Investigation: Founder cashed in on Wellington’s Eagle Arts charter
Updated: 4:31 p.m. Thursday, July 9, 2015Posted: 4:31 p.m. Thursday, July 9, 2015
By Andrew Marra
Palm Beach Post Staff Writer
Eagle Arts Academy, one of Palm Beach County’s largest charter schools, opened last August with the goal of establishing a performing arts mecca for children on a sprawling campus in the heart of Wellington.
But while the publicly funded school ran up hundreds of thousands of dollars in debt and struggled to put in place its arts-infused curriculum, a Palm Beach Post investigation has found that it served a very different purpose: filling the bank accounts of its founder’s private businesses.
As the K-8 school opened last year, Eagle Arts Academy required its roughly 680 students to buy high-priced uniform shirts from a company set up by founder Gregory James Blount, a former model and events producer.
Though Blount’s company marketed itself to parents and the county school board as a “foundation” to support Eagle Arts, The Post found that the company is not a federally recognized nonprofit and that little of its revenue from uniform sales went to the school.
Blount’s company also offered after-school courses to students but charged them for the classes and kept the profits, Blount admitted. Though his business operated on school grounds for three months, records and interviews show it did so with no lease and paid no rent, an arrangement that a school district administrator called “unusual.”
While that company drew tens of thousands of dollars from Eagle Art’s students, another of Blount’s companies made more than $125,000 in taxpayer dollars from the school through a contract he obtained while serving as the school’s volunteer chairman.
Blount, 46, won the money by arranging for his company to receive a contract to create the school’s arts-infused curriculum, despite the fact that he had no education background and had never designed a curriculum.
Though Eagle Arts is a nonprofit school, Blount’s efforts to steer parents’ cash and public tax dollars toward his own businesses offer a glimpse into the ways that charters, which are operated with public money but little independent oversight, can become profit centers for their managers and founders.
Florida’s lax charter school regulations let people with little education experience open schools that draw millions of taxpayer dollars if enough students enroll. Too often, critics say, weak oversight sets the stage for financial self-dealing.
“Do we like it? No,” said Jim Pegg, who oversees the county’s charter schools for the Palm Beach County School District. “Is it legal? Yes.”
Blount’s money-making didn’t stop with those two companies. Records show he drew an additional $7,500 from the school through a third business, Sound Tree Entertainment, for consulting services. Sound Tree is also poised to earn thousands of dollars in interest from Eagle Arts after loaning it nearly $39,000 at a 7.5 percent compound interest rate, school records show.
I made mistakes
Eagle Arts’ charter with the school board prohibits its board members from profiting from the school, stating that “no member of the school’s governing board shall receive compensation, directly or indirectly, from the school’s operations.”
But Pegg said that Blount avoided any violation of the school’s charter by resigning as chairman in the weeks before the charter went into effect, then resuming his position after his business relationships with the school had ended.
In an interview, Blount told The Post that he “made mistakes” while getting the school started. But he said he broke no laws, and that everything he did was in the interest of opening the school quickly and transforming the educational experience of its students.
“It’s not like I was ever out there saying, ‘How does Greg make money off this every step of the way?’” he said.
Instead, Blount blamed his business arrangements on bad advice from the school’s management company and logistical problems that he said required him to offer up his own businesses as solutions.
“I worked 80-hour work weeks from March 2014 to August 2014 to open the school,” he said. He added that “we opened the school a year early.”
With the school’s first year completed, many parents defend Blount, saying that his financial dealings don’t detract from his leadership.
“Gregory is a revolutionist, and I have no worries in regards to the financial future of Eagle Arts,” said Amy Ackerman, who enrolled her daughter in second grade at the school last year. “I believe that they are paving the way to a much brighter education in Wellington and the surrounding areas.”
But even in Blount’s telling, the prospect of making money in Florida’s booming charter school industry was on his mind from the beginning. More than $1.5 billion a year in state money flows into Florida’s charter schools, which are spreading quickly across the state and now total more than 650.
Blount said he became interested in starting a charter school after emerging from personal bankruptcy in 2010 and operating a small business that gave acting and modeling classes.
His motives, he said, were two-fold: to create a new learning style that teaches traditional subjects through technology and arts, and to build a business selling it.
To open the school and run it, Blount enlisted Liz Knowles, a longtime educator and former administrator at the private Pine Crest School in Fort Lauderdale. It was Knowles who would have run the school and designed the curriculum, which Blount named “Artademics.”
But Knowles told The Post that she and Blount soon clashed. One of the final straws, she said, was when she learned he had started a company and named it after their curriculum, Artademics, without telling her.
When she confronted him about it, she recalled, he sought to put her at ease.
“He said, ‘Don’t worry, Liz. You’ll be rich,’” Knowles recalled. Blount denied making the comment.
But Knowles decided she couldn’t work with him and left shortly before the school year began, taking her draft of the school’s new curriculum with her.
By then, Blount’s company had obtained the contract to write what the school already was touting as its signature curriculum. With Knowles gone, he undertook the project himself.
Blount said that “I don’t claim to be an educator.” But he hired people with teaching backgrounds to help him, including, he said, a teacher on the school’s staff.
