Exclusive: Inside the Cutthroat Preschool Wars

May 3, 2006 — -- The most sought-after spots in Manhattan or San Francisco are no longer multimillion-dollar Upper East Side apartments or houses by the Bay. They are places at some of the most elite private preschools in America.

This week, ABC News' "Nightline" features a two-part series on this ferocious competition, where parents compete with parents for a strictly limited number of places for their 2- and 3-year-old children.

"Nightline" followed three families from the beginning of the process to the moment when they received their letters of acceptance and rejection.

The pressure for places has never been greater -- particularly in New York where there has been something of a baby boom. The Census Bureau estimates that the number of children in Manhattan, under the age of 5, has risen by 30 percent since 2000.

And the number of preschool places hasn't kept up with demand. Amanda Uhry, founder of Manhattan Private School Advisors, estimates that there are now 15 applicants for every private preschool spot in the city.

"I describe it as a war zone," Uhry tells "Nightline" anchor Martin Bashir. "Because there is so much collateral damage. There are people who should be getting places ... that just don't get in."

"Nightline" was given exclusive access to the Ethical Culture Fieldston School, on the Upper West Side of Manhattan, as prospective parents embarked on a spring tour of the classrooms.

Ellen Bell, head of admissions, said New Yorkers can be tough if their child's application is rejected.

"The majority of families are very gracious. But upon occasion, one time, someone did say to me, 'Just wait till my attorney gets into touch with you, just wait,'" Bell said. "I had another parent say, 'Well, what kind of check do I have to write?' But that's so rare, that's incredibly rare."

An e-mail written by former Citigroup analyst Jack Grubman, which was released as part of a legal settlement, shed light on the competitive process of preschool applications.

In seeking to secure places for his children at the 92nd Street Y, Grubman wrote: "I used Sandy [Weill, former chief executive of Citigroup] to get my kids in 92nd St Y preschool, which is harder than Harvard."

Weill acknowledged writing a letter on behalf of Grubman's twins, and the children were admitted to the school around the time Citigroup pledged a $1 million donation.