The Pink Hula Hoop–Part 1: Is this the future of public schools?

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The future of education in Newark?
The future of education in Newark?

Keeping public education public and out of the grasp of privatizers won’t be easy.  The  people behind it all make following the power and the money deliberately complicated.  Consider  the story of the Pink Hula Hoop, a convoluted tale of big money and insider contacts that could be the future of public education.

The front archway over the 18th Avenue School
The front archway over the 18th Avenue School

Pink Hula Hoop—more correctly “ Pinkhulahoop1, LLC”—is a profit-making company, one of four legal entities created to, among other things,  raise money for the Team Academy Charter schools in Newark so it can buy and occupy public schools put on the auction block by the state-appointed school administration in New Jersey’s largest city. The Team Academy is considered a “region” of the better known KIPP charter schools.

Although it is a separate limited liability company—a cross between a corporation and a partnership—the men and women who run Pink Hula Hoop are really the same people who run the charter schools. Some might call it a front organization; others would probably see it as a complex legal maneuver to help the charter schools raise cash from private and public sources.

Pink Hula Hoop was created specifically to aid Team Charter Schools in the purchase of Newark’s Eighteenth Avenue School, an elementary school that sits on 2.6 acres of land on the border of the city’s south and central wards. The school was built in 1876 and sits on land given to the city by the Krueger family, the people who helped make Newark the beer capital of the country.

The property was assessed by the city at nearly $10 million but, like all municipal assessments, that probably was unrealistically high. An appraisal conducted for the sale valued it at $5.3 million. Cami Anderson, the state-appointed superintendent of schools sold it to the charter school—well, to Pink Hula Hoop–for $4.3 million. She has the power to do that— by herself—under state law, as long as the state education department agrees.  Which means  if Christoper Cerf, the state education commissioner, agrees.

Cerf has a history with the people behind the deal.

The members of Pink Hula Hoop—the partners—are listed in one document as Timothy Carden, Hannah Richman and Dan Adan.  Carden, his wife Amy Rosen, and Cerf were all once partners in the Public Private Strategy Group (PPSG) which, among other things, helped New York City’s school privatization efforts. Carden  is also chairman of the board of Friends of Team Academy Charter Schools, the fund-raising arm of the charter school. Cerf, before he became commissioner, also was a member of the charter school’s trustee board. Now, he says, he recuses himself from any decision involving he school. Including, one wonders,  any decision that generally helps charters, including Team Academy? Right.

Carden, who served as a cabinet member in  Gov. Brendan Byrne’s administration and unsuccessfully ran for Congress in 2002, also is a principal of Kingston Educational Holdings, Inc., a non-profit. Kingston received $25 million in financing from the New Jersey Economic Development Authority (NJEDA) to purchase and renovate property for charter schools. Carden was once a member of the board of the EDA.

Carden’s wife, Amy Rosen, is chairman of the board of the Team Charter Schools. Adan is on the school’s trustee board. Hannah Richman plays a role in all four corporations. The Cardens and Richman live in Montclair where Cerf lives, or lived, depending on who you believe.

Not a lot of degrees of separation in any of this.

Carden is managing director of Public Financial Management, Inc., headquartered in Philadelphia. Rosen is president and CEO of the Network for Teaching Entrepreneurship, a “non-profit organization that provides entrepreneurship education programs to young people from low-income communities;”  she also describes herself as education adviser to Cory Booker, the former Newark mayor now US senator. Richman works for the Team Academy charter school but once was director for charter school development in the Massachusetts Department of Education. Adan, who worked as an analyst for Goldman-Sachs, now  works as an Analyst in the Risk Arbitrage group at Perry Capital in New York.

So this is how it all works: Team Charter Schools wants to buy public school property and Cami Anderson wants to sell it.  Friends of Team Charter School offers to buy 18th Avenue school. It assigns all its “rights and obligations” under the sale of contract to Pink Hula Hoop, a wholly owned but profit-making subsidiary of Kingston. Pink Hula Hoop borrows the money from Kingston, who got it from the state,  to buy the school and embark on what is expected to be an $18 million renovation.

Got that?

After the dust settles and the lawyers who thought this all up are paid, Pink Hula Hoop, a for profit company,  will own the school and rent it to Team Academy Charter School.

There is more to come—or, as they say in the journalism business, MTK—but this first part cannot be concluded without answering some more obvious questions. Is the arrangement legal? Ryan Hill, the executive director of Team Academy Charter Schools, says the complicated arrangement was designed to take advantage of tax and other laws in a way that would maximize the benefit to the charter school.

