Sunday, March 12, 2017

Who Rules Brookline's Beaver Country Day School?

According to a pamphlet posted on the Town of Brookline Assessor’s website, private schools in Massachusetts “MAY QUALIFY for an exemption from local taxes on real and personal property they own,” but “ownership DOES NOT AUTOMATICALLY ENTITLE AN ORGANIZATION TO AN EXEMPTION, HOWEVER.” The same pamphlet also notes that “exemption from taxation is A PRIVILEGE and the organization must prove clearly and unequivocally that it qualifies.”

In the 21st-century, the “privilege” of exemption from taxation is granted to Brookline’s “non-profit” private schools like Dexter Southfield, the Park School and the Beaver Country Day School (which is located in Brookline’s Chestnut Hill neighborhood).

According to data from an Exempt Property Record Card that’s posted on the Brookline Assessor’s website, the valuation of Beaver Country Day School Inc.’s property at 791 Hammond Street, for example, increased from $24,511,800 in 2007 to $36,076,900 in 2016. Yet its Fiscal Year 2017 Real Estate tax bill is zero dollars, while the total tax bill for the owner of 764 Hammond Street (with a valuation of $1,474,200 in 2016) is $13,316 in 2017. In addition, although the valuation of the currently vacant parcel of property the private school also owns at 791 Woodland Road increased from $1,250,500 to $1,567,000 between 2007 and 2016, Beaver Country will also pay zero dollars in taxes to the Town of Brookline on this piece of real estate in 2017.

Elsewhere on Woodland Road, the tax bill for the owner of 320 Woodland Road (with a valuation of $1,782,000 in 2016) is $15,337 in 2017. Yet in 2017, Beaver Country will pay zero dollars in property taxes to Brookline on the house and real estate it owns at 333 Woodland Road (although the valuation of this property increased from $1,144,400 to $2,064,800 between 2007 and 2016).

But if Beaver Country were taxed at the same rate as most Brookline property owners who do not benefit from the same tax exemption privilege are taxed, Brookline would be requiring this private school to pay around $389,000 in taxes on its real estate. In addition, if Dexter Southfield were not benefiting from a tax exemption privilege, it would be billed for around $767,000 in taxes; and the tax payment of Park School would be around $487,000, if it were not also exempt from taxes.

Around $1,643,000 in additional tax revenue to use for things like helping to fund Brookline’s public school system could, thus, be obtained from these three “non-profit” Brookline private schools alone, if their tax exemption privileges were taken away by the Commonwealth of Massachusetts and the Town of Brookline.

The Beaver Country Day School Inc.’s private school first opened in 1921 as a school for 65 students at Boylston Street and Buckminster Road, on the leased Jonathan White estate. But on Sept. 28, 1921 it also purchased for $13,640 the 17-acre wooded campus site at the corner of Hammond Street and Woodland Road in Brookline’s Chestnut Hill section that its school currently occupies.

Around $1 million was then spent to construct buildings for the school (which was then a 4th to 8th grade school for female and male pupils and a 9th to 12th grade secondary school for only female students) on its newly acquired Brookline property; and by 1930 the construction project on Beaver Country’s campus was completed. The additional parcel of vacant land at 791 Woodland Road, whose value is now assessed to be $1,567,000, was then purchased on Dec. 29, 1932 for $100.

By 1945, the number of students enrolled at Beaver Country had increased to 300 students; and on June 2, 1961 the house that the private school currently owns at 333 Woodland Road, whose value is now assessed to be $2,064,800, was purchased by Beaver Country Day School Inc. for $100.

After 1970, Beaver Country began admitting male students into its 9th to 12th grade secondary school that previously only admitted female students. And today, the school is a co-educational private day school that enrolls around 470 students from 6th grade to 12th grade: 30 students in 6th grade; 50 students in 7th grade; 50 students in 8th grade, 85 students in 9th grade; 85 students in 10th grade; 85 students in 11th grade; and 85 students in 12th grade.

