Lincoln Park Performing Arts charter school's $10M hall spurs debate on privatization
October 7, 2012 12:00 PM
Lincoln Park Performing Arts Charter School in Midland has taken on a daunting financial responsibility with the construction of the 9,000-square-foot Alumni Hall. That responsibility stems from financial arrangements that would be unheard of in the traditional public school world, but are increasingly common in the expanding charter school realm.
By Rich Lord Pittsburgh Post-Gazette
There are no sound-distorting right angles in the music practice rooms at Lincoln Park Performing Arts Charter School's new Alumni Hall. Built-in recording systems digitally preserve every rehearsal in the acoustically excellent space.
It's a perfect training ground for Corrine Savage, a senior and singer-songwriter who plans to record and release her first album next year.
"We're actually creating a Lincoln Park CD," said Ms. Savage late last month. At Lincoln Park, she said, as compared to students at traditional high schools, "We have so much more responsibility, and we're happy to have it."
The Beaver County school, though, has taken on a daunting financial responsibility with the construction of the 29,000-square-foot Alumni Hall, which includes a dining hall and state-of-the-art music and multimedia rooms. That responsibility stems from financial arrangements that would be unheard of in the traditional public school world, but are increasingly common in the expanding charter school realm.
The $10.2 million Alumni Hall is owned not by the school, but by a connected-at-the-hip, private, nonprofit organization.
Now almost one-fifth of the school's budget goes to that nonprofit for rent on Alumni Hall -- more than double what it pays for its much larger main building. The school has also guaranteed $7.8 million in bonds that the nonprofit floated to pay for the building.
Lincoln Park school officials said that the building's cost was driven by educational considerations, and was well worth it.
"Considering the significant growth in enrollment, [school officials] decided to create a building that would have the capacity to serve the needs of the school and its students," wrote Christina Zarek, a spokeswoman for the school, in response to questions. She noted that the building is "highly specialized space that includes high-end instructional technology, musical technology, special soundproofing and other studio treatments, climate controls to protect the investments in pianos and other instruments [and] specialized digital studio and lab equipment."
Traditional public school officials, many of whom feel increasingly squeezed by stagnant state aid and competition from charters, characterized the arrangement as one in which the assets go to a private entity, while the risks go to taxpayers.
Either way, Alumni Hall is a shining example of the pros and cons of the increasing privatization of public education.
Because they want to
The Lincoln Park school opened in 2006 in the Beaver County town of Midland, three blocks from its better-known sibling, the Pennsylvania Cyber Charter School. Both were founded by Nick Trombetta, former superintendent of the Midland Borough schools. That district had to close its high school in 1986 due to budget problems, and the charters have become the de facto replacement while also serving students from far and wide.
When students choose Lincoln Park school, PA Cyber or any other public charter school, their home districts must pay tuition based on a state-set formula. As a result, some districts are in a virtual state of war with the charter schools within their borders.
In Midland, though, it's "a very peaceful, cooperative situation," said Sam Aloe, the managing director of the nonprofit Lincoln Park Performing Arts Center, which houses the similarly named school. Though the Lincoln Park school now accepts students in grades 7-12, it doesn't really cannibalize the district, which has facilities for only grades K-8, he said.
Sean Tanner, superintendent of the Midland Borough School District, declined through a lawyer to comment because a federal grand jury is conducting a broad investigation that is believed to focus on former officials of PA Cyber.
Similarly, Lincoln Park school CEO Rebecca Manning was not available for interviews because of the probe. She is paid for her services to the school through Avanti Management Group, a private, for-profit firm created by former PA Cyber managers.
Lincoln Park school students study core subjects but also focus on music, dance, theater or creative writing. They come from 50 school districts in eight counties, with some, like Ms. Savage of Jefferson Hills, commuting more than two hours each way for the arts-focused curriculum.
Lincoln Park school was among 60.9 percent statewide that made adequate yearly progress and boasts best-in-Beaver-County reading scores. It reports a 100 percent graduation rate, and while most of its graduates go to local universities like University of Pittsburgh, Point Park and Slippery Rock, four last year went to the prestigious Berklee College of Music in Boston.
