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Parents and teachers crowded into a board meeting at Southwest Detroit Community School in October to voice concerns about their struggling school.

Parents and teachers crowded into a board meeting at Southwest Detroit Community School in October to voice concerns about their struggling school.

Koby Levin

Andre Agassi fund ‘evicts’ Detroit school after it fails to meet its lease agreement

A Detroit charter school is shutting down amid financial woes brought on by its lease agreement with an investment fund headed by tennis star Andre Agassi.

The closure of Southwest Detroit Community School, which was announced to teachers at an emergency meeting at the school on Tuesday afternoon, caps a six-year existence marred by academic struggles and, more recently, deep dissatisfaction among parents and the teaching staff over the school’s direction.

“I feel one part betrayed, but also, I think it was inevitable,” said Mitzy Tripp, who has two children at the K-8 school, including one who will soon graduate from eighth grade. “But I honestly didn’t think that they would do this to the families.”

When Michigan lawmakers lifted the cap on new charter schools in 2011, it sparked a spree of more than a dozen school openings within a few years. Several have since closed, including the Southwest Detroit Community School and Delta Preparatory Academy for Social Justice, which shut down abruptly at the beginning of this school year.

It’s the latest upheaval for a city where the school landscape has become severely fractured, forcing schools to compete for teachers, students, and resources without some of the safeguards that bring order to charter school systems in cities like New Orleans and Washington. Efforts to put such controls in place in Michigan have been stopped by well-funded political opposition.

School officials said they’d been “evicted,” according to two people with knowledge of an emergency meeting held Tuesday evening to apprise teachers of the situation. They requested anonymity because they weren’t authorized to speak for the school. It was not clear whether an actual eviction notice was served.

The closure means the families of 347 students, many of them Spanish-speaking, will have to find a new school for their children. School changes have been shown to hurt student learning and behavior at school.

The communications firm representing Turner-Agassi did not immediately reply to requests for comment.

In a written statement, the top official responsible for the school did not say why it is closing.

“Working with school leadership, we are ensuring that teaching and learning continues without interruption at the school every day until the end of the academic year,” said Rob Kimball, associate vice president for charter schools at Grand Valley State University. He also promised to help families find new schools for their children.

Through six tumultuous years, Grand Valley State University was the only constant at the school besides a dedicated handful of teachers and parents. As the school’s authorizer under Michigan law, it was responsible for overseeing the school’s finances and policies in exchange for collecting 3 percent of the school’s revenue.

The school’s usual business continued after the announcement Tuesday evening. Some teachers stayed after the emergency meeting to staff a mother-son Hawaiian luau dance that had been planned for that evening.

Though it opened in a neighborhood crowded with schools, Southwest Detroit Community School seemed poised for success. It had a brand new building, and its founders developed a deep rapport with parents in predominantly Latino southwest Detroit.

But the sheen eventually wore thin. The school was put on a state watchlist last year due to its poor academic performance. Teacher turnover was high. Lighthouse Academy, the management company that had contracted with Agassi’s Turner-Agassi investment fund to build the school, bailed out, leaving behind a shaky financial situation.

After going through five principals in five years, school leaders were mounting yet another effort to turn things around in the coming school year.

There were signs, however, that some parents and teachers had seen enough. They banded together last year to form a teachers union — a rarity in the charter sector — that they hoped would lead to some improvement. When that didn’t seem to help, teacher morale hit an extreme low, according to an internal survey. Some longtime parents began to search for new schools. At the same time, the school struggled  to meet the test score targets.

In the end, though, any hope for the school’s future collapsed under the weight of its lease with Turner-Agassi, an investment fund connected to the retired tennis legend that helped open the school as well as 89 others across the country.

The lease was designed like a residential rent-to-buy plan. The school would pay rent for the first few years, then, once it had enough students, it would buy the building outright. Turner-Agassi would make roughly $1 million on the deal, according to the lease agreement.

These arrangements aren’t unheard of in the charter sector. Michigan charter schools get no money from the state for facilities, often forcing them to rent buildings. Traditional schools generally own their buildings, taking advantage of public bonds that aren’t available to charter schools.

When the school failed to amass the more than $8 million it needed to buy the building, it paid a steep price. The rent went up sharply, increasing by 57 percent between 2017 and 2018, per the lease.

The school’s inability to keep up with its lease payments set off alarm bells within the Michigan Treasury Department, which flagged it as a “potential fiscal distress school” and required it to submit regular reports.

The rent, which grew to $769,910 annually this year, was higher than what other schools in the neighborhood pay. The payments suck up 19 percent of what the school brings in from the state to educate children.

“I don’t think it’s a fair market rate,” said Heather Gardner, president of EAS Schools, which manages the school, in an interview earlier this month. “Typically schools in Wayne County, pay on average 7 or 10 percent of their state aid amount” in rent.

Gardner had stopped paying the rent in full — she estimated earlier this month that the school was $500,000 in arrears. That’s nearly twice the size of the school’s fund balance, according to its filings with the state. Gardner and other school leaders had hoped that they’d be able to renegotiate the lease with Turner-Agassi.

Their hopes were apparently unfounded. In a letter to parents announcing the closure, dated May 22, the president of the school board said Southwest Detroit Community School “can no longer occupy its current facility as of the end of the school year.”