School's Out for Latest Foreclosure Victim

April 15, 2009—
North Lauderdale, Fla. -- The cobalt blue Rolls Royce had been carefully nosed into a parking space at a strip mall converted into an elementary school called the Charter School Institute.

A private lender had evicted the school from its Hallandale, Fla., campus Monday, changing the locks on the doors. Joseph Valbrun, the school's founder and proud owner of the Rolls he says he bought for a song from retired NBA player Alonzo Mourning, was $300,000 behind on the school's mortgage payments. So Tuesday, the school's depleted student body of 13 students -- down from 40 at its peak -- either didn't show up or were bused to its sister campus 18 miles away in North Lauderdale.

"There's no excuse to be behind on those payments ... the [Charter School Institute] board did not fulfill their responsibility," said Luwando Wright-Hines, director of charter school support for Broward County.

The town of Hallandale had also placed a $1.5 million lien on the school for dozens of unpaid fines that included fire and safety violations, dating to 2006. "They never paid any of them," Mayor Joy Cooper said of the school whose enrollment has waned.

Of the U.S. schools hit with such a foreclosure in the past decade, most have been charters, according to one education consultant.

In Hallandale, the town had been interested in the school's property and when it heard the school might land in foreclosure, it investigated. But the obstacles began mounting. The school couldn't validate ownership, and the buildings were crumbling. "The stack of documents outlining the violations is literally 12 inches high," Cooper said.

They include fines for exposed electrical outlets, a roof in chronic disrepair and the construction of various driveways, patios and rooms without permits.

"I was aghast because we tried everything possible to keep the school," she said. But [Valbrun] kept business as usual, never paying those fines."

The oddest thing, she noted, is that "not a single parent called us to complain that the school closed."

Valbrun declined to be interviewed, instead referring ABC News to Donna Thornton, an energetic principal at another charter school, working as an ombudsman of sorts, tasked with streamlining school expenditures.

School Blames State Budget

"I was in a meeting when I got a call saying that, as we're speaking, they're changing the locks on Hallandale, and Hallandale is being evicted," she said. "I thought it was a bad April Fools' joke."

Thornton blamed the eviction on Florida's ever-shrinking budget for charter schools, which rely on state and private financing. "But we've been hit so hard by the state cutbacks," she said. "It's impacted everything, including salaries, number of personnel that you can have, the programs we can offer at the schools and the mortgage as well."

Before this year's cutbacks, each charter school received about $5,000 per student, which Thornton said has been cut to $3,800, with another round of cutbacks expected.

Thornton insisted that Valbrun's idea for the school was a noble endeavor: to offer lower-income families a choice of schools. Most of the students are Haitian-Americans, Thornton said, and 96 percent of the student body receives free school lunches.

Despite the school's mission, its lender, called the Q Mortgage Corp., apparently viewed the school as a bad financial bet. It has reportedly allowed the school to rescue its supplies. Moving trucks ferried desks and chairs from the Hallandale school to the North Lauderdale campus, where community demand has been greater.

At the North Lauderdale school, with the Rolls glimmering in the sun across from the school's tinted windows, about 110 kids packed into the open floor-plan school. One administrator says it is based on the Montessori method, which stresses self-directed activity and clinical observation.

But decade-old Macintosh computers serve more as props than computing devices. There is no yard, no playground, no sandbox. But the teachers try to cheer the place up with hand-crafted banners.

"This is unbelievably traumatic," said William Bainbridge, an education expert and CEO of the Ohio-based SchoolMatch Institute, education consultants. "Those elementary school youngsters, they're used to an environment, they expect their environment and their teachers to be there. And suddenly they're chased out; it's not much different from becoming homeless."

Foreclosures Starting to Hit Schools

He estimated that foreclosure has struck about 50 U.S. schools in the past decade, most of them charter schools, although he could not say whether there has been a recent increase.