

In fact, the map that Rocketship gave the ANC, showing local transit options, shows a walking perimeter that extends into Maryland. The office of the state superintendent just promulgated rules for residency verification. Clearly, no one working on those rules accounted for a charter applicant plainly illustrating how easily Maryland residents could walk to (and presumably attend) a school paid for by DC tax dollars.

Public money and private interests

Charter schools in DC finance their new buildings by getting mortgages based on future per pupil facilities allocations from the city. Each year, our city gives each charter school a set amount per pupil for facilities, about $3000 per student per year. Charter schools are free to use those funds however they wish—and no one in the city government tracks how those funds are used. The idea is that unlike by right schools (i.e., DCPS), charter schools have no city agency to build, and maintain, their buildings, so the per pupil facilities allocation provides money for that, as determined by each individual school.

In the case of large charter operators like Rocketship, they can muster outside financial help to purchase land (in this case, by the Turner Agassi group(s)), and then rent from that owner, while taking out a mortgage to build the actual building based on future per pupil facilities allocations.

Thus, the more than 700 students at this second campus means that Rocketship would get roughly $2 million a year in facilities funds from the city. That public money would then be used to pay rent for the (privately owned) land, as well as the (privately loaned) mortgage on the (privately owned) building.

In addition, the charter board staff memo from November 21 makes clear that Rocketship has about $1 million in other funds for these payments as well:

“In its financial projections, the school explains that per pupil funding is Rocketship PCS’s largest funding source, along with a $325K grant from the Walton Family Foundation, and a grant from the Department of Education Charter School Program that allots $600K per campus for start-up costs at each additional Rocketship PCS campus.”

While neighbors didn’t know about any of this until June, and no official notice of the school was made to the ANC until September, there had clearly been plenty of people planning this for some time—and making offers on the properties in question.

To be sure, people in DC historic districts can’t tear houses down willy nilly to build anything by right.

But if you happen to have a commercial building in your otherwise residential and historic neighborhood that a charter school wishes to locate in, all bets are off.

This is exactly what happened on Capitol Hill about a decade ago with Appletree. Neighbors who did not want the school in their midst lost that battle (and have been losing related court decisions since).

It is also reminiscent of how the Elsie Whitlow Stokes public charter school started. Residents opposed it in their cul de sac—all the while the chair of the DC charter board had a business interest in the building loan the school was taking out prior to starting. That board chair, banker Thomas Nida, resigned from the charter board because of those financial conflicts of interest.

But not before that school was approved by the charter board.

There is an added wrinkle here, in that Nida apparently has some connection to these parcels of land around Rocketship’s second campus.

That is, Nida is listed in DC’s online deed database as a grantee of financial interest in a property of the same square and lot that is listed in the real estate assessment database for 4250 Massachusetts Ave. SE. And the University Club of Washington, a private club for Washington’s elite a few blocks from the White House, is listed as the grantor in that deed database.

This could be a strange coincidence or even a mistake—except that the same deed database shows an adjacent parcel of land, occupied by the DC Water and Sewer Authority water tower at 4240 Massachusetts Ave. SE, with Thomas Nida as the grantee and the University Club as grantor.

So how many Rocketship schools will DC have?

The terms under which Rocketship is allowed to be in DC are somewhat unclear.

The original agreement with Rocketship and the charter board was signed in late 2014 (blacked-out signatures and all).

That 2014 agreement makes clear that Rocketship could form up to eight campuses. It defines a campus as something that “has a distinct grade-span, such as early childhood, elementary, middle or high school or a combination of the above. Accordingly, a multi-campus school may operate multiple campuses that each offers the same grade span in different facilities or operate different but distinct grade spans, whether in the same or different facilities.”

However, Rocketship’s September 9 charter amendment application for this site does not indicate it is forming a new campus, but “replicating an existing campus.”

This is a novel interpretation, given that Rocketship’s existing campus, at 2335 Raynolds SE, is in a different ward and more than two miles away—not to mention that this interpretation of “replication” appears to go against the definition of a campus in that 2014 agreement.

In addition, that 2014 agreement made clear that Rocketship’s first two campuses could be formed without any qualifications. The rest of the campuses have clear metrics in that agreement by which they must show a certain performance score before additional campuses would be approved.

That interpretation itself may be up in the air: charter board head Scott Pearson’s defense of Rocketship at the November 21 charter board meeting was preceded by his speaking on behalf of Rocketship at the February 25, 2013 charter board meeting on this subject of campuses.

Here is what I found publicly available of that exchange (bold and italics are mine):

“Mr. McKoy asked if every year Rocketship will apply to add an additional campus that it would have a PMF [performance management framework score] of at least 65.

“Mr. Pearson explained that Rocketship will not need to apply for additional campuses provided that they do not add more than one campus a year. If Rocketship chooses to open two campuses in a year then they would need to come before the board and make a request. But, if they choose to open a campus once a year and those campuses are a Tier 1, they would automatically be granted that campus and the enrollment ceiling up to a maximum of 8.

“Mr. Jones asked why Rocketship is waiting until SY 2015 to operate.

“Mr. Pearson answered that the principal reason is that Rocketship does not want to open a school until they have a school leader who they feel has sufficiently enough experience to run a school. They current [sic] have a school leader in training, the school leader will come to DC a year before the school opens to build community relationships, hire teachers, and get the school established.

“Mr. Soifer asked if opening a central office in year 0 will be included in their condition to open a charter.

“Mr. Pearson answered that there is a condition for Rocketship to have a home office here in D.C.”

Taken with this 2013 discussion, the 2016 distinction being made for Rocketship to “replicate” its existing campus at 4250 Massachusetts Ave. SE, rather than form a new campus, leaves open the possibility that the rest of its eight campuses conditionally approved by the charter board may not in fact be considered new, but simply “replications”–and thus may not need to meet the scoring standards as the 2014 agreement outlined, much less standards for public notification.

This ambiguity certainly did not impede the charter board approving Rocketship’s second campus at 4250 Massachusetts Ave. SE–even in the face of neighbor opposition and the poor public notification processes that helped generate that opposition.

The fact remains that very few DC taxpayers can know what real estate deals are being made right now for Rocketship’s other six campuses in DC—and under what conditions and where.

It’s indeed a gift for the holidays–but not for DC taxpayers.

One thought on “A Holiday Gift Like This May Be Happening in Your DC Neighborhood Right Now

  1. Thank you so much for letting the community and city officials know how Rocketship cares nothing about the communities it comes into or the people that live there. It’s a land grab and a money making machine they don’t care about the kids that will not get a good education and it’s killing the DC public schools. It’s a shame that no one seems to care.

    Like

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