NYC Starts Cutting Checks for Charter School Rent

When Alec Diacou was planning to open Rosalyn Yalow Charter School in the South Bronx, he expected to stretch his resources pretty thin, partly because of the high cost of real estate in the city. Whatever money was left, he assigned to faculty.

“Our budget originally was very skimpy on the front office because we were devoting everything to our teaching staff,” he said.

But now New York City has to pay much of his rent, which will total about $550,000 the first year. For Diacou, that means money available to fund a math expert and two staffers to work with parents.

The switch is a result of a state law enacted last year that forced the city to pay rent if it declined to give a charter school space in a public school building. It was a political byproduct of  Mayor Bill de Blasio's clash with charter school leader Eva Moskowitz over the siting of three of her Success Academy schools. And it has been "a boon to charter schools," according to Ric Campbell, executive director of South Bronx Early College Academy Charter School.

Like Diacou, Campbell said he's planning to hire more staffers as a result of the rent money from the city.

Previously, charters that were not housed in public school buildings had to pay their own rent. They used the per-pupil money received from the state, at a rate below what district schools receive. The charter lobby argued for years that this was unfair because not all charter schools could rely on deep-pocketed friends.

Not only new charters benefit. Existing charters that currently lease their own spaces are allowed to claim rent from the city — if they added a grade of students in September.

WNYC counted almost 30 charters that fall into this category. Technically, they applied to the city for space in public school buildings and were denied. That enabled them to appeal to the state education commissioner for city rent instead. While some cases are not resolved, the city has told many charters they could expect to receive rent checks by the end of June. 

As first reported by ChalkbeatNY, the city budgeted about $10 million in charter rent for this current school year. This includes rent for three former Catholic schools used by Moskowitz’s charters. It’s planning to spend another $22 million in the 2015-16 school year. Those numbers are rough estimates; the Department of Education still has to review leases for each charter to determine a total payout.

Then, things get more complicated. State law requires the city to pay an extra 20 percent of the per-pupil aid charters already receive, which is about $2750 per child this year. If it works out to be less money, the city can pay whatever percentage of the total rent is occupied by new students.

Several charter operators told WNYC they expect to receive the $2750 maximum.

“We’re making the case to the city that we should be reimbursed for all the costs associated with our rental of these private facilities,” said Susan Pollock, chief real estate and planning officer for the Ascend network, which rents four charter school buildings in Brooklyn. She said her network has made extensive renovations in addition to paying rent. Like the other charters, she's also planning to hire more staffers with the extra funds.

The Department of Education won’t comment except to say that it is studying the leases and that it will follow the law. The state is required to chip in after city spends a total of $40 million on charter rent.