Midland still upbeat on economy despite probe of charter schools

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Long a steel town until the mill shut down 30 years ago, Midland has an economy rebuilt around an unusual anchor: the charter school movement, in the form of the Pennsylvania Cyber Charter School and the Lincoln Park Performing Arts Charter School.

Hundreds of millions of dollars in public funding from school districts all over the state have flowed into the two schools across Midland Avenue from each other. The results for this Beaver County town are undeniable.

New or freshly renovated brick buildings dot the tiny borough, some the offices of PA Cyber, others privately owned storefronts and apartments. The number of jobs in the borough is up by 33 percent over 2007 numbers. Population losses, according to census estimates, have slowed to a dribble.

"I've seen its good days, bad days, now back to good days," said Don Pickering, who has run City Hardware on Midland Avenue for 45 years. The schools "can't fill that void [from the loss of steel jobs] totally, but they can certainly make a dent in it."

A federal probe touching on PA Cyber, though, has some locals in the Beaver County borough worried that the boom may be threatened.

While school was out for the summer, Nick Trombetta, founder of both schools, quit his post at the helm of PA Cyber. (He had long since ceased to have a formal role in Lincoln Park.)

In July, federal investigators searched PA Cyber's offices and those of several of its direct and indirect vendors, revealing a federal grand jury probe, which appears to be focused on unspecified former officials of the school.

Then on Sept. 17, PA Cyber's board fired the school's director and heads of human resources, finance and legal compliance. It gave no explanation.

"When I first saw this news, I got a knot in my gut, because of all of the holdings we have here," said Bill Smith, a Plum-based developer who has, since 2005, rehabilitated around 50 apartments and 11 commercial buildings in Midland.

He was in talks with another developer about a potential partnership that might bring a much-needed restaurant to the town, he said, but "this news hit with PA Cyber, and it's amazing that things just cooled off."

Mr. Smith and local business people remain optimistic, noting that both the school and federal prosecutors have said the probe does not target the burgeoning school.

"It's hard to imagine that one person could bring that whole school down," said Roxanne Doyle, who works at Sal Mari's, a Midland Avenue sandwich shop which feeds many of PA Cyber's teachers and computer professionals. "You hope everything will be fine."

'This can't be Midland'

Many river towns took steel's downturn hard, but few had a ride as dramatic as Midland's.

After Crucible Steel shut down in 1982, Midland's financial collapse forced it to close its high school in 1986. After eighth grade, its kids had to go as far as East Liverpool, Ohio, for high school. That situation spurred Mr. Trombetta, the Midland Borough School District's superintendent starting in 1995, to create PA Cyber, and later Lincoln Park.

Both are charter schools -- independent public schools that receive tuition from students' home districts. PA Cyber offers a broad curriculum delivered via the Internet to around 10,300 students who study largely in their homes.

Lincoln Park is focused on music, dance, theater and creative writing, but also teaches core subjects. Co-located with a 750-seat auditorium that regularly hosts the Pittsburgh Symphony and national acts, it has become a focal point of civic pride.

"If I woke up inside there, I'd say, 'This can't be Midland,' " said Mr. Pickering. "Midland! Who would've thunk?"

Midland's rejuvenation has been underwritten by virtually everyone who pays state taxes and school property levies.

PA Cyber gets around $100 million a year from districts whose kids choose its online school. Along with its biggest vendor, the National Network of Digital Schools Management Foundation, called NNDS, it now occupies around a dozen buildings in Midland.

Lincoln Park attracts around 600 students from 50 school districts in eight counties. That translates into revenue of $6 million last year, of which 90 percent came from the school districts. The school's main building cost $30 million to build, and this month it opened the separate $10 million Alumni Hall dining and music facility. Both are owned by a nonprofit firm.

That building boom contrasts starkly with traditional districts like Pittsburgh's, where schools have closed and teachers have been laid off in recent years.

Districts throughout the region have sought to combat PA Cyber by resisting payment of its bills and offering online courses of their own. Midland residents are aware that success generates backlash, but aren't apologizing.

"I don't see negative here," said Robert Hamilton, co-owner of Postich-Hamilton Insurance Agency. "The town looks nice. It's clean. The people that own businesses in town take a lot more pride in their buildings" than they did in the lean years after Crucible left, and before PA Cyber came along.

Mr. Hamilton's son had to attend high school in Ohio, but later worked for PA Cyber and then Lincoln Park. He parlayed that experience into a career as a lighting designer.

"We're proud to be part of the growth that's happening," said Roberta Hamilton, who is Robert's wife. "It's built up so quickly. Everything is better."

Time to sell?

Mr. Smith, the developer, called Midland a "micro-emerging market." Though national retailers and restaurateurs aren't yet flocking to the town of 2,635, leaving his freshly remodeled commercial spaces mostly vacant, his 50 apartments are almost always occupied.

"Jobs are being created," he said, "and people are migrating back into town."

PA Cyber employs 331 people in its Midland offices -- the bulk of its statewide workforce of 598. NNDS has 109 employees based in the borough, which is one-third of that foundation's roster. The Lincoln Park school and the nonprofit center from which it rents its buildings employ 136 people.

All told, that's nearly half of the people who work in Midland. Most of the rest work in an Allegheny Ludlum steel plant, which is subject to occasional shutdowns.

But what if the federal probe and staff turnover at the top scare students and their parents away from PA Cyber and stop or reverse the school's employment growth?

Midland manager Diane Kemp said PA Cyber "made things better here, and I'm sure the borough would have to make some adjustments, that's all," if the school's fortunes changed. "The people in the town have a lot of heart. They never give up."

PA Cyber's beginning-of-the-year enrollment was down around 1,000 from last year's peak of 11,300. But it had enough applicants in the pipeline to get its numbers back up to 11,200.

Mr. Smith said the prospect of a downturn at the cyber school had him "very concerned" but he got over it. Increased shale gas drilling is diversifying the economy, he said. If a proposed Shell gas cracker comes to a site just seven miles away, "the game changes," he said.

He's sold a few properties, at a profit, but plans to hold onto most for now.

Back at City Hardware, Mr. Pickering has decided that after weathering the downs and ups for 45 years, this is as good a time as any to cash out. He's got a business-for-sale sign in the window. "You've got to do it when the horizon looks good," he said, "which, in Midland, it does."

education - businessnews - neigh_west

Rich Lord: rlord@post-gazette.com or 412-263-1542. First Published September 30, 2012 4:00 AM


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