Starting in September, Blount’s company pulled in more than $127,000 from school coffers during a seven-month period, records show. The money was steered to the company through the school’s management company, iSchools, which contracted with Artademics at the board of directors’ request.
Yet months passed without the curriculum making an appearance at Eagle Arts.
After protests from parents and the departure of dozens of students, the school’s management company warned him in November that he would be in breach of his contract if he didn’t deliver the curriculum soon. He turned in the first installment weeks later.
A copy of the curriculum reviewed by The Post shows that it calls for students to read classic children’s books like Peter Pan and Alice in Wonderland and do reading- or math-based exercises afterward, such as counting balloons, inventing additional characters or creating paper cut-outs of Victorian homes.
Blount pointed out that he did not keep all of the money that Artademics earned.
“The money that went to Artademics LLC did not go directly to me,” he said. “It went to my company, which has consultants working to develop the curriculum.”
from uniforms, classes
While Blount pulled payments from the school through Artademics, his “foundation” sold the school’s roughly 680 students their mandatory uniform shirts and provided after-hours lessons — all at a markup.
Blount declined to provide specifics about his company’s uniform sales. But a sales receipt shows his company charged $24 for polo shirts, 50 percent more than some other area charter schools charge. Students at the Somerset Academy and the Renaissance Charter School chains, for instance, pay about $16 for similar shirts.
Blount defended his prices, saying that they included the cost of stitching on the school’s eagle logo, to which Blount said he owns the copyright.
“The cost and quality of the uniform tops are comparable to other schools and uniform stores,” he said.
Thais Gonzalez, a parent who has been critical of the school’s management, said the shirt prices seemed high when she ordered four last year for her two enrolled children. But she said she didn’t mind because she thought the money was going to a nonprofit foundation supporting Eagle Arts.
“I was happy to do it because it was supporting my children’s school,” she said.
But while Blount said his company, EMPPAC Foundation, bought some equipment for students to use at the school, he admitted that his company kept nearly all of the money, with most of it going to his fiancée’s salary.
Blount initially told The Post that EMPPAC donated only a few cameras to the school. But on Thursday, he said that it had also provided other services, including lighting equipment, the use of a phone and website design.
“The foundation incurred thousands of dollars in expenses on behalf of the school,” he said.
He also said Thursday that “there was a check from the EMPPAC foundation to the school.” But a spokeswoman for Eagle Arts, responding to a public records request, said previously in a statement that the school had no official record of any donations from the company.
Though Eagle Arts billed Blount’s company as a “foundation” to the county school board, IRS records show the company is not a federally recognized foundation or other nonprofit. While the company lists itself as a nonprofit on state corporate filings, Blount said the company pays federal taxes and effectively operates as a for-profit business under federal law.
He said his company intends to apply to the IRS for non-profit status.
Even so, records and interviews show Eagle Arts allowed EMPPAC to sell its after-school courses to students on campus for three months without signing a lease or paying the school for the use of its space. Blount said he requested a lease from the school but was never given one.
Pegg called the arrangement “unusual” but said that giving a company free access to its campus was the school’s prerogative.
‘At some point I’ve
got to make a living’
EMPPAC’s money-making activities at the school stopped in January, Blount said, and Artademics stopped drawing payments in April as the school separated from its private management company, which oversaw Artademics’ contract.
Blount resumed his position as chairman of the school’s board of directors in May, barring him or his companies from profiting from the school. Records show, though, that one of Blount’s companies, Sound Tree Entertainment, still stands to collect thousands of dollars in interest from its loan to the school.
Blount said that the payments to Sound Tree are intended to compensate him for costs he incurred in drawing up the school’s 130-page application to the school board.
“As for Sound Tree, the school would not be in existence if I did not spend the thousands of hours to write and then re-write the charter application,” he said.
He added that he “rented space in Delray Beach to work from at $2,600 a month and yet did not charge the school for the years of shared rent during the charter-writing process.”
Though he acknowledged missteps, Blount said he devoted countless hours to setting up Eagle Arts. The school opened a year earlier than initially planned, he said, causing a rush to get things arranged last summer.
“If I’d had this last year, I wouldn’t have made those mistakes,” he said.
He said he is still designing a curriculum for the school but will now donate his work.
Still, although board members serve as volunteers, Blount argued he was entitled to compensation for his work.
“What you’re missing is the thousand-plus hours I spent at this school,” he said. “At some point I’ve got to make a living.”
Maria Ironstone, the school’s parent liaison, said that the school has had “challenges” but that Blount has the support of parents.
“I have worked with many amazing people in my career, but never one as dedicated to the cause as Mr. Blount,” she said in an email. “Since he became chairman of the board we are back on track with our vision.”
The school district said that the school has run up hundreds of thousands of dollars in debts to its management company and a contractor, raising worries about its financial future and setting the stage for possible litigation.
But Eagle Arts plans to open this August with what Blount says he hopes will be an even larger enrollment.
“Did we make mistakes? Yes. What company doesn’t make mistakes?” Blount said. “We’re intent on fixing them and moving forward.”
Staff researcher Melanie Mena contributed to this story.