The parents of most students enrolled at Beaver Country were required to pay $45,500 in tuition to the private school for the 2016-2017 academic year; and between July 1, 2014 and June 30, 2015, Beaver Country Day School Inc.’s total revenues of $28,149,811 exceeded its total expenses of $24,728,469 by $3,431,342, according to its Form 990 financial filing for 2014. In addition, the net assets of Beaver Country increased by $2,768,587—from $22,813,093 to $25,571,680—during the same period.

Nearly $13 million of the over $28 million that Beaver Country collected in revenues between July 2014 and June 2015 was spent on salaries for its 413 employees, according to its financial filing. The private school’s “Head of School,” Peter Hutton, for example, was paid an annual “reportable compensation” of $405,527 and “other compensation” of $102,047 (which apparently included the annual monetary value of being provided with the Beaver Country-owned house at 333 Woodland Road in which he lived), according to the same financial filing. In addition, between July 1, 2014 and June 30, 2015, Beaver Country paid $2,166,465 to RAD Sports of Rockland, Massachusetts for “Turf.”

Although the value of Beaver Country’s endowment fund only increased from $11,647,966 to $11,674,659 between July 2014 and June 2015, the school earned an investment income of $1,160,639, including the $736,000 that it gained from the sale of $5,809,352 worth of securities. As of June 30, 2015, over $3 million of Beaver Country’s endowment was still invested in an off-shore Cayman Islands-Based Hedge Fund Investment; but, as its financial filing noted, “private foreign investment co. rules do not apply to tax exempt organizations,” and zero in federal income taxes were paid between 2014 and 2015.

Over $8 million of endowment funds were also invested in Equity mutual funds and fixed income funds. Yet on Feb. 1, 2013 the Massachusetts Development Finance Agency still issued $15,282,914 in tax exempt bonds to help “refinance” Beaver Country’s private school debt.

Part of this debt may have been generated from cost of building a visual and performing arts facility on its Brookline campus in early 21st-century. Beaver Country’s administration apparently used cheaper non-unionized workers to build this visual and performing arts facility, rather than unionized workers. As Lawrence Fahey noted in a July 17, 2003 Brookline Tab article, then-New England Council of Carpenters administrator Mark Erlich “said his organization” had “been in contact with Beaver Country Day School’s administrators since winter 2002, when bids for the project were being accepted;” but though it “urged the school to use a union company, Beaver selected the only non-union bid submitted.”

Although Beaver Country pays zero in property taxes, according to an Apr. 9, 1998 Tab article by Jeremy Pawloski, in the late 1990’s, “Beaver Country Day School’s two soccer fields” were “used by the town in the fall and spring, and its baseball diamond is used from April to June.” Yet in 2017 a community benefit like establishing a free tuition and/or open admissions policy for all 6th to 12th graders whose parents are Brookline residents, , for example, has still not been provided by the school’s board of trustees.

The Beaver Country Day School Inc.’s board of trustees which “plays a central role in overseeing the school’s operations and in planning Beaver’s future,” according to the school’s website, has apparently not been an “eager beaver” about using its annual revenue surplus to help fund Brookline’s public school system. Nor has the school’s board apparently been an “eager beaver” to pay property taxes at the same rate as the neighboring homeowners who also own real estate on Hammond Street.

One reason might be that, instead of including members of Brookline’s democratically-elected School Committee on its board of trustees, Beaver Country’s board includes some well-heeled folks associated with external organizations whose priorities do not include helping to fund public grade or secondary schools in the Commonwealth of Massachusetts or providing community benefits to Brookline.

Boston-based Archipelago Ventures Ltd. private investment/speculation firm founder, Tomes Bergstrand, for example, is president of Beaver Country’s board of trustees. Another member of Beaver Country’s board of trustees, Charles Argyle, is Global Equities Portfolio Manager at Wellington Management stock investment/speculation firm (that speculates with and manages $929 billion in assets of its 2,150 clients from 13 offices around the globe, including its Boston headquarters office at 280 Congress Street, according to the Wellington Management website).

Westfield Capital Management CEO, President and Chief Investment Officer William Muggia is also a Beaver Country trustee. His speculation/investment firm “provides investment management service to institutional and high net-worth investors” like Clark University; and it speculates with/manages over $12 billion in assets from its office at One Financial Center in Boston, according to Westfield Capital Management’s website. Another Beaver Country trustee, Steven Kaitz is a Co-CEO of New England’s largest independent supplier of building materials, the National Lumber Company, which does business in the Town of Newton on Needham Street.

