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Some charter schools circumvent state law to buy buildings

More than one in nine of Minnesota's charter schools have used a loophole in state law to buy or build their own buildings using public money, without gaining the voter approval traditional school districts need before doing the same.

All three charter schools in the Bemidji area lease property to house their classrooms and offices with the help of state lease aid. But like other charter school officials in the state, the local charter school directors said they want to see more discussion on the funding of charter school facilities in the state Legislature.

More than 20 out of the state's 180 charter schools have used the aid, which is intended to help them lease space, to instead obtain a permanent site. The lease aid was approved in 1997 to help charters rent space, in order to compensate for the fact that they can't levy taxes or use bond measures to buy property.

State Rep. Mindy Greiling, DFL-Roseville, was one of the original sponsors of lease aid.

"Any time you give a group an inch, they can take a mile," Greiling told the Star Tribune, although she said she still supports lease aid.

But an expanding lease aid budget is creating concern for some public school officials, who are competing with charter schools for students even as the state's general education fund is struggling to keep pace with inflation.

A 2003 legislative audit recommended that lawmakers review lease aid, which charters can use to buy or build their own facilities by establishing nonprofit groups to make the purchase. Deborah Parker Junod, project manager of that audit, said the practice is "clearly circumventing the law."

Sen. Kathy Saltzman, DFL-Woodbury, said she plans to discuss the practice this session.

Some charter school officials said they welcome the discussion. Most say it would be easier to be able to directly own their own buildings; tying funding to an enrollment-based figure such as lease aid, they argue, eliminates the possibility of expansions that won't necessarily bring in more students.

"We'd love to build a gym in our school. What middle school kids don't have a gymnasium?" said Randi Shapiro, the executive director of World Learner School, a 180-student K-8 school in Chaska. But that wouldn't necessarily draw in more students, which means lease aid wouldn't rise to cover the cost.

"If you were in another school, you'd just hold a referendum," she said.

The flip side, according to some public school officials, is that charters are able to access additional tax dollars without voter approval -- and take students away from traditional schools.

State Education Commissioner Alice Seagren, who also helped craft the lease aid program as a legislator, said her department has studied the possibility of letting charters own their buildings outright. But she said that could get expensive very fast.

Local officials react

Schoolcraft Learning Community Director Scott Anderson said he would welcome discussion in the Legislature about the funding of charter school facilities.

Schoolcraft rents the majority of Concordia Language Villages' French Language Village near Bemidji. The charter school is currently in its third three-year lease with Concordia Language Villages.

On the one hand, Anderson said he can see how some people believe it's unfair for charter schools to buy or build their own buildings through nonprofits to better their schools at the expense of traditional schools. On the other hand, he said lease aid has been very important to charter schools because they can't own buildings, levy taxes and seek bonding to buy property.

Dan McKeon, director of TrekNorth Junior & Senior High School in Bemidji, said the word "loophole" seems more sinister than what is actually happening. He said it appears charter schools using this practice are taking a creative approach to meeting their facility needs.

TrekNorth, which is located in the Simonson Market, has a 10-year lease with Bemidji Management with the possibility of two five-year extensions.

McKeon said he would like to see the Legislature develop some flexibility for charter schools in addressing facility issues.

"I think we have more restrictions on how to solve a facility program than traditional districts do," he said.

Voyageurs Expeditionary High School, which is located in the Mayflower building in downtown Bemidji, has a five-year lease with building owner Kraus-Anderson.

Director Karen Baldwin said it's "somewhat cumbersome" that charter schools can't own buildings because it limits their prospects for locations.

"Most schools don't have to worry about that," she said.

Baldwin said it would be wise for the Legislature to consider allowing charter schools to own their own buildings. It makes sense financially, she said, noting that the money used now for rent payments could instead be applied to loan payments for a building that the charter school could own and use for years.

Perhaps, she said, the Legislature could consider allowing charter schools to qualify to own their own buildings by proving their stability -- especially financial stability -- throughout a period of time.

The Associated Press contributed to this story.