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Fulton Science Academy breaks ground, again

Fulton Science Academy has broken ground on their new school campus, again. The site on Fanfare Way just off Westside Parkway has languished incomplete for two years in what has become a “Prospect Park” version two.

Fulton_Science_Academy_Campus

Artist rendering of the FSA campus, version two.

FSA is the formerly embattled charter school turned private school. Back in 2011 the then charter school issued revenue bonds through the Alpharetta Development Authority to construct a new campus. Grading for the project began but the school soon faced serious problems. Their charter was revoked by Fulton County citing transparency issues. Attempts to charter with the state failed. The construction project soon stalled and a bond default quickly followed. FSA has operated as a private school since.

In February 2013 a private benefactor purchased the nearly 30 acre tract of land on Fanfare Way in a foreclosure sale on the steps of the Fulton County Courthouse. That benefactor, TruGlobe Inc, still owns the land according to property records available online.

Last week the school pulled a building permit with the city to restart construction on the campus. The figures on the permit suggest the project would be approximately 70,000 square feet, about 20% smaller than the previously planned campus. The permit suggest the project costs in the neighborhood of $10.5 million.

Did a Fulton Science Academy benefactor purchase their land?

Has a Fulton Science Academy benefactor swooped in to save the embattled school’s construction project? Perhaps.

FSA’s stalled construction project off Westside Parkway was sold in a foreclosure auction this past Tuesday. WSBtv reported this week via twitter that a firm by the name of TruGlobe Inc purchased the land on the courthouse steps for $3.2 million.

TruGlobe is based here in Alpharetta, according to records at the Georgia Secretary of State’s office. Principals with the company appear to be of Turkish descent and have ties to the Turkish American Chamber of Commerce.

Or it could all be an amazing coincidence. This blogger bets that the FSA will pursue a new state charter and attempt to revive their plans for new campus.


View FSA Construction Project in a larger map

On Amana Academy, irony and lessons learned

They gave the new guy some good-natured ribbing. It was at an Alpharetta City Council meeting from a few weeks ago. Richard McLeod, the city’s recently hired director of Community Development, was on the receiving end. After just a few weeks on the job he was being “evicted” from his office space.

Evicted isn’t the right word. Community Development shares a building on South Main Street with the Amana Academy, a charter school. The school recently purchased the entire building and wants to expand into the adjacent space. Assuming the role of landlord, they asked the city to vacate their office space.

But the irony didn’t escape me as Alpharetta poked the new guy. It was about this time last year when Alpharetta rejected Amana’s request to open just off Windward Parkway. Funny how the tables have turned. The city is the one being inconvenienced. Certainly that wasn’t the intention of Amana, but it’s interesting nonetheless.

Amana’s purchase of 285 South Main is significant and a great thing for this part of the city. The building is growing older and has been in and out of foreclosure. The first phase of Amana’s buildout will be to take the left wing of the building (where Community Development is now) and convert to classroom space. It’s not clear when they will alter the other wing of the building (and if Satay House will have to move).

Along with the construction comes borrowing. Amana plans a $10 million bond issuance to fund acquisition of the building and construction. And while Alpharetta isn’t on the hook for these bonds, they will still have to approve them in a public hearing.

The process is similar to how the Fulton Science Academy’s bond issuance went down. This is Alpharetta’s chance to take the lessons learned with FSA and apply them here. In that case, Alpharetta’s Development Authority assumed FSA’s charter renewal was in the bag. The bonds were approved and construction started on their new campus off Westside Parkway.

But we know how this story ends. FSA’s charter was not renewed. The bonds went into default, construction stalled and a Prospect Park-esque mudpit is all that’s left.

While I’m not aware of any governance problems with Amana Academy, Alpharetta should proceed with caution. It would behoove the city to take the lessons learned from FSA and apply them here. Will Amana’s next charter renewal go smoothly? Or does the school system have it out for every charter school in north Fulton?

Hopefully Amana’s story ends with a stable owner of 285 South Main, a thriving charter school and a solid relationship with the school system.

How Alpharetta landed Gwinnett Tech

On Monday Gwinnett Technical College announced plans to purchase a 25 acre parcel in Alpharetta for a north Fulton satellite campus. This is a terrific win for Alpharetta and the technology scene in this area.

Unfortunately the local media’s coverage of the event has been somewhat lacking. Many stories have been near-verbatim reprints of a press release with perhaps a few comments from Mayor David Belle Isle from Monday’s Council meeting. Here’s how Alpharetta managed to hook this big fish.

