New Charter Application from String Theory Charters: Joan Myers Brown Academy

by Deborah Grill

Location:  3905 Ford Road (former Wordsworth Academy)
Grades:   K-8
Neighborhood:  Wynnefield Heights
Projected enrollment:   600 in year 1 (K-5); 900 (K-8) by year 4
Management Company:  String Theory Schools
Cost to District for 5-year term:  $49, 253, 959

String Theory Charter Management Company (STS) has applied to open a new charter school, the Joan Myers Brown Academy (JMBA), a K-8 school focusing on the performing arts in the Wynnefield Heights Section of Philadelphia.  The school would be located in the former Wordsworth Academy building at 3905 Ford Road and would recruit students from the 19131, 19151 and 19139 zip codes. String Theory expects to enroll 600 students in year one in grades K-5 and 900 students by year 4 with the addition of grades 6-8.  String Theory already operates the District’s largest charter–Philadelphia Performing Arts charter, a K-12 school located on 3 different campuses in 2 separate neighborhoods, in buildings owned by DeMedici Corporation and DeMedici Corporation II, companies that are described in a 2017 financial statement as “legally separate, tax-exempt component units of the School.”

The application for the  for the new charter school states  that “JMB Academy, as a K-8 String Theory Charter School, is dedicated to Growing the Next Generation of Creative Leaders. This new charter will build upon the successes of the foundational models of Philadelphia Performing Arts Charter School and the Philadelphia Charter School for the Arts and Sciences at H.R. Edmunds.”  The application also says, “In order to maximize the availability of quality education options in West Philadelphia, it is our belief that it is essential to have a local enrollment preference and due to the high demand of our school model believe there will be more than enough interest to meet enrollment estimates.”

Some of the concerns presented by the Charter Schools Office Staff at the January 22 hearing include:

  • Materials omitted in Science and Social Studies curriculum
  • No curriculum for the Arts or Technology despite the presentation as a school focusing on the Arts and STEM
  • Inadequate details regarding geographic enrollment
  • Inconsistent relations between String Theory Schools CMO and the proposed charter school
  • Budget/salary/authority/health insurance details contain inconsistencies
  • Inconsistencies on services to students with Special Needs and English Language Learners
  • Insufficient information on renovation readiness
  • Flawed analysis of the community and its needs
  • Lack of inclusion of the 14 public and charter schools in the targeted zip codes
  • Inconsistencies in staffing plan

Concerns: 

The application’s narrative states that JMBA would have a proposed catchment area inclusive of students within the 19131, 19151, and 19139 zip codes.  That would mean that local public schools would lose students who transfer to JMBA, thus causing hardship to those schools while increasing stranded costs to the District.  However, it also states that “we are amenable to working with the School District of Philadelphia with regard to the attendance zone and enrollment preferences” and does not include preference to zip codes or neighborhood in the Admissions and Lottery documents (Attachment #24).

The application states that String Theory Schools has a waitlist in the thousands, and that this new school has community support, founding parent and teacher coalitions and “1,800 signatures of parents and community members pledging their support for Joan Myers Brown Academy in their own neighborhood”. However, String Theory included no “intent to enroll” forms from prospective parents for JMBA in the application or any petition with 1,800 signatures.

While it touts the success of its existing schools, String Theory fails to mention that the demographics of its existing elementary, middle and high schools ( 51% white, 60% female, 40% living in poverty) do not reflect the racial or economic demographics of the District (14% white, 48% female, 74% living in poverty).  So it is a surprise to read in the Narrative attachment to the application for JBMA, “The racial and ethnic composition of the School District schools will not be negatively impacted by new charter schools. Transparency in the lottery process and broad outreach will ensure the randomness of the admission process, thus protecting current efforts regarding desegregation.”   