Besides sitting on the private school’s board of trustees, Beaver Country Trustee Paula Price (a former Chief Financial Officer at Stop & Shop’s Ahold USA parent company) has also been sitting on the corporate boards of Dollar General Corporation, Financial Guaranty Insurance Company, Western Digital Corporation, Accenture PLC and Blue Cross Blue Shield of Massachusetts, as well as on the Museum of Fine Arts board, in recent years.

Brigham and Women’s Hospital and Harvard Pilgrim Health Care Foundation board member Josh Kraft, coincidentally, sits next to Blue Cross Blue Shield of Massachusetts board member Price on Beaver Country’s board. Like his brother, Massachusetts General Hospital Trustee and Kraft Group President Jonathan Kraft (who’s also a trustee of Brookline’s Dexter Southfield private school), Beaver Country Trustee Josh Kraft is the son of Robert Kraft: the billionaire owner of the New England Patriots who also owns a stake in the Ultimate Fighting Championship [UFC] mixed martial arts promotion company—and whose personal wealth was estimated to be $5.2 billion in 2016 by Forbes magazine.

Within his family’s Kraft Group business, Josh Kraft holds position of president of New England Patriots Charitable Foundation—which collected $3,695,431 in contributions (including 116 separate contributions from individuals, corporations or family foundations that exceeded $5,000), earned $326,035 more in revenues than it spent, paid only $1,147 in state and federal taxes and made only one grant of $1,000 to a Brookline-based organization in 2015, according to its Form 990 financial filing for 2015.

Another Beaver Country trustee, David Fubrini, also is a trustee of both University of Massachusetts and MITRE research/development organization, which received $281 million in Pentagon contracts in 2014; making MITRE the 6th-largest recipient of Pentagon contracts in Massachusetts in that year. Coincidentally, Retired U.S. Navy Admiral Edmund Giambastiani Jr., Retired U.S. Air Force General C. Robert Kehler and Retired General Montgomery Meigs also sit on MITRE’s board of trustees; and also, coincidentally, Beaver Country Trustee Fubrini is past chair of the board of trustees of Brookline’s Park School private grade school.

Working-class and middle-class residents of Brookline may not be able to create enough political pressure in Massachusetts to require “non-profit” tax-exempt private schools like Dexter Southfield, Park School and Beaver Country to pay a fair share of local property taxes in 2017. But perhaps more needed funding for Brookline’s public school system could be obtained in 2017 if Massachusetts began taxing more heavily the external organizations in which trustees or directors of Brookline’s private school system currently hold executive or board member positions?

Monday, March 6, 2017

Who Rules Brookline's Park Corporation Day School?

At a March 19, 1998 meeting of the Brookline School Committee, Brookline’s Dexter Southfield private school—which was then called Dexter School—received approval for its proposal to expand its ninth-grade program at that time. A 1982 state law had required that local school committees in Massachusetts vote to approve the kind of program expansion that this private school was proposing.

But at this same March 19, 1998 meeting, then-Brookline School Committee member Helen Charlupski said, according to an April 2, 1998 Brookline Tab article by Jeremy Pawloski, that the Newton Street private school officials “have wonderful facilities, but they don’t share them with the town” and “there’s a frustration with non-profits who do not see any responsibility to towns in which they live.” The then-School Committee chairperson, Terry Kwan, also observed that “this institution has been very recalcitrant about payment in lieu of taxes to the town of Brookline.”

The same 1998 article noted that in 1997 then-Brookline Selectwoman Donna Kalikow and other town officials had met with Dexter private school officials “in a fruitless effort to secure community benefits for the town;” and that “an example of Dexter’s lack of community involvement” was “the school’s failure to allow the town to use its” then-new “indoor ice-skating rink at reduced prices.”

Yet Dexter Southfield may not be the only tax-exempt private school in Brookline that has not, historically, provided either enough “payment in lieu of taxes to the Town of Brookline” (to, for example, help fund Brookline’s underfunded public school system) or enough “community benefits for the town.”

