A for-profit management firm is charging a publicly-funded Brooklyn charter school nearly $4 million above market rate for its current five-year lease, a state audit found.
The Michigan-based National Heritage Academies — whose questionable leasing practices were first exposed by The Post in April — has been using an affiliate to charge Brooklyn Excelsior Charter School a whopping $2.6 million in yearly rent for its Bushwick digs.
An audit by State Comptroller Thomas DiNapoli shows that the school’s board of trustees had independently appraised the site’s rental value at $1.8 million — but agreed to the higher rent anyway.
They were apparently swayed by an NHA lawyer’s argument that the company wouldn’t get an appropriate return on its investment — including $13 million in renovations to the building — at the lower rate, auditors found.
The building lacks an auditorium, gym and cafeteria, forcing kids to eat lunch in their classrooms.
DiNapoli also rapped the firm for refusing to fully divulge how it spent the $10 million in public funds it received annually to operate the charter school.
NHA claimed portions of its financial formula contained proprietary information.
“Any entity that runs on taxpayer dollars has to be open and accountable to its community and the taxpayers who foot the bill,” DiNapoli said in a statement. “Excelsior’s board needs to improve its financial diligence and NHA needs to be transparent about how public money is being spent.”
DiNapoli asked the board to negotiate a lower rental deal when the lease expires next summer.
In a response to the written audit, Brooklyn Excelsior board president Corey Martin disputed the findings that the rental deal was not in the best interest of the school.
He said the terms were reviewed by all the board members — including a real estate professional — as well as the board’s legal counsel and emphasized how much the firm’s initial financial investments helped the school.
“We believe the lease and the process that led to it protects the interests of the board, the school and its students,” wrote Martin. “We believe that the agreement and the rent are fair and reasonable.”
NHA, which operates two other schools in Brooklyn, is one of the few for-profit management firms operating in New York.
It was grandfathered in after state law was changed in 2010 to bar for-profits from running charter schools, which are publicly-funded.
The Post reported in April that at another site managed by NHA — the Brooklyn Dreams Charter School in Kensington — rent was jacked up by as much as 1,000 percent, according to sources.
The firm’s real estate affiliate has been renting the site from the Brooklyn Diocese for $264,000 per year, according to a source — then subleasing it to the school for $2.76 million.