Industrial Development Authority Industrious Everywhere But Pima County

payback bribe

Hypocrisy runs deep in Pima County, so it should come as no surprise that the Democrat controlled Pima County Board of Supervisors, has approved through the Industrial Development Authority of Pima County funding for publicly funded corporate owned charter schools over the years. It should also come as no surprise that most of those schools are not built in Pima County for Pima County students.

It also does not come as a surprise that in each case an emergency was declared. According to the Goldwater Institute, cities and counties “sometimes propose measures declaring an emergency as a matter of routine. They may do so to prevent citizens from taking out a referendum on an unpopular or controversial action that they don’t want, reversed, like a tax increase, or they may do so to speed up the effective date for a project that the council should have considered and approved before, like an important contract that wasn’t negotiated on time. The only requirement is that super-majorities of members – typically three-fourths – vote in favor.”

In the eighth poorest metropolitan area in the nation, it is difficult to imagine that the residents would support economic development outside the area when so many small local businesses are struggling. In the most liberal community in Arizona, it is difficult to imagine that a majority of the voters would support the funding of corporate controlled charter schools anywhere.

For profit education – not in my backyard

Perhaps the biggest surprise is that the very woman who speared-headed the fight against Grand Canyon University, Cecilia Cruz Baldenegro, chairwoman of the El Rio Coalition II, is currently the president of the Pima County Industrial Development Authority.

In a piece for the Arizona Daily Star, Cruz Baldenegro wrote at the time that her group found selling City of Tucson property to a “for-profit entity” such as Grand Canyon to be “unprecedented and troubling.” At the time, Cruz’s crew said they had to fight battles in which government entities would “attempt to put in place a model of economic development that will emphasize private business interests over the interests of the community-at-large.”

In the same month that Cruz wrote her screed, the Pima County Industrial Development Authority approved a final resolution authorizing and approving the issuance of bonds not to exceed $15,000,000, to Parents with Partners, Inc., dba Desert Heights Charter School for charter school facilities located at 5821 West Beverly Lane in Glendale, Arizona. The Authority Board also approved “legal services to be rendered on behalf of the Authority by Russo, Russo & Slania, P.C.” A month later, the Authority Board approved bonds not to exceed $35,000,000, to be loaned to Edkey, Inc. for the purpose of financing or refinancing the acquisition, construction, improvement, renovation and equipping of charter school facilities located at the northeast corner of 77th Place and McKellips Road in Mesa, General Crook Trail in Camp Verde, Yavapai County, Arizona, 6622 North 91st Avenue, in Glendale, and real property located in Maricopa County.

The antics of the Tucson City Council in the Grand Canyon case were absurd, and the deal was beyond shady. Still, Grand Canyon has not yet done the damage to education as other corporations in the educational industrial complex.

While Cruz has served on the Authority’s board, the organization has gone so far as to fund the most anti-equity enterprise in public education to date; the Basis charter school monstrosity.  They are believed to cherry-pick the best and brightest schools, the Basis charter chain sets up shops mostly outside of urban centers. Few – if any – kids from lower socio-economic families ever see the inside of a Basis school.

Cruz, who claims to be an advocate for transparency, did not respond to the ADI’s inquiry.

Each and every transaction had to receive the approval from the Pima County Board of Supervisors. The supervisors approved each and every one to the tune of $421,000,000 from 2013-2015 alone (2013 $134.5 million, 2014 $100.5 million, 2015 $186 Million).

Even Ohio residents are annoyed

According to a 2010 article in the Arizona Daily Star, the Pima County Industrial Development Authority has “been helping build charter schools in Ohio, Nevada and Delaware,” as well as a “new police headquarters and jail in Las Vegas,” and “refinancing the debt of a private school in Charlotte, N.C.”

Montgomery County commissioners will decide Thursday whether to approve the issuance of $9.2 million in tax-exempt revenue bonds to expand a controversial charter school in Dayton. Deputy County Administrator Joe Tuss said the county would have no liability for the issuance of the bonds, but commission approval is required under the Internal Revenue Code.

The bonds would be issued by the Industrial Development Authority of the County of Pima, Ariz. Proceeds of the bonds would be loaned to New Plan Learning, Inc., an Ohio nonprofit corporation, to finance the expansion of Horizon Science Academy — Dayton High School at 250 Shoup Mill Road. – Dayton Daily News | Charter seeking $9.2M to expand

A very quick investigation of Concept Schools- on their own website, finds them rebutting a TV news story in Cleveland about the recruitment of Turkish teachers using H1B visas to teach at Horizon Schools. In a state where we are extra finicky about who teaches in unionized public schools- it’s odd that we are now so short of qualified Americans to teach at HS and below- that we have to go to Turkey.