The one String Theory Renaissance charter, Philadelphia Charter School for Arts and Sciences at H.R, Edmunds, which does reflect the District’s demographics is in the Intervene category in Achievement according to its School Progress Report, with a score of 16, down from the previous year’s score of 18. It is in the Watch category in Overall and Progress categories.   String Theory’s charter for Edmunds was up for renewal in 2017, but it hasn’t yet been renewed because String Theory has refused to agree to the terms of the new charter which would rectify the deficiencies cited in the renewal report. Ironically, in their concluding remarks, the String Theory representative stated that String Theory would exceed required standards and that “we will hold ourselves accountable”.

Curriculum and Culture

JMBA intends to use the Wit & Wisdom English and Fundations curricula for ELA,  Eureka Math and Foss Science. The narrative states that students in grades K-4 will have 6 hours per week of creative and performing arts including Innovations in Science and Technology (in addition to core Science), Classical and contemporary Dance, Visual Arts, Instrumental Music, Vocal Music and French.

Students in grades 6-8 will choose a major in Instrumental Music, Vocal Music, Dance, Theatre, Visual Arts & digital Design, or STEM (science, technology, engineering, math).

Concerns:  

There is no curriculum offered for the arts and social studies.  The application states that those will be addressed through the English, Math and Science materials.   While the school is named after the founder of a prominent dance company, and dance is to be included in the course offerings, there is no curriculum for dance and no dance teacher positions in the budget.   

Founding Coalition

String Theory is a politically connected organization.  The 13-member founding coalition for JMBA includes:

  • Kendall E. Alexander,  the Director of Communications for State Senator Art Haywood
  • Randy Robinson, a Pennsylvania registered lobbyist who includes String Theory Schools as a client and who has worked on 11 recent political campaigns including Pat Toomey for Senate, Tom Corbett for Attorney General, and Seth Williams for District Attorney
  • John McDaniel, a consultant who worked on Michael Nutter’s mayoral campaign and has held several positions in city government under Nutter and other mayors
  • Kenyatta D. Donley, Marketing  expert and former Communications Consultant for former State Representative Kenyatta Johnson (now a City Councilmember).

The founding coalition also  includes:

  • Jason Corosanite, co-founder of String Theory Schools
  • Donald D. Moore, Pastor of Mt. Carmel Baptist Church
  • Erica Booth, an accountant with a business located in the proposed catchment area
  • Joshua Waxman, a franchise manager
  • Loraine Henry, retail services manager
  • Lawrence Washington, an executive  chef
  • Lynette Luckers, a professor and “expert” in counseling
  • Zyhkeya J. Waller, Executive Director of Multi-Therapy Services, Inc/ WES

Concerns:  

One of the founding coalition members, Randy Robinson, is a registered lobbyist who lists String Theory as a client. Also, String Theory is employing M/R Strategies, the consulting firm of Mr. Robinson and founding coalition member, John McDaniel.  In 2013, John McDaniel admitted to defrauding Councilwoman Blondell-Reynolds’ political action committee of more than $100,000 and served time in federal prison.   

Proposed Board Members

  • Javier Kuehnle (President), President & CEO of Spalding Automotive, Inc., and current President the Board of String Theory’s existing charter schools and DeMedici Corporation II,the corporation that brokered the purchase of the Vine Street high school building and to whom STS is in debt
  • Ronald M. Pigliacelli (Treasurer), current treasurer of Demedici Corporation II and retired Director of Import Operations of The Deb Shop
  • Evelt Vertil, independent contractor and “life coach”
  • Donald D. Moore, pastor of Mt. Carmel Baptist Church
  • Kim Y. Bears-Bailey Associate Artistic Director of The Philadelphia Dance Company

Concerns:  

According to the DeMedici II 990 report, Javier Kuehnle and Ronald M. Pigliacelli are also President and Treasurer of  the DeMedici Corporation II, the company which bought the String Theory High School building at 16th and Vine Streets. Philadelphia Performing Arts Charter, now the largest charter in the city, had two campuses in South Philadelphia. The new campus was approved as an amendment to the SRC in 2015; that is, String Theory did not apply for a new charter and there were no public hearings on this expansion.  All three campuses, two in South Philadelphia and one in Center City, are considered one school by the District.