According to the Town of Brookline 1969 Tax Lists, a daughter of Lammot Du Pont, Mary Du Pont Faulkner, apparently was assessed $15,043 in taxes on the property she still owned in the 1960’s at 235 and 255 Goddard Avenue. But in 2016 the “non-profit” Park School Corporation paid zero dollars in taxes on its private grade school campus property at 171 Goddard Avenue, according to the data from an Exempt Property Record Card that’s posted on the Town of Brookline Assessor’s website. Yet between 2007 and 2016 the assessed valuation of the Park School Corporation’s day school campus property increased from $25,906,000 to $49,764,900.

As Jeremy Pawloski noted in an April 19, 1998 Tab article, “though they use town amenities, including police, fire and other municipal services, for free,” Massachusetts’ constitution exempts private schools from paying property taxes. Yet Pawloski also reported in the same 1998 article that “in Brookline…the town has encouraged many local tax-exempt properties to make `payments in lieu of taxes’,” but, according to then-Deputy Town Administrator Brian Sullivan, “unfortunately for the town,” in 1998 “efforts to receive cash donations for services” had “all but fallen flat.”

First located in Brookline on Walnut Street when it was established (under a different name) in 1888 and following the Park School Corporation’s formation in 1923, the Park School was located in the 1960’s on 3.6 acres of land at Kennard and Hedges Road (where the Brookline public school system’s Lincoln grade school is now located).

But the Park School’s board of trustees, which then included a grandson of Lammot Du Pont and a son of Mary Du Pont Faulkner—Kim Faulkner—as one of its trustees, in the late 1960’s “concluded that” its private school’s Kennard Road “site and facilities were simply inadequate and that a new site should be acquired as soon as possible,” according to the Park School Corporation 2007 Spring Bulletin.

So, coincidentally, Park School Trustee Faulkner’s mother (who was born into an extended family that was described by Louis Rukeyser’s Business Almanac as “the wealthiest and most powerful dynasty in the United States” in 1991, “with a family fortune of over $8.6 billion” at that time) then “gave Park the incredibly generous gift of 14 acres of woods and fields on Goddard Avenue;” and “ground was broken in December 1969 to build the `new’ Park School,” according to the same 2007 Spring Bulletin. The donor of “the incredibly generous gift” received by the Park School, had previously inherited $250 million from her late father, Lammot Du Pont (who died in 1952), according to Gerard Colby’s Du Pont Dynasty book.

In September 1971, the Park School then opened on 14 acres of its current 34-acre campus, just across the street from Larz Anderson Park  (but on a different side of the park than Dexter Southfield’s campus); and the additional 20 acres of its Brookline campus were acquired when Mary Du Pont Faulkner donated 10 more acres of her Goddard Avenue property to the tax-exempt private school in 1980, and her son and daughter-in-law gave the Park School a first option to eventually buy the last 10 acres of the day school’s campus.

In recent years, around 540 grade school students have been enrolled in Brookline’s Park School private school and nearly 5,500 grade school students have been enrolled Brookline’s public schools. But although it paid less than $101 for the initial 14 acres of its Brookline campus that it received as a gift, the Park School has apparently not been eager to establish an open admissions and free tuition policy for all grade school age children of Brookline residents, whose parents might wish to enroll them at the Park School (where the average class size has been 14 students in recent years).
Instead, the “non-profit” Park School is requiring most of the parents whose children are enrolled there to pay $32,490 for a first and second-grade classroom seat, $33,890 for a third, fourth and fifth-grade classroom seat and $38,750 for a sixth, seventh and eighth-grade classroom seat during the 2016-2017 academic year.

Like Brookline’s Dexter Southfield private school, the Park School also claims to be a “non-profit” educational operation. Yet according to the Park School Corporation’s Form 990 financial filing for 2014, between July 1, 2014 and June 30, 2015, the Park School’s total revenues of $33,704,139 exceeded its total expenses of $25,014,673 by $8,689,466; and its net assets increased from $63.5 million to $65.7 million during the same period. In addition, the value of the tax-exempt Park School’s endowment increased from $43.8 million to $48.4 million between July 1, 2014 and June 30, 2015.

