The tennis legend is launching a for-profit venture that hopes to leverage $750 million in assets to build 75 charter schools nationwide.
The latest investor in charter schools isn't a tech billionaire or a venture capitalist, it's tennis great Andre Agassi. He's teamed up with an investment banking group to create the Canyon‐Agassi Charter School Facilities Fund, a for-profit venture that hopes to leverage $750 million in assets to fund the construction of 75 charter schools nationwide over the next few years.
Agassi, who dropped out of school in ninth grade to pursue tennis, is no stranger to charters. He founded the Andre Agassi Charter Preparatory Academy in 2001 in his hometown of Las Vegas. Given his school's academic success, it's understandable that he wants to help charters expand.
Not everyone is sold on charter schools, though. As the 2009 Stanford CREDO study on charters revealed, half of existing charters are no better than traditional public schools. Of the remaining half of charters, only one third do better than their public peers and the rest are actually worse. Despite the data, there's such a strong desire to find a way to provide children in low-income urban areas with an excellent education, so the push to expand charters has continued unabated.
The growth of charter schools has also made facility space a bone of contention between charter operators and traditional public schools. Some states have passed laws mandating that regular schools share classroom space with charters. Still other charter operators have had to set up shop in church facilities or have rented office space. To solve the space problem, the fund will either construct buildings outright for charters or will help remodel existing spaces so that they're appropriate for students.
Once the schools move in to their new facilities, they'll pay market-rate rent to the fund until they can secure a tax-exempt loan from the municipal bond market and purchase the school outright from the fund. Where will the schools get the money to pay back the fund? Since charter schools are still public schools, the money allocated by the state per pupil follows the individual student—meaning that tax dollars set aside for education will end up in the bank accounts of fund investors like Citigroup and Intel.
Investment banker Bobby Turner, fund manager at Canyon Capital Realty Advisors, Agassi's partners, told the Los Angeles Times he expects "to attract investors who realize that making money and making societal change don't have to be mutually exclusive." True, we shouldn't expect businesses to not want to turn a profit, and given that there's a need for school space, it's smart business for these investors to step in to help. But the birth of this fund is sure to give credence to the belief that businesses are pushing for policies that disband traditional public schools and promoting charters precisely because they see them as money making opportunities.
The fund hopes their charter schools will ultimately educate almost 40,000 students. The first, a KIPP school, is set to open in Philadelphia this fall.
photo via The Tiebreakers