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.
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.
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.
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.”