Interest in a Gwinnett Tech campus in north Fulton dates back to 2009 and 2010. The school observed a growing number of students with north Fulton addresses enrolling at their Lawrenceville campus. School planners believed enrollment at a north Fulton campus could eventually approach 10,000 students.

By 2011 several entities began lining up to submit bids for the campus. At this point Alpharetta’s primary location was the Milton Center, site of the former Milton High School. It was also around this time that Sandy Springs pushed for a bid. But very much unlike Alpharetta, local opposition to the campus was immense. A divided Sandy Springs council approved their bid by a 4-3 vote. By the time spring rolled around, Sandy Springs and Alpharetta were among eight proposals for the campus.

But the project was nearly killed by the pen of Governor Nathan Deal. At the end of the 2011 General Assembly session he line-item vetoed funding for the north Fulton campus. The future of a campus here seemed bleak.

2012′s session in Atlanta showed more promise. The Georgia House passed funding for the campus but the Senate didn’t include it in their budget. It was saved in conference committee and managed to survive the Governor’s veto pen.

Gwinnett Tech wasted no time this year. The bidding process began almost immediately with proposals heading to Lawrenceville by early summer 2012.

Alpharetta’s proposal may have looked a bit different than the competition. The city favored no particular parcel in their offer but rather lifted up several that were available in the market. Included on the list again was the Milton Center and also a bit of land on Webb Bridge Road. But unlike in 2011, North American Properties now had a presence in Alpharetta. Their 25-acre parcel south of the Avalon project was included among Alpharetta’s pick list.

The package gave Gwinnett Tech leaders a choice of locations within the city limits of Alpharetta. So rather than favoring one particular location, the city could focus on other appealing aspects… like moolah! Alpharetta’s offer included an incentive of $4 million in cash.

On Monday Gwinnett Tech selected Alpharetta and NAP’s parcel. We won’t know of all the factors that lead to the decision, but here are a few that likely contributed:

Alpharetta’s financial position – Let’s face it, Alpharetta is a wealthy city with a strong tax base. And with a triple-A credit rating, it should be no trouble  for the city’s Development Authority to sell bonds for this incentive. And while all bidders were asked to sweeten the deal with cash or land incentives, Alpharetta was best suited to this.

North Fulton’s newer cities simply lack the means to keep up in this regard. On top of that, Johns Creek and Milton are hamstrung by their charters which may limit their ability to float bonds.

Milton Center was undesirable – Even though the size of the parcel was far bigger than the NAP land, the Milton Center was never really in contention. According to sources close to the deal, Fulton County Schools may have imposed unreasonable conditions on the transaction. The school was also a greater distance from GA-400.

Salesmanship of Mark Toro – Don’t underestimate El Toro in this deal. His direct salesmanship played a part in Alpharetta’s win and the selection of the his parcel. Certainly this is more than a real estate transaction to Mr Toro. How will Gwinnett Tech’s campus complement the Avalon development across the street? It will be something to watch.

At the end of the day, Gwinnett Tech’s selection of Alpharetta is a great thing. It will create enormous opportunities for tech workers to sharpen skills and ambitious high schoolers to earn college credit. It will also be yet another tool to recruit and retain Alpharetta’s top-caliber technology companies.

Deny FSA’s state charter?

Yesterday saw yet another setback for the embattled Fulton Science Academy Middle School. The Georgie Department of Education recommend the state deny their application for a charter. At this point the best coverage of this issue can be found at this article on The Patch. Also read the four page letter that outlines the reason for the negative recommendation.

Here are a few random thoughts on this continuing saga…

It’s time to resign - Hatcher Hurd over at the Revue & News wrote a great column on the FSA shortly after the county rejected the FSA charter. His opinion was very close to mine. At that time he called for the board to resign, something I thought was overkill. I’m beginning to think Hatcher was right.

This is a touchy thing to say but… FSA’s administration and board are inept. They have bungled this entire process. They’ve also bungled the construction project. Look at the BOE notes as well as Fitch’s latest bond downgrade and read between the lines. It might be too late to make a difference, but heads should roll. Parents should demand it.

Approve or reject the charter? - I don’t know. Before yesterday I would have said yes, renew it for a short duration with a ton of oversight stipulations. This would be least disruptive to the students, parents, staff, and bond investors. However, after reading the letter it seems that FSA hasn’t made any progress towards better governance and oversight in the last several months.

Charter Schools - I continue to support the concept of charter schools. They are the closest thing we have to school choice right now. Don’t view my criticism of FSA as a rejection of the charter school idea.

Gulen Movement - Some people feel called to help educate children as a response to their faith. For centuries people of my faith have done so, as have Gulen followers. I’ve read about the movement and don’t have a  problem with it. Seriously, I don’t.

