Some residents, parents and elected officials are raising serious concerns about the possibility of a charter school mortgaging a piece of Orange Unified School District property.
Through a freshly minted agreement with the Orange County Classical Academy on Thursday night, the academy is slated to take over a portion of the old Peralta Junior High School for up to 25 years and put in portable buildings for a high school.
Buried in that agreement is an option for the charter school to mortgage the land.
During Thursday’s board meeting, school board member Kris Erickson questioned the mortgage.
“Meaning if they can’t pay it or they want to borrow money against it, a new person comes in and that person has a right to be on that property for at least 10 years,” Erickson said. “That mortgage is a huge, huge issue for me.”
She said the academy is likely going to have to mortgage that district property in order to get cash – something she says the charter school is struggling with.
“They’re currently indebted to us for $1.5 million,” Erickson told her colleagues. “Next month they have a payment due of $700,000-plus. I don’t see how a cash strapped school can afford that.”
But her colleagues disregarded those concerns.
“It’s been sitting around for over 40 years and nothing’s been done,” school board member Rick Ledesma said, adding it’ll generate more money in a couple years than it has in the past four decades.
School board members voted 4-3 to approve the agreement, with board members Andrea Yamsaki, Ana Page and Erickson dissenting.
During Thursday’s public comment, Orange County Classical Academy Headmaster Semi Park said “our proposal would bring in close to $1 million for the district.”
Proponents say the agreement will allow the charter school to open up a high school and serve a broader range of students.
But critics say it’s a lopsided deal that doesn’t benefit a majority of Orange Unified students.
Is it Legal to Let a 3rd Party Mortgage Public Property?
Reggie Mundekis, an Orange resident and longtime good government watchdog, is questioning the legality of the move.
“It’s not clear to me that what the school district is doing, allowing a third party – a private entity – to mortgage school property is legal. That’s not one of their powers under the education code,” Mundekis said in a Thursday phone interview.
Mundekis, who closely monitors the OC Fair board and other governing agencies, said she’s never seen anything like Orange Unified’s deal with the academy.
“There’s nothing in the law that says the school district can allow a private person or an entity to take out a mortgage on their property. Then you have to ask why Orange County Classical Academy needs this mortgage – because charter schools can get loans from the state,” Mundekis said, pointing to state law governing school boards.
It comes in a school district where nearly 60% of students are on free or reduced lunch programs – a benchmark on poverty and low income.
Darshan Smaalden, a parent of an Orange Unified student who’s helping spearhead the recall against school board members Madison Miner and Ledesma , said she doesn’t see the community benefiting from the agreement.
“It does not benefit OUSD students and it does not benefit the OUSD community,” Smaaladen said in a Thursday interview, adding that the Orange County Classical Academy should’ve planned their expansion process better.
“They’ve known they didn’t have room for five years and all of a sudden it’s our problem because of poor planning,” she said.
Mundekis said she’s never seen anything like Thursday’s agreement.
“It smells real bad and I have not seen other charter schools doing this – taking out a mortgage on public property that they do not own. This is like you going and getting a mortgage on the apartment you’re renting.”
Campaign Finance Called Into Question
During board deliberations, Yamasaki publicly raised conflict of interest questions.
“The lead petitioner for OCCA is Mark Bucher – he’s a founder, he’s a board member,” Yamasaki said. “He owns Service First and he donated $15,000 to the no on recall campaign. He’s also on the board of the Lincoln Club.”
“How is there a conflict?” school board president John Ortega interrupted.
Bucher, who’s on the Orange County Classical Academy board of directors, donated $5,000 to school board member Angie Rumsey’s 2020 campaign and $5,000 to Ortega’s 2020 campaign, according to campaign finance disclosures.
The Lincoln Club of Orange County also spent nearly $13,000 on political mailers for Ledesma and Miner in their 2022 campaigns.
According to a 2021 social media post, Bucher was a Lincoln Club member – it’s unclear if he still is as the club doesn’t publicly post its membership.
And Service First, a contracting company, donated over $15,000 to the anti-recall committee. According to records from the state’s Contractor’s Licensing Board, Bucher owns stock in Service First.
Dr. Jeff Barke, who chairs the Orange County Classical Academy, also donated to Miner’s 2022 campaign.
According to a Voice of OC review of campaign finance filings, $64,000 tied to Barke, Bucher and political action committees connected to them has been spent to support the Orange Unified school board majority since 2020.
The contributions are also making some parents like Soren Williams also raise conflict of interest concerns about the deal.
“Is this majority going to give up a prime piece of real estate for 25 years for their political benefactors?” Orange Unified parent Soren Williams said at the meeting. “Money talks.”
Smaaladen said the school board majority is beholden to their campaign backers.
“This is absolutely pay to play politics,” she said in a Thursday phone interview.
During Thursday’s board deliberations, Ledesma criticized the recall campaign’s financing.
“The yes on recall is being funded heavily by the teacher’s union here,” he said.
A Voice of OC review of state campaign contribution forms for the recall campaign titled Citizens For the Recall of Ledesma, Miner and Rumsey shows $15,000 in contributions from the teacher’s union, the Orange Unified Education Association, out of a total fundraising tally of $116,000.
Thursday’s decision comes after parents pushed back against a proposal before the school board by the Orange County Classical Academy last year to lease portions of Esplanade Elementary.
[Read: What Will an OC Charter School Expansion Mean For Esplanade Elementary?]
During the pushback, parents raised concerns that Miner’s kids attended OC Classical Academy and questioned if she would recuse herself on votes regarding the charter school.
Yamsaki again raised those concerns on Thursday when she asked Miner to recuse herself.
Miner voted yes on the land agreement.
Reporter Hosam Elattar contributed to this article.
Spencer Custodio is the civic editor. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio.
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.