Here's a little something for those of you who think the talk of Wall Street making money off of the charter movement is worthy of a tin-foil hat:
Despite the criticism, the Zuluetas have repeated this business strategy across Miami-Dade and Broward counties. Through similar arrangements, the Zuluetas control more than 20 land companies doing business with Academica schools. These companies received about $19 million in lease payments in 2010, records show.
Zulueta said he and his brother hold a controlling interest in the land companies. The businesses also have minority investors, whom he declined to name.
On average, schools leasing Zulueta-controlled properties in 2010 paid higher rents than Academica schools with independent landlords, according to a Miami Herald review of the schools’ financial audits. Academica schools renting from Zulueta companies paid an average rent of 16 percent of their income, while other Academica schools paid an average of 11 percent, records show.
One reason for the disparity: The Zuluetas — former real-estate developers before going into the charter school business — bought and built many properties during the boom years of the mid-2000s, when land and construction costs were high. The lower-cost Academica schools are located in older, less-expensive facilities, including several schools leased from the Catholic archdiocese.
Zulueta said he was forced to provide the land for the schools because the charters could not get land or financing on their own — a common problem for charter schools, which often lose money during their first few years, scaring off lenders.
“If I didn’t do it, it couldn’t get done,” Zulueta said.
Academica pays for the construction of its schools in part through bonds sold to Wall Street investors. An Academica subsidiary issued $54 million in bonds in 2004, using mortgages on the school campuses to secure the debt. In 2009 the Wall Street rating agency Standard & Poor’s rescinded its rating of the Academica bonds, citing a “lack of information” on the company.
Zulueta said he could not recall if any school governing board had ever asked for details about the profits generated by the leases. “I don’t think they care,” he said.Yeah, why would they? Everybody's fat and happy, taking junkets to the Bahamas (seriously - read the article).
There is no one more naive than a charter cheerleader who thinks there aren't people in the "reformy" movement looking to make a buck.