Notes to the financial statements for the year ending in June, 2017 state that  “DeMedici and DeMEdici II Corporation are legally separate, tax-exempt component units of the School.  They were organized to acquire and construct the School’s facilities.” It is unclear how these corporations function as components of a school.

String Theory’s high school,  located in the former Glaxo Smith Klein building, was financially secured through a highly unusual $56 million tax-exempt loan from the Philadelphia Authority for Industrial Development–“the largest bond deal of its kind in city history”, according to an article on Sept. 14, 2015 in The Inquirer , which said that “…it is also the most conspicuous example yet of a risky, expensive and fast-growing financial scheme underpinning the rapid expansion of Philadelphia charters–a bond market now worth nearly $500 million. But the bond financing behind the mountain of money gets little scrutiny as to whether the debt is a smart use of Pennsylvania’s limited education dollars.”  In that same article, former District CFO Michael Masch said, “There are no new students coming into the Philadelphia school district and yet we’re building all these new schools. At some point, you’re going to have to start closing schools…[W]hether it’s a plan or a strategy or an unintended consequence, the reality is that you have brand new buildings for charters while district schools are falling apart,” Masch said. “You’re starving one system to fund another.”

According to the that same article, String Theory spends one-third of its operating budget on debt and building costs, more than it spends on teacher salaries. This is due to the high interest rate on the bonds.  The school has had to cut course offerings and student transportation because of the massive debt. The authors surmise that the pressure of this debt could leave the school to press for expansion–more students bring in more tuition money from the district to pay off the debt. Real estate, not education of students is primary.  

Financial statements in Attachment 41 of this application indicate that String Theory Schools currently owes DeMedici II millions of dollars; the debt could total over $130 million up to year 2043.  If they don’t default on the loan, String Theory Schools, a private non-profit, will have acquired an expensive and lucrative building in a desirable Center City location using taxpayer money. If they do default, the DeMedici Corporation II, indirectly owned by String Theory board members, will be able to profit from the sale of the building. Either way, taxpayers lose.

Finances

According to the application, JMBA will pay String Theory  “a management fee of 7% of all charter tuition payments; 7% of gross receipts, less the charter payments, plus office space at the school and reimbursement of all expenses… JMBA would also reimburse STS for expenses incurred by STS on behalf of JMBA, including costs incurred before approval of a Charter and before execution of the Agreement including postage, printing, third party payroll processing costs of fingerprinting and background checks of staff and others in contact with the students, checks, third party consultants, first year startup expenses, travel to and from the school, all as set forth in JMBJ budget, approved by the board of Trustees.  This reimbursement shall be paid each month beginning with the month in which JMBJ received per phil funding form the government.” The attached proposed budget indicates JMBA will incur management fees of $503,914.00 in year 1 and $601,580.00 in year 2.

According to the financial statements attached, the annual payment to STS was $2525 per student, totaling over $4 million over 3 years (2014-1016) for students in their two Philadelphia charter schools.  According to the District’s Quarterly Report for the period ending June 30, 3018, String Theory Schools received a total of $32,827,907 from the District for the two schools for the 2017-18 school year.  According to the financial information included in the application, String Theory’s deficit in 2017 and 2016 was over $6 million.

The proposed budget for the JMBA indicates that the cost to the District over its 5 year charter would be $49,253,959 as stated below:

School District Subsidy    Year 1          Year 2            Year 3           Year 4            Year 5

Regular Education         4,844,821     5,765,337       6,720,735      7,712,044      7,866,285

Special Education          2,353,944       2,828,656      3,329,733      3,858,328      3,974,078

Total                                 7,198,765       8,593,993     10,050,468    11,570,371    11,840,362

Total for 5-year term:    $42, 253, 959

String Theory intends to rent the facility on Ford Road with intent to buy.  According to the proposed budget, $7,362,959 would be allotted for rent and new construction over 5 years.  If they eventually buy it, String Theory would have to acquire another high interest rate bond; thus, String Theory will own another building bought with taxpayer money that could have gone to the students in District schools.

