Charter Schools Review Board approves application for Union County charter school

Overturning a previous State Board of Education ruling, the new Charter Schools Review Board on Tuesday approved a charter application for American Leadership Academy Monroe (ALA Monroe) in Union County.

The 6-1 vote in favor of the application means the K-8 school will move to the ready-to-open phase to prepare for an August 2024 opening. Plans call for ALA-Monroe to open as a K-8 school with 450 students. By Year Four, enrollment is projected to increase to 1,100 students. School officials said there are 1,118 families representing 2,000 potential students on the school’s wait list.

Tuesday was the first chance the new review board has had to overturn a state board decision since new legislation stripped the state board of power to approve charters.

It will get a second chance Wednesday when it reconsiders Heritage Collegiate Leadership Academy’s charter application, which the state board also denied.

The state board twice denied ALA Monroe’s application after the former Charter School Advisory Board (CSAB) recommended approval. The Review Board replaced the CSAB.

In denying ALA Monroe’s application, the state board cited concerns about a potential conflict of interest between ALA Monroe’s board Chairman Mitchell Schwab and his former employer Charter One, which is the education management organization the Board of Directors hired to manage the school. State board members also questioned the academic performance of Charter One managed schools in North Carolina and the management contract between Charter One and the ALA Monroe board.

Schwab, an attorney who works with charter schools, told the review board that there is no conflict of interest. He offered to resign as ALA’s board chairman if the board sees it as a conflict that would prevent it from approving ALA Monroe’s charter.

“I know the term conflict of interest has come up,” Schwab said. “If there is a conflict of interest, I don’t know what it is because I receive no personal financial benefit to this. I am a volunteer on this board.”

As NC Newsline previously reported, the new rules governing charter approvals were established under House Bill 618. The law gives the review board many of the state board’s oversight responsibilities. It has the power to grant, amend, terminate and renew charter applications.

The CSAB had limited powers. It only made recommendations to the state board, and didn’t have the authority to approve, terminate, amend or renew charters. The new law allows charter applicants to request that the Review Board reconsider state board decisions made after July 1, 2022, in cases where they contradicted the advisory panel’s recommendations.

Despite near unanimous review board approval, ALA Monroe leaders did not have an easy go of it on Tuesday. Alex Quigley, a former CSAB chairman who was recently reappointed to the board, peppered Schwab and Charter One officials about the academic performances of five schools Charter One currently manages in North Carolina.

Only one of the five schools met academic growth, which Quigley said is a major concern. He put Charter One officials on notice, warning them that it will be difficult to win his approval for additional schools until existing schools, at a minimum, meet growth targets.

“It’s [meeting growth] highly doable,” Quigley said. “I’m not even talking about exceeding growth, I’m talking about [met] growth. Met is a low bar.”

Quigley was critical of school leaders and Charter One officials after they were unable to immediately explain a $124,000 budget line item.

“I think your budget should be perfect,” Quigley said. “You guys have like five schools, 10,000 kids. You guys are going to be the largest EMO [education management organization] in North Carolina. I’ll be honest, you guys should know the answer to these questions.”

Charter One officials later explained that the line item reflected a 15% management fee that was broken into two parts. One part reflects a 12% or $500,000 management fee the other a 3% fee for financial services — the $124,000.

Charter One is a for-profit charter management firm based in Mesa, Arizona. It’s founder Glenn Way has been heavily scrutinized for his business dealings. The Arizona Republic reported in 2021 that businesses owned or tied to Way made as much a $37 million in no-bid deals by using Way’s company to build charter schools, then leasing or selling the properties to schools he manages.

Schwab said Charter One is held to higher standards and has been “put on the grindstone a lot with most of the boards they come before.”

“Had this school itself not had an EMO contract, would any of these same questions be asked,” Schwab said.