“No individual is making a profit,” he says. “The only benefit goes to the school.”

Except, maybe,  the people who buy the bonds  used in the financing. The Wall Streeters.

Now to explain the odd  names: Kingston Educational Holdings, Hill says,  was named after the mascot for the LA Kings basketball team, Kingston. One of this group’s financial consultants worked as the mascot. Pink Hula Hoop was chosen after a brain-storming session designed to come up with a name that didn’t sound quite so financial sinister as most real estate development corporation names do.

“It may have backfired,” says Hill.

Tomorrow, leaders of the Newark Teachers Union are expected to hold a press conference to explain more about Pink Hula Hoop. Union staff members did a lot of the initial research.

MTK

Bob Braun: This statement from the state Department of Education came too late to include:

“The sale of 18th Avenue School, as it is for any public school, is subject to the approval of the state.  The local school district must submit a request to the Executive County Superintendent, who performs the initial review.  The ECS then sends the request to the Office of School Facilities in the Division of Administration and Finance for its review and determination.  In the case of 18th Avenue School, DOE’s Office of School Facilities reviewed Newark’s request and approved the sale of the building in July 2013.

“As outlined in the process above, the sale of the school did not come to the Commissioner for approval.  Also, FYI, the Commissioner has recused himself from all matters involving TEAM schools for the past three years.

Commissioner Cerf had a business relationship with Mr. Carden nearly a decade ago, focused on education outside the state of New Jersey.”

MTK

 

28 comments

  1. Newarkbluesman

    Wow,so it is all for the children,charter schools,I think barter schools,so pink hula hoop a company in existence for a week,with zero assets now owns a schools,no,I mean team academy owns a school…Bud Abbott and Lou Costello are busy asking who is on first.

  2. Becca Field

    More to come? It will be revealing but I already know enough to be outraged. The response to this blog maybe that there is nothing illegal about what is being done in buying public property for charter schools in this manner. That is not a satisfactory answer at all – in fact such an answer would make this more appalling. Subprime mortgages were legal as I recall, and so were the insurance policies bought against them. This is taxpayer money to be used to educate our next generations and if it is to be used by charters it ought to be completely transparent and not for profit. And forgive me, but a lot is in a name – how about TEAM Building for the corporation charged with buying properties for TEAM schools? Pink Hula Hoop, yes Mr. Hill, I do believe it backfired.

    • Orlando

      Didnt Mayor Sharp James go to jail for the same idea??

      Bob Braun: Pretty similar. But the prosecutor who went after him and Tamika Riley is governor now and a friend of the commissioner and his Wall Street pals and so, you know, I wouldn’t expect very much. And US Attorneys apparently have a better union than Newark teachers so one does not go after another.

  3. Chane

    Readers need to share this article with their Fb and Twitter friends and families. Let them know how all she reformed was how tax dollars get into the hands of private friends of the Commissionor of Education.

  4. Newarkbluesman

    The loss of a public school,is a big deal in any community in New Jersey.Newark schools are so much a part of its history.That building was given to Newark by the Kruger family,Beer barons.Over its door is an inscription,that says ” beyond these doors a public school,the last bastion of democracy”Never thought it would say FOR SALE.In this case to the only bidder.

  5. Mark

    Bob- Hope your eating your veggies. We need you around for at least another fifty years. Thank you so much for your journalism. These universities should be throwing interns at you.

  6. c.

    I find it so interesting that it is the TEACHERS UNION that will be exposing this publicly. This is barely-hidden, good ol’ boy network profiteering by the corporate reform players named in the article. What they profit from is every taxpayer’s tax dollars. We’re ALL being ripped off. YET, all we hear from those who support these insidious reforms are: “Oh, those teachers union thugs. All they care about is saving their own jobs and high salaries. They don’t care about the kids”. The reformers in this piece do? Who’s REALLY looking out for parents, schools, kids?

  7. Charles L Dodgson

    Welcome back to the only man who created sweat on the palms and brows of DOE officials. The Chris Christi thugs go from closing lanes on the GW Bridge as punishment to selling schools to gang members as rewards. Luckily they don’t yet employ guns to silence their opposition. But that will be next.
    Suggest certain bloggers need to wear bullet proof vests. These nothing that the Christie thugs are capable of doing. Retribution for opposition to there leader and Presidential front runner will be carried out swiftly by his hopeful future Whitehouse Staffers. Their loyalty has no bounds nor their ambitions.