"Everyone is here because they want to be," said Madison Owings, a junior from Cranberry focused on classical piano and jazz singing. "I'm taking optional music courses that are really hard -- because I want to."
Both of Lincoln Park school's buildings are owned by the private, nonprofit Lincoln Park center.
It's increasingly common for charter schools to rent buildings from nonprofit entities -- and sometimes from groups with which they have close relationships. That's not necessarily a bad thing, as long as the nonprofit is focused on the civic good, said Bruce Baker, a professor at the Graduate School of Education at Rutgers University, who has co-authored textbooks about school finance and focuses on charter schools.
Told of the Lincoln Park school's relationship with the Lincoln Park center, he said it reflects "an emerging model" in the charter school world. "The school is becoming a related arm of the performing arts center."
Midland property at a New York price
Alumni Hall wasn't part of the Lincoln Park school's original plan, said Mr. Aloe. But as the Lincoln Park school's enrollment doubled, surpassing 600, serving lunch in the $28 million main building's atrium became untenable. And roughly half of the student body was walking across Midland Avenue daily to practice their instruments in subpar rehearsal space.
Alumni Hall's 520-seat dining hall boasts five 72-inch flat-screen TVs. A concrete outdoor stage looks out on a municipal park that serves as a natural amphitheater. Upstairs in the music rooms are Steinway pianos, Yamaha Clavinova digital pianos and brass, woodwind and string instruments scattered everywhere.
It didn't come cheap.
When the Lincoln Park center's chosen contractor applied for a building permit for Alumni Hall in February 2011, it listed a construction cost of $5.85 million. The building ended up costing $10.2 million.
The building was erected by Castlebrook Development Group, of Sewickley. Castlebrook's attorney, Frank Rapp, said the difference between the cost on the permit and the final cost doesn't reflect a big overrun.
The permit number, he said, "was the estimate I'm sure at the time they applied for it. ... There are costs associated with construction that are never going to be a part of that permit application, because they are soft costs," like architects, furniture and fixtures.
"That project was not far off what they estimated it would cost," Mr. Rapp said. He declined to provide specifics, citing the probe.
Ms. Zarek said the final cost was driven by decisions to add more music space. Public documents, though, indicate that the building's overall square footage didn't change as the price went up.
When a traditional school district constructs a new building, the elected board must vote publicly on the plan, the construction bids and any changes in cost. The state Department of Education must also approve both the plan and any changes.
The Penn Hills School District recently completed a new 300,000-square-foot high school that started at $58 million, and rose to $60 million due to unforeseen underground issues. The state "put us through the ringer on that" 3 percent increase, said Penn Hills business manager Richard Liberto.
Alumni Hall didn't face the same state scrutiny because the building is owned not by a public school, but by the separate, nonprofit Lincoln Park center.
To pay for Alumni Hall, the center borrowed $7.8 million, and the school guaranteed those bonds.
Another nonprofit, the National Network of Digital Schools Management Foundation, paid $2 million. (NNDS gets 12 percent of the gross receipts of both the Lincoln Park school and PA Cyber as management fees, and separately sells the schools curriculum and other services.) The state gave the center a $500,000 Redevelopment Assistance Capital Project grant for Alumni Hall.
Mr. Liberto said a school guaranteeing a private entity's bonds is "unheard of. ... It wouldn't want to be the guarantor of the bond," he said.
Why not? "The risk," he said. "In this market? Never."
Lincoln Park school agreed to pay the center $1.17 million a year in rent for Alumni Hall. That's $40 per square foot, which is up there with the priciest office space in the Pittsburgh metropolitan area.
The school pays the center more than twice as much for the use of Alumni Hall as it does for its main building, even though the main building is three times as large and expensive.
The school now pays the center a total of $1.62 million a year in rent, which is more than a quarter of the school's budget. It amounts to $2,642 per student.
"As a lease payment per pupil, that one seems high," said Mr. Baker, who has studied school facility costs nationally. The Midland school's per-student facility costs are just shy of those paid by the New York City schools and around double what is seen in most mid-sized metropolitan areas, he said.
To the students, of course, that's all secondary.
"It's really a blessing," said Ms. Owings, "to have this sort of facility in Midland."