But the true zinger is that our property values that are so low and their business model is so untested that banks won’t lend to them in Dayton. –  Bonds for Charter Schools that can’t write English

Although the Authority is tasked with economic development in Pima County, by law it can fund out-of-state projects if it shows an in-state benefit. It is hard to imagine that those who developed the Authority envisioned that its attorneys and the corporate charter industry would be the almost sole beneficiaries.

This year, the Pima County Board of Supervisors approved placing a second mortgage on County buildings in order to fund a near-space balloon company associated with astronaut and husband of former Congresswoman Gabby Giffords. According to sources, because the venture is considered very risky, principals could not have sought funding from the Authority.

Who does win?

From 2008 to 2010, the Authority, which according to the Star article was supposedly “tasked with financing local projects”, enabled “$556 million in tax-exempt bond issues for seven out-of-state projects.”

“The Pima County IDA is the only one of the state’s big four – the others being from Maricopa County, Phoenix and Tucson – to finance projects that are strictly out of state,” wrote Tim Steller in 2010.

The Authority’s attorney Steven Russo told Steller, and the ADI has confirmed that the bonding scheme doesn’t really put the County at risk as it assumes no liabilities and it really doesn’t cost anything because the borrowers pay the administrative costs – which include the Russo crew.

The IDA does not act as a lender but as a “conduit,” allowing a lender to issue tax-free bonds on behalf of the borrower, Russo said. The conduit role earns the IDA fees and brings money to its partner in many projects, the Community Investment Corp. – Arizona Daily Star

A miniscule amount of money goes to the Community Investment Corp., founded in 1996 as a non-profit 501(c)3 to offer and enhance community development services, with the help of Russo’s crew. Currently, Stanley Lehman, secretary of the Authority is the president of the Community Investment Corp. The Authority’s vice president, John H. Payne, and assistant secretary, Frank Y. Valenzuela, serve as officers for the Community Investment Corp.

The Community Investment Corp. acts as the administrator of the IDA’s charter-school financing projects. For its services the corporation charges a set-up-fee of $1,000 and an annual fee of $8,000 or $12,000, depending on the size of the bond issue. That money can help the corporation’s charter-school-finance program and other activities, such as investments in local start-ups, said executive director Frank Valenzuela, also a director of the IDA. – Arizona Daily Star

07856156 COMMUNITY INVESTMENT CORPORATION
Name TITLE Date of Taking Office Late Updated
MICHAEL A SLANIA AGENT  09/23/1996
DIANE G QUIHUIS OFFICER 12/06/2012 06/19/2015
JOHN PAYNE OFFICER 01/30/2007 06/19/2015
FRANK VALENZUELA OFFICER 10/31/2006 06/19/2015
STANLEY LEHMAN PRESIDENT 10/02/1996 06/19/2015

In fairness, the Authority also approved bonds for the Tucson Medical Center in an amount not to exceed $31,000,000 to be loaned to Tucson Medical Center to finance and refinance the acquisition, construction, improvement and equipping of certain health care facilities referred to as the campus of Tucson Medical Center located in Tucson, and health care facilities located within the La Posada property generally located at 501 South La Posada Circle in Green Valley. The Board also approved bonds for the Beacon Group Project at 308 W. Glenn Street, 2700 N. Stone Avenue, 2824 N. Oracle Road, 2870 N. Oracle Road and 331 W. Laguna Street,  in an aggregate principal amount not-to-exceed $6,700,000.00.

Of the few education entities the Pima County Industrial Development Authority has funded in the County are the Leman Academy of Excellence and the Arizona Community Development Corporation (La Paloma Academy Schools Project). La Paloma has developed schools accessible to low income students in Pima County, while the Leman School, by the creator’s own admission, targets primarily a less-stressed population.

According to Arizona Corporation Commission records, that organization was formed in July 2014 by pop-psychologist Dr. Kevin Leman, radio show host Joe Higgins, and Dennis O’Reilly. Seven months later, the Authority approved up to$20,000,000.00 in education facility revenue bonds to the organization. As of August 2015, Leman continues to serve as the president, O’Reilly serves as the vice-president, and Michael Farley, former associate of Pima County’s most notorious real estate developer, Jim Matison, serves as the secretary.