    Bob Braun: Good to hear from you again. I need your help now more than ever. Please keep in touch.

  8. Source1

    Great investigative reporting Bob. I wonder what our buddy Tom Moran at the Ledger has to say about this one. I just sent something over to Moran, reminding him that if he wishes he certainly has the right to continue to support Governor Christie and Newark Superintendent Cami Anderson. However, he is standing on a shrinking piece of real estate. When he does has to leave town, I home he doesn’t try to take the George Washington Bridge – not in an election year anyway…

    Bob Braun: Thanks for this. I guess I can write freely because Tom has promised never again to read anything I’ve written. He is not an unintelligent man but he is a sucker for power. That’s a problem with many journalists. He made a serious mistake endorsing Christie and falling in love–only professionally, of course–with Cami, but he will pay for his indiscretions, the way poor Bridget Anne Kelly will pay. Moran will continue his contention no one ever got rich supporting charters–but a lot more will come out about the new market tax credit and the interest earned on bonds issued by charter schools. I’m sorry to say Tom forgot what it meant to be a journalist. He’d rather believe he was a player.

  9. Jersey Jazzman

    How can Ryan Hill possibly say no one is making a profit when:

    “After the dust settles and the lawyers who thought this all up are paid, Pink Hula Hoop, a for profit company, will own the school and rent it to Team Academy Charter School.”

    PHH has a GUARANTEED tenant, paying rent with taxpayer funds. When the bonds for the property are paid off, the state won’t own the property, and neither will TEAM as a non-profit: a private entity will own the building.

    Of course someone is making a profit. It’s absurd to say otherwise.

    • Bob Smith

      The reason no one is making a profit, and I don’t blame you for missing this since the author appears to have gone out of his way to make this obscure, is that while Pink Hulu Hoop is a for-profit entity, it is WHOLLY OWNED by Kingston, a charity. No one can make money off of the for profit. In fact, if the author understood anything at all about the tax laws relating to not-for-profit entities, he would know that it is very common, and in fact very ofter REQUIRED UNDER THE LAW for certain types of activities of charities to be carried out in taxable subsidiaries, so that the tax exempt entity is NOT used as a screen for making profits. Look up the concept of unrelated business taxable income and read it.

  10. Robert Langdon

    It is all coming home to a roost but instead of chickens the bad consequences of the corrupt actions of Chris Cnristie administrations’ actions inevitably coming to pass. The present Bridget Bridge Bust is only the tip of the iceberg of retaliation, payoffs, bullying, corrupt practices, and appointments of incompetents discovered in this deep freeze in the weather. The goal to achieve the presidency is so great that all involved are corrupted by the vision of achieving a place in the Whitehouse. Just waiting for Christie to say “I am not a crook” to return the memories of forty years ago. The Christie tragedy has come as with all Shakesperian Kings driven by the same greed and avarice. This is not “Much Ado About Nothing” and “Taming of the Shrew” has its Chris along with a Kate name Bridget Anne Kelly.

    Bob Braun: And his offence is rank and smells to heaven.

  11. Wyatt

    This article shared an inspiring story. I truly enjoyed learning the pink hula hoop part 1 and the way everything turned around to the favor of team academy is truly amazing. Thanks.

  12. P. Grunther

    This is important information and I thank you for doing the research and getting the word out. Now I’m anxious to read “Part 2”.

  13. Graynle Edwards

    I wonder what public interest organization will question the legality of these transactions.They have mark similarities to the housing scandals during 2006-8.
    The threats to the survival of the public schools are directly connected to governmental authorities who permit and endorse such maneuvers in the name of “School Choice”

  14. Joyce Kaack

    Sadly these types of companies are popping up everywhere. Look at the one behind a similar situation in Highland Park ( forgive me I don’t remember the name of the company) where principals and secretaries are getting tossed because they won’t do what the Superintendent wants them to do. NJ is becoming a bullying state. No one likes a bully. Ironically the anti-bullying was created by the biggest bully in the state. Therefore, we can only expect the same behavior from those he put into power. Birds of a feather, you know.

  15. caligirl

    I think the saddest thing is the ignorance and disrespect for the original donation to the community of the school. These grabbers with their greed have no concept of the bigger picture of what a local neighborhood free and public school means to the greater democracy.

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  18. Janet

    Notice how so many nefarious players here are denizens of Montclair. It’s like Revenge of the Body Snatchers. The liberals woke up one morning and the pod people had taken over.

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