The same Form 990 financial filing also indicated that between July 1, 2014 and June 30, 2015, the Park School paid both an annual base salary/total annual compensation of $145,335 to former Head of School Jerry Katz and an annual base salary of $248,895/total annual compensation of $411,840 to its then-Head of School Michael Robinson. In addition, tax-exempt bonds of $9,435,000 on February 21, 2007 and $14,025,500 on April 1, 2012 were issued by the Massachusetts Development Finance Agency to apparently finance and refinance private school building construction costs, according to the same 2014 Form 990 financial filing.

The Park School’s board of trustees may still not be too interested in paying more property taxes or payment in lieu of taxes to help the Town of Brookline fund its public school system (which requires around $108 million each year to operate); or in providing more community benefits (such as, for example, open admissions and free tuition for all children of Brookline residents). One reason might be because some of the wealthy folks on its board of trustees have perhaps been more interested in apparently using hedge fund money to speculate and attempt to profit from for-profit U.S. health industry firm stock ownership, searching for lucrative real estate development deals, sitting on U.S. federal court judicial benches or filling high Massachusetts state government agency posts?

Park School Trustee Conan Laughlin, for example, manages North Tide Capital (a $2.9 billion hedge fund firm whose offices are located at 500 Boylston Street in Boston), which apparently makes 88 percent of its speculative investments in for-profit health care industry corporations like the following: Select Medical Holding Corporation (in which it owned $163 million worth of stock in September 2016); the Tivity Health Inc./Healthways fitness centers industry firm (on whose corporate board Laughlin also sits); and the Community Health Systems chain of 158 for-profit hospitals in 22 states (in which North Tide Capital owned $34.1 million worth of stock in September 2016).

Coincidentally, a 2015 study revealed that 7 of the 10 hospitals in the United States which charged their uninsured patients the highest medical costs above what Medicare allowed in 2012 were for-profit hospitals owned, operate or leased by Community Health Systems [CHS]’s hospital chain affiliates. And according to a May 18, 2016 National Nurses United [NNU] labor union press release, “CHS has engaged in rampant and serious unfair labor practices at their hospitals, including terminating Registered Nurses [RN] leaders in a wide scale attempt to weaken support for the union and forestall reaching initial collective bargaining agreements.”

Another Park School trustee, Seth Brennan, is a co-founder and Managing Partner of Lincoln Peak Capital: a speculation/investment firm (with offices at 177 Huntington Avenue in Boston) that is “focused exclusively on investing in asset management firms” and which “currently has minority equity investments in five asset management firms which collectively manage over $55 billion in assets,” according to Lincoln Peak Capital’s website. In addition, Brennan also sits on Artisan Partners Asset Management’s corporate board and the Isabella Stewart Gardner Museum’s board of overseers.

The founder of the Corbelis residential land development/dealmaking firm and the Henley USA Head, Garrett Solomon, is also a Park School trustee. According to the London-based Henley private equity real estate investment/dealmaking firm’s website, in 2015 Henley “launched its first USA business” which “was underpinned with the announcement of Henley USA headed by Garrett Solomon and his team from Corbelis in Boston;” and it “has an active pipeline of deals” and “is aiming to have a business the same size as its European operation within short order,” where “total equity invested per deal currently range from $5 million to $150 million.”

Other members of the Park School’s board of trustees in recent years have included: the for-profit New Century Health CEO Atul Dhir; U.S. Federal Court Judge Denise Jefferson-Casper; and the current Undersecretary and Chief Operating Officer of the Massachusetts Executive Office of Labor and Workforce Development, Stephanie Neal-Johnson. In addition, Boston Public Library Trustee Laura De Bonis, a former Director of Library Partnerships for Google Book Service, has also sat on the Park School’s board of trustees in recent years.

Perhaps the time has come, however, for more local community-elected Brookline School Committee members and local Town officials to now be included on the board of trustees of “non-profit” Brookline private schools like the Park School (instead of top executives and officials of external for-profit corporations or state and federal external organizations)--in order to increase likelihood that Brookline’s private schools begin serving the local community’s public interest more in Brookline on their privately-controlled campus sites?