I think a few (but certainly not all) FSA opponents are influenced by xenophobia. I see it in the blogs that have linked to my articles. So let me be clear… I don’t have a problem with the Gulen Movement.

Alpharetta’s bond approval - Prospect Park 2 is here. Just drive by the FSA’s now-stalled construction project near Westside and Encore Parkways. It’s a pile of dirt.

The city has some explaining to do. The Alpharetta Development Authority approved the issuance of FSA’s bonds last year. Now before I throw them under the bus let’s remember that we have hindsight that they didn’t at the time. But it would be interesting to learn more about the process the authority follows before approving bonds. Is it a rubber stamp? Did the city check on the charter renewal process? What other due diligence did the Development Authority perform prior to approving these bonds?

I’m going to nominate Michael Cross to answer these questions. He chaired the Development Authority last year when the bonds were approved. Today he’s an elected official – a City Councilman. The citizens deserve an explanation, especially those who live adjacent to FSA’s stalled construction project.

Regrettable - No matter what happens to the Fulton Science Academy, I think we can all agree that this is a most regrettable situation. It has also been a preventable situation. The students deserve better treatment than this.

Reuben Lack vs Alpharetta High School

A new controversy is swirling at Alpharetta High School and is starting to get picked up by local and Atlanta media. At this point most of the information is coming from one side of the debate, but here’s what we know.

Reuben Lack is the student body president at Alpharetta High – or I should say he was. Last month he was removed from his position by school administrators. Lack alleges that his removal was due to his support of a proposal to make the prom king and queen tradition more inclusive of gay and lesbian students. He’s retained a lawyer and is suing the school. In his suit he asks to be reinstated as student body president and seeks to be repaid damages including punitive damages.

It’s still too early to take sides in an issue like this. I personally don’t have a problem with any student being considered for prom king and queen. But it’s always been my experience that the truth is somewhere in the middle. Now that the case is in the court system it is doubtful school officials will make public comment.

But the most unfortunate part will be how this reflects on Alpharetta. Atlanta’s media never misses a chance to paint affluent suburbanites as xenophobes (or in this case homophobes). This case will likely serve as ammunition to further that endeavor.

I’m sure this story will continue to play out in the coming weeks. In the meantime, you can read Lack’s complaint as filed in US District Court (opens as a pdf). Lack’s lawyer also has a blog entry on the case. And finally, here’s an unrelated Youtube video of Lack speaking before the Fulton County Commissioners.

Fitch downgrades Fulton Science Academy’s bonds… again

This week the credit rating agency Fitch downgraded the bonds of the Fulton Science Academy. This is the second time the agency has done so since the building bonds were issued in September 2011.

My opinion in this issue hasn’t changed since I wrote about it here and here. I’ll let Fitch’s words speak for themselves as they have summed up the issue rather well in my opinion.

Tuesday, March 13, 2012 6:13 PM

Fitch Ratings has downgraded the rating on the $18.9 million of Development Authority of Alpharetta, Georgia educational facilities revenue bonds (Fulton Science Academy project) (the bonds) to ‘B’ from ‘BB-’. The bonds remain on Rating Watch Negative.

SECURITY

Joint and several general obligation of Fulton Science Academy, Inc. (Fulton Science Academy Middle School, or the middle school or FSAMS), Fulton Educational Services, Inc. (Fulton Science Academy High School, or the high school), and Fulton Sunshine Academy (Fulton Science Academy Elementary School, or the elementary school; collectively with the middle school and high school, the borrowers, or the schools or FSA), payable from all legally available revenues and secured by a first mortgage lien on the new campus.

KEY RATING DRIVERS

MATERIAL DEFAULT RISK: The downgrade to ‘B’ reflects elevated default risk related to the non-renewal of FSAMS’ charter by its local school district, a shrinking window to pursue alternative charter renewal options, and further FSAMS leadership missteps in managing key relationships.

POTENTIAL LOSS OF CHARTER: Late last year, the charter authorizer (Fulton County School District, FCSD) rejected the middle school’s charter renewal application. FSAMS applied to the state of Georgia’s Department of Education (DOE) for a new charter, but a final determination is not expected until the middle of June, just weeks before its FCSD charter expires.

TURBULENT RELATIONSHIPS CAUSE CONCERN: FSA’s recent failure to obtain required construction approvals for its project, along with the FSAMS charter non-renewal, highlight an on-going, worrying trend of management inattention to regulatory requirements.

CONCERNS TRUMP INVESTMENT-GRADE CHARACTERISTICS: Fitch notes that on a consolidated basis, the borrowers generated solid debt service coverage in fiscal 2011 and standardized test scores generally exceed state and district averages. However, these factors, which help drive positive enrollment trends, do not fully offset the concerns Fitch has regarding FSAMS’ future, and FSA’s relationship management.