How do the Pima County supervisors justify it?

In 2010, Steller wrote that when questioned about the Authority’s practices, “three county supervisors interviewed for this story had only guarded critiques.” “My initial question is, why are we investing out of state? Why aren’t we investing locally?” District 3 Supervisor Sharon Bronson reportedly told Steller.

District 4 Supervisor Ray Carroll told Steller, “It’s hard to believe that you can’t find projects to invest in this community.”

In 2015, when trying to push a massive bond measure, Carroll called bonds the life-blood of the community. It would appear that he and supervisors Bronson, Valadez, and Elias agree with him, and choose to pump that blood into the corporate charter school community.

Pima County Industrial Development Authority 2013 – 2015

December 15, 2015
Premier Charter High School RESOLUTION NO. 2015 – 93, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $8,000,000.00 Education Facility Revenue Refunding Bonds (Premier Charter High School Project, 7544 W. Indian School Road, Phoenix, AZ), Series 2015 and declaring an emergency.
Attachments: IDA_PremierCharterHighSchoolProject
not to exceed $8,000,000.00
November 17, 2015
Caurus Academy Project RESOLUTION NO. 2015 – 84, of the Board of Supervisors, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not-to-exceed $5,500,000.00 Education Facility Revenue Bonds (Caurus Academy Project, 41900 N. 42nd Ave., Anthem, AZ), Series 2015 and declaring an emergency.
Attachments: IDA_ResoCaurusAcademyProject
not-to-exceed $5,500,000.00
Leading Edge Academy Maricopa Charter School Project RESOLUTION NO. 2015 – 85, of the Board of Supervisors, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not-to-exceed $6,000,000.00 Education Facility Revenue Bonds (Leading Edge Academy Maricopa Charter School Project, 18700 N. Porter Rd., Maricopa, AZ), Series 2015 and declaring an emergency.
Attachments: IDA_ResoLeadingEdgeAcademyMaricopaCharterSchoolProject
not-to-exceed $6,000,000.00
Odyssey Preparatory Academy Project RESOLUTION NO. 2015 – 86, of the Board of Supervisors, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not-to-exceed $55,000,000.00 Education Facility Revenue Bonds (Odyssey Preparatory Academy Project, 495 S. Airport Rd. and near the intersection of McDowell Rd. and Verrado Way, Buckeye, AZ), Series 2015 and declaring an emergency.
Attachments: IDA_ResoOdysseyPreparatoryAcademyProject
not-to-exceed $55,000,000.00
Tuesday, July 7, 2015
The Paideia Academies Project RESOLUTION NO. 2015 – 47, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $13,500,000.00 Education Facility Revenue Bonds (The Paideia Academies Project, 7777 S. 15th Terrace, 1535 E. Baseline Road and 1541 E. Baseline Road, all in Phoenix, AZ), Series 2015 and declaring an emergency.
Attachments: IDA_ResoThePaideiaAcademiesProject
not to exceed $13,500,000.00
American Leadership Academy Project RESOLUTION NO. 2015 – 48, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $35,000,000.00 Education Facility Revenue Bonds (American Leadership Academy Project, 34696 N. Village Lane, San Tan Valley, AZ; 4507 S. Mountain Road, Mesa, AZ; and 4308 N. Hunt Highway, Florence, AZ), Series 2015 and declaring an emergency.
Attachments: IDA_ResoAmericanLeadershipAcademyProject June 16, 2015
not to exceed $35,000,000.00
March 10, 2015
Noah Webster Schools-Mesa Project RESOLUTION NO. 2015 – 14, of the Board of Supervisors of Pima County, Arizona, approving the proceeding of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $13,000,000.00 Education Refunding Bonds (Noah Webster Schools-Mesa Project, 7301 East Baseline Road, Mesa, AZ), series 2015 and declaring an emergency.
Attachments: IDA_ResoNoahWebsterSchools-Mesa Project
not to exceed $13,000,000.00
February 17, 2015
Leman Academy of Excellence Project RESOLUTION NO. 2015 – 7, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $20,000,000.00 education facility revenue bonds (Leman Academy of Excellence Project, 7548 North Silverbell Road and 7750, 7770, 7780 and 7790 North Schisler Drive, Marana, AZ), Series 2015 and declaring an emergency.
Attachments: IDA_Resolution-LemanAcademyofExcellence
not to exceed $20,000,000.00
January 6, 2015
