Tuesday, February 9, 2021

PA: A Reminder That Charter Schools Are Businesses

Who do you suppose might have said the following:

During the last few years, we’ve created a complete business ecosystem at The Waterfront. This strategic purchase was the natural next step as we continue to expand our operations.

A: A classroom teacher
B: A building principal
C: A corporate VP in charge of mergers and acquisitions
D: The CEO of a cyber charter school

The answer is D, and the speaker is Thomas Longenecker. Longenecker is the CEO (former COO) and president of Commonwealth Charter Academy (CCA); he's also an adjunct professor of school finance and school law at Wilkes University, a PA university that specializes in online degrees. Before all that, he was business chief at two different school districts. His LinkedIn profile has a 13-year gap between his college graduation with a BA in business and his first school district job. 

CCA was launched in 2003 and has become the biggest cyber charter in PA. Their website leans heavily on the "It's free!" angle. They used to be called Commonwealth Connections Academy until 2016, and the website under that name is still live. Because--the name change coincided with the dropping of Connections Academy LLC as their education  program provider, but Connections Academy remains one of the Pearson cyber school brands still busily working the ed biz. Commonwealth Connections, owned by Pearson, at one point employed a guy named Mickey Revenaugh as a lobbyist; Revenaugh was also the corporate chair of the ALEC education task force. It gets confusing--CCA's 2017 990  shows them contracting with Pearson for $24 million worth of learning management platforms; that's less than half of the $54 million they spent in 2016, but it's not like they completely cut the cord. And previous year's costs for Commonwealth Connections to run CCA were in the $21 million range. 

Tracking personnel is tricky-- Longenecker's LinkedIn profile has him becoming CEO in 2019, but the previous CEO (Maurice Flurie) didn't leave the post till July of 2020. Flurie previously turned up whenever the industry needed a spokesperson or some favorable testimony in Harrisburg. Now he's running the Flurie Solutions Group, a four-year-old outfit that appears to have no website, but in an interview he's described as "a cyber education expert who specializes in aiding school systems, government entities, and private companies to develop plans." 

Why did Flurie bail last year, just as pandemic conditions were painting a rosy future for cyber schools? I don't know-- but the new guy is doing well. The quote that we kicked off this post with is from news about a big real estate deal in Pittsburgh, where CCA has purchased a redeveloped office complex that used to be a Macy's (at the Waterfront, for y'uns who knows your burgh). CCA had previously leased the first floor of the complex (about 70,000 square feet); now they will own the whole building, while the same company they previously leased from will manage it for them. That company--M&J Wilkow (creating value in real estate)--had originally purchased the building from Macy's. "When we purchased the building from Macy's, we knew it would be ideal for business tenants."

This is not the first time CCA has bought up some shiny real estate; last September they spent $15 million on a the former headquarters of Ricoh in the Greater Philly area. Fun side note; in that story we learn that there is such a thing as a "charter school niche broker," in this case Avison Young, a nationwide real estate company. Back in 2016, CCA bought the former PA State Employees Credit Union hq in Harrisburg for $5 million, to replace several leased offices. They had headquartery plans for about 90K square feet the use of the 180,000 square foot building; the rest they planned to lease out. Google says the address is now 1 Innovation Way, and PSECU is one of CCA's tenants.

It's a lot of money. So is the roughly $8 million CCA reported spending on advertising in 2017. We might know more about how CCA is spending PA tax dollars, but there are no 990s on file later than the 2017 year, and the state hasn't audited them since 2012!

Bottom line here is that CCA has an awful lot of taxpayer money to throw around on real estate and advertising and pursuing a expansion of operations. CCA is a business, a very profitable business that actually doesn't do very well on the teaching students part of the business, but does quite well on the making money part. Pennsylvania's cyber charter industry, like California's, is long overdue for reform. Let's hope the newest attempt to institute such reforms is successful.







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