WHAT COULD TRIGGER A RATING ACTION

FAILED STATE CHARTER APPLICATION: Expiration of the middle school’s FCSD charter at June 30, 2012, without a replacement state charter could result in an immediate event of default as defined in bond documents. In such a scenario, Fitch would likely downgrade the bonds to no higher than ‘C’, with a Negative Rating Watch. According to terms of the loan agreement and indenture for the bonds, the trustee could implement accelerated redemption provisions.

STATE CHARTER WITHOUT ADDITIONAL FINANCIAL SUPPORT: If the middle school wins approval of a state charter, it still faces the challenge of operating without significant revenues currently provided by FCSD. Should proposed legislative remedies fall short of fully replacing the loss of district funding, the middle school plans to rely upon internal resources, potentially diminishing an already modest financial cushion.

FURTHER ASSESSMENT OF REGULATORY RELATIONSHIPS: The elementary and high schools maintain FCSD charters in good standing.

Avalon, Goodwill, movies and a school

What do these unrelated things all have in common? They are issues that will come before the city of Alpharetta in the coming weeks. Some have the potential of being controversial. Let’s take a quick peek at each one.

Avalon

North American Properties has submitted plans for its first phase of Avalon, formerly known as Prospect Park. Hatcher Herd’s story in the Revue and News is the best source of information at this point (the city’s website almost never publishes things like site plans. Boo). According to Hatcher’s article, the project will have office, retail and hotel space, a 14 story building, 118 condos and 14 houses. But the strangest part… they want 250 apartments.

Alpharetta is already over its ratio of apartments. The folks at NAP are smart and they know this. I’m curious as to why they would even consider asking for them. My guess is that these change into more condos pretty quick. We’ll have to see.

Avalon’s phase 1 plan goes before the Planning Commission on March 1st.

Goodwill

Everyone loves Goodwill but no one seems to want them next door. Back in 2009 the city rejected plans for a Goodwill on Main Street near Cogburn Road. Now Goodwill wants to build down the road a bit at 495 North Main. An online petition from neighbors is already up and going. I expect objections this year to be the same as in 2009. Alpharetta’s Planning Commission will take up the matter on February 2nd.

At this very moment Goodwill is building a large store on McFarland Parkway in south Forsyth. This store is in a much better location and on a bigger road. My concern about a Main Street location is traffic. It’s clear that Alpharetta and Milton want less traffic and slower speeds on highway 9. A Main Street store would add 1500 trips each day. Sorry Goodwill, you need to keep looking.

Fulton Science Academy’s Impact Fees

Alpharetta’s embattled charter school will ask the city to waive impact fees on their $18 million construction project at Westside and Encore Parkways. The matter has been postponed once already and this issue has been overshadowed by the school’s charter renewal controversy.

City staff recommends that the FSA’s request be denied, requiring the school to fork over the impact fees. If the City Council agrees, will the school’s supporters use the same rhetoric from their BOE struggles? I can see the headlines now… “City denies award-winning charter school.” Tread carefully, councilmen.

Northpoint’s Movie Theater

I don’t expect this to be controversial, but it’s worth watching. On February 2nd the Planning Commission will consider the mall’s request to convert the vacant Parisian space into a movie theater. I expect we will learn the name of the theater at this time.

Photo credit: Dwight Burdette (creative commons)

Fulton Science Academy – Transparency and Accountability

This is the second of two articles about the charter renewal of the Fulton Science Academy.

Last week I talked about how both the Fulton County School Board and the Fulton Science Academy acted poorly when negotiating the school’s charter renewal. Today I’ll discuss why the FCSB was justified to insist on a shorter charter term. But first let’s reveal the elephant in the room…

The Gülen Movement

This is a loosely organized group of followers of a Islamic theologian from Turkey. Here in the states they are heavily involved in education including the formation of dozens of charter schools. Many believe that the Fulton Science Academy is under Gulen influence.

If you search the internet you’ll find a lot of websites and blogs critical of the Gulen movement. Most of them have a heavy conspiracy theory tinge to their writings.

It doesn’t bother me that people of the Islamic faith from Turkey want to open schools here. However…

Gulen opponents earned a boost of credibility when a Pulitzer Prize-winning journalist penned a story in the NY Times about the movement. Gulen-run schools have been accused of operating without financial transparency, offering contracts to Turkish-owned businesses without competitive bids and a lot more. Read the NY Times story for yourself.