North Star Charter School Project RESOLUTION NO. 2015 – 1, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $5,000,000.00 education facility revenue bonds (North Star Charter School Project, 99th Avenue/ Indian School Road, Phoenix, AZ), Series 2015 and declaring an emergency.
Attachments: IDA_ResoNorthStarCharterSchoolProject
not to exceed $5,000,000.00
October 14, 2014
Hillcrest Academy Project RESOLUTION NO. 2014 – 104, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its education facility revenue bonds (Hillcrest Academy Project), Series 2014 in an aggregate principal amount not to exceed $12,000,000.00 and declaring an emergency.
Attachments: IDA_HillcrestAcademyProject
not to exceed $12,000,000.00
PLC Arts Academy at Scottsdale Project Amending Resolution No. 2013-115 RESOLUTION NO. 2014 – 105, of the Board of Supervisors of Pima County, Arizona, amending the approval of the issuance of the Industrial Development Authority of the County of Pima education facility revenue bonds (PLC Arts Academy at Scottsdale Project), Series 2014 and declaring an emergency.
Attachments: IDA_PLCArtsAcademyatScottsdaleProject
June 17, 2014
Hillcrest Academy Project RESOLUTION NO. 2014 – 58, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its education facility revenue bonds (Hillcrest Academy Project), Series 2014 in an aggregate principal amount not to exceed $35,000,000.00 and declaring an emergency.
Attachments: IDA_ResoHillcrestAcademyProject
not to exceed $35,000,000.00
May 20, 2014
Arizona Community Development Corp – La Paloma Academy Schools Project RESOLUTION NO. 2014 – 54, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $20,000,000.00 Education Revenue Bonds (Arizona Community Development Corporation – La Paloma Academy Schools Project), Series 2014 and declaring an emergency.
Attachments: IDA_LaPalomaAcademySchoolsProject
not to exceed $20,000,000.00
Odyssey Preparatory Academy Goodyear Project RESOLUTION NO. 2014 – 55, of the Board of Supervisors of Pima County, Arizona, amending the approval of the issuance of the Industrial Development Authority of the County of Pima Education Facility Revenue Bonds (Odyssey Preparatory Academy Goodyear Project) from $12,000,000.00 to $15,000,000.00, Series 2014 and declaring an emergency.
Attachments: IDA_OdysseyPreparatoryAcademyGoodyearProject
from $12,000,000.00 to $15,000,000.00
April 15, 2014
JMF-Hope College and Career Readiness Institute RESOLUTION NO. 2014 – 43, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its Education Facility Revenue Bonds (JMF-Hope College and Career Readiness Institute Charter School Project), Series 2014 in an aggregate principal amount not to exceed $11,000,000.00 and declaring an emergency.
Attachments: IDA_ResoEducationFacilityRevenueBonds
not to exceed $11,000,000.00
February 4, 2014
Ball Val Vista Project RESOLUTION NO. 2014 – 9, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $7,500,000.00 education revenue bonds (Ball Val Vista Project), Series 2014 and declaring an emergency.
Attachments: IDA_Resolution_BallValVistaProject
not to exceed $7,500,000.00
December 17, 2013
Noah Webster Schools – Pima Project RESOLUTION NO. 2013 – 114, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $12,000,000.00 education revenue bonds (Noah Webster Schools-Pima Project), Series 2014 and declaring an emergency.
Attachments: IDA_ResoNoahWebsterSchools-PimaProject
not to exceed $12,000,000.00
PLC Arts Academy at Scottsdale Project RESOLUTION NO. 2013 – 115, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $6,000,000.00 education facility revenue bonds (PLC Arts Academy at Scottsdale Project), Series 2014 and declaring an emergency.
Attachments: IDA_ResoPLCArtsAcademyatScottsdaleProject
not to exceed $6,000,000.00
November 12, 2013
San Tan Montessori School Project RESOLUTION NO. 2013 – 106, of the Board of Supervisors of Pima County, amending the approval of the issuance of the Industrial Development Authority of the County of Pima Education Facility Revenue Bonds (San Tan Montessori School Project), Series 2013 and declaring an emergency.
Attachments: IDA_ResolutionSanTranMontessoriSchoolProject
October 8, 2013
San Tan Montessori School Project RESOLUTION NO. 2013 – 87, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not-to-exceed $14,000,000.00 education facility revenue bonds (San Tan Montessori School Project), Series 2013 and declaring an emergency.
Attachments: IDA_Resolution_SanTanMontessoriSchoolProject