The new school will retain Sand & Saidel, P.C. as general counsel, Santilli & Thomson as business controller, and MR Strategies for community development and engagement.

According to the proposed budget, JMBA will pay Santilli & Thompson $178,300.00 in business fees over the course of the first 2 years of operations.  During that same span the school will pay $197,900 in Audit and Legal Service fees.

Concerns:   

Santilli & Thompson also handle the DeMedici Corporations I and II.  Gerald Santilli, co-founder and former CEO of Santilli & Thompson, is listed as the Controller of DeMedici Corporation on the 2017 990 report.  

Both Santilli and Thompson were Philadelphia School District finance officials before founding their firm.  Santilli spent 14 years as executive director of fiscal management. He left to found Foundations, Inc. a charter consulting non-profit.  According to Briggs and Wigglesworth article:

Santilli personally helped found several other schools, like First Philadelphia Charter and its sister school Tacony Academy, before starting his own consulting firm with Thomson.
“After a while, it appears [Santilli] realized that this could be a lucrative and growing business, and that he could make more money doing the work on his own,’ said former school district chief finance officer Michael Masch.”  

His firm has helped in many charter bond deals and has made millions off consulting contracts and bond fees.  (Santilli and Thomson are also representing American Paradigm in its application for a new charter this year.) Sand & Saidel have worked closely with Santilli & Thompson on charter business for several schools.

MR Strategies’ website has no information, just a place to send them your email address .  Its Facebook page lists two of JMBA’s founding coalition members, Randy Robinson and John McDaniel, as its only team members.   Its Facebook page says it is “a government and community engagement organization working with Philadelphia Charter Schools.” The page offers no other information  other than contact information and a link to the website. This leads me to believe the firm was just set up recently to do business with String Theory Schools and again presents a potential conflict of interest.

Vote No

The representatives of String Theory Schools at the January 22nd hearing presented the new school as more of a business concern, not an educational one.  One came away with the impression that String Theory was more interested in expanding its corporate footprint through increasing its enrollment number of Philadelphia public school students than providing a quality educational experience for students. In a January 7, 2019 Philadelphia Inquirer article on the new application, co-founder Jason Corosanite was quoted as saying that this school is “one of 20 new locations String Theory is looking to open around the country.”  In fact, in its application for the new Joan Myers Brown Academy String Theory Schools actually outlines a plan that sounds more like a business model than an educational goal: “String Theory has successfully managed large-scale growth of its schools in the areas of both student cap expansion and facility acquirement.”  In addition to its plans to go national, String Theory envisions taking over entire catchment areas within the city according to a February 1, 2019 article:

But it’s eyeing a bigger expansion: It wants to build schools to replace the district’s in some neighborhoods, a takeover it says would spare the district from having to make costly repairs to its aging structures… Overbrook  “is an area we are particularly focused on,” in part because district schools there have large repair needs, Corosanite said. He envisions charters replacing the district schools and taking over the district’s enrollment in the neighborhood.”

But, String Theory already in debt to DeMedici Corporation II which is a legal component of the school. This and any other new school that it plans to build will add to that debt and will provide String Theory and the DeMedici Corporation with another piece of real estate from which to profit.

It is hard to avoid the conclusion that  the Joan Myers Brown Academy is an attempt pay off the debt String theory incurred with the purchase of the three campuses of  the Philadelphia Performing Arts String Theory School and add to its real estate portfolio and business plan.

It is not the mission of the Board to enrich the charter operator and all of the companies doing business with String Theory.  The Board’s stated mission is to protect the interests of the schoolchildren of the city. For that reason alone the Board must vote No on this application.