Fulton Science Academy doesn’t seem to be nearly as shady as the schools outlined in this article. For example, I don’t see a Turkish connection with the contractor they selected to build their new campus. However there are a few conflicts that concern the Fulton County School Board.

Grace Institute

FSA spends taxpayer money on services offered by the Grace Institute. It isn’t clear to me how Grace consults the school except that they are an Educational Management Organization. According to tax returns the school continued to spend more and more money on Grace’s services each year. The FCSB insisted that the relationship with Grace end early in 2011. At this point it isn’t clear if all ties have been severed.

Transparency and Accountability

The relationship between FSA and Grace isn’t clear nor are how funds are spent. The linkage is unusual and makes many wonder who is the ultimate governing body of the school. And to make the waters more murky, some FSA board members also served on Grace’s board.

And speaking of boards… The FSA’s board should be made more diverse to include parents, school board officials, or possibly distinguished members of the community.

There are other potential issues but these strike me as the most severe. It isn’t appropriate to offer blanket waivers and maximum contract extensions to a school with such unresolved issues. The Fulton County School Board acted reasonably and responsibly when they insisted on a shorter charter. I believe the Fulton Science Academy is a terrific school. They have the opportunity to be a truly exceptional school if they will do the right thing and operate with more transparency.

The debt and building

And one final note on this issue… I believe the city of Alpharetta’s Development Authority dropped the ball. Here was a group that had the opportunity to question FSA’s dealings yet failed to do so. They failed to notice the conflicts of interest and they didn’t consider the rocky relationship between the school and the school board. The city approved the issuance of revenue bonds and construction on the new campus began. If the charter impasse continues, the school will shut down and default on the debt. And while the city and school board are not on the hook for the debt, a default might create an ugly new problem… another stalled development project in Alpharetta.

Fulton Science Academy – A game of chicken

This is the first of two articles about the charter renewal of the Fulton Science Academy.

It’s been difficult for me to get my hands around the issue of the Fulton Science Academy’s charter renewal. Most issues like this involving children or faith are pretty easy to grasp. Start with something like land use then combine some NIMBY sentiments and a pinch of xenophobia. But FSA’s situation is entirely different with a lot of influencing factors coming into play. Those on both sides of the issue are not afraid of employing emotional appeals or hyperbole to make a point. And in issues like this the truth usually is found somewhere in the middle. So after spending many hours of my Christmas break reading up on this fiasco, I’ve come to the conclusion that FSA’s charter renewal is really just…

A game of chicken

Yep, both sides were plowing ahead at full speed, waiting to see who would swerve first. Unfortunately those along for the ride include several hundred children, their families, taxpayers and a few bond holders. And all of these groups stand to lose big because of it.

“Increasingly volatile and combative relationship”

That’s how the credit rating agency Fitch described things between the FSA and the Fulton County School Board. They made this comment as they were downgrading FSA’s credit rating on their $19 million building bond. The relationship was volatile because each side had a big club to bring to the fight. FSA’s club was their recent Blue Ribbon Award from the Department of Education. Surely the school board would not deny a request from a school with such a high distinction. Armed with this, they asked for a ten year renewal on their charter, the maximum allowed. Additionally they requested a full waiver of Title 20 rules.

FCSB’s big club was a Georgia Supreme Court decision in 2011 that found that the state could not approve charter schools. That authority, according to the court, rests only with county school boards. It makes FSA’s appeal process more difficult. This is the FCSB’s chance to flex its muscle under the new ruling. As such, the Title 20 blanket waiver was off the table and they would only consider a three year charter renewal.

Neither side moved much after months of discussion. The FSA reduced their proposal to eight years but the FCSB made it clear that they would only consider three. Nevertheless, only the eight year proposal was brought before the school board. And at the end of this game of chicken, the FCSB didn’t swerve. Crash! They unanimously voted down FSA’s eight year request.

Both sides have acted poorly. Supporters of the FSA have been out in force claiming that the FCSB wants to shut down an award-winning school. It’s hyperbole pure and simple. It’s clear to me that the FSA wanted to force the school board into making such a vote even though another offer was on the table. Nobody desires to shut down this school.

On the flip side, the FCSB has not acted in good faith since the vote. FSA has relented (finally), agreeing to the three year term. However, the FCSB now will not consider it, saying the matter is closed. I don’t understand why they cannot move to amend or reconsider a matter that was before them. Most deliberative bodies easily have this option available under their rules. It would be best for all parties involved to approve the three year charter renewal and move on.

Tomorrow I’ll talk about why the FCSB is justified in wanting a shorter charter term for the Fulton Science Academy. And as always, there’s an elephant in the room that needs to be discussed. Stay tuned.

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