not-to-exceed $14,000,000.00
Odyssey Preparatory Academy Goodyear Project RESOLUTION NO. 2013 – 88, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not-to-exceed $12,000,000.00 education facility revenue bonds (Odyssey Preparatory Academy Goodyear Project), Series 2013 and declaring an emergency.
Attachments: IDA_Resolution_OdysseyPrepartoryAcademyGoodyearProject
not-to-exceed $12,000,000.00
September 3, 2013
Leading Edge Academy Maricopa Charter School Project RESOLUTION NO. 2013 – 78, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not-to-exceed $5,000,000.00 Education Facility Revenue Bonds (Leading Edge Academy Maricopa Charter School Project), Series 2013 and declaring an emergency.
IDA_Resolution_LeadingEdgeAcademyMaricopaCharterSchoolProject
IDA_UpdatedResolution_LeadingEdgeAcademyMaricopaCharterSchoolProject
not-to-exceed $5,000,000.00
LEAD Charter Schools Project RESOLUTION NO. 2013 – 79, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not-to-exceed $11,000,000.00 Education Facility Revenue Bonds (LEAD Charter Schools Project), Series 2013 and declaring an emergency.
IDA_Resolution_LEADCharterSchoolsProject
IDA_UdatedResolution_LEADCharterSchoolsProject
not-to-exceed $11,000,000.00
Edkey Charter Schools Project RESOLUTION NO. 2013 – 80, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its Education Facility Revenue Bonds (Edkey Charter Schools Project), Series 2013A, in one or more series in an aggregate principal amount not to exceed $35,000,000.00 and declaring an emergency.
IDA_Resolution_EdkeyCharterSchoolsProject
IDA_UpdatedResolution_EdkeyCharterSchoolsProject
not to exceed $35,000,000.00
August 6, 2013
Desert Heights Charter School Project RESOLUTION NO. 2013 – 63, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not-to-exceed $15,000,000.00 education facility revenue and refunding bonds (Desert Heights Charter School Project), Series 2013 and declaring an emergency.
Attachments: IDA_ResoDesertHeightsCharterSchoolProject
not-to-exceed $15,000,000.00
July 2, 2013
Starshine Academy Project RESOLUTION NO. 2013 – 49, of the Board of Supervisors of Pima County, Arizona, amending the approval of the issuance of the Industrial Development Authority of the County of Pima Education Facility Revenue Bonds (Starshine Academy Project), Series 2013 and declaring an emergency.
Attachments: IDA_ResoStarshineAcademyProject
April 16, 2013
BASIS Schools, Inc. Project RESOLUTION NO. 2013 – 26, of the Board of Supervisors of Pima County, Arizona, approving the proceedings of the Industrial Development Authority of the County of Pima regarding the issuance of its not to exceed $11,500,000.00 Education Revenue Bonds (BASIS Schools, Inc. Project) Series 2013 and declaring an emergency.
Attachments: IDA_ResoBASIS
not to exceed $11,500,000.00
Starshine Academy Project RESOLUTION NO. 2013 – 28, of the Board of Supervisors of Pima County, Arizona, approving the proceeding of the Industrial Development Authority of the County of Pima regarding the issuance of its Education Facility Revenue Bonds (Starshine Academy Project), Series 2013 in an aggregate principal amount not to exceed $13,000,000.00 and declaring an emergency.
Attachments: IDA_ResoStarShineAcademyProject
not to exceed $13,000,000.00

The Authority’s nine page application for funding includes section:

  1. Fees and Expenses. The Authority’s fees are as follows:
  2. A) Application Fee. The complete fee for filing an Application is $3,000, which is nonrefundable. One Thousand Dollars ($1,000) is to be paid at the time the Application is filed and the balance within 10 days of the Authority’s grant of preliminary approval to the issuance of the proposed bonds. If the preliminary approval is denied, no further fees beyond the initial $1,000 are required unless the application is resubmitted, and preliminary approval is subsequently given.
  3. B) Authority’s and Authority’s Counsel Fees. By submitting an Application, the Applicant also agrees to pay all costs and expenses incurred by the Authority or its Board related to the issuance of the bonds.
  4. C) Annual Assessment of Authority’s Administrative Expense. Additionally, as a condition to the issuance of the bonds, the Applicant must agree to pay a proportionate part of the Authority’s administrative expenses during the period the bonds are outstanding.