Hundreds of kids without a school after VLT Academy closes following lawsuit over unpaid rent

Lawyer: Parents not notified of VLT's closing

CINCINNATI – A Cincinnati charter school threatened by a lack of funding will not reopen for this upcoming school year, forcing hundreds of parents to scramble to find a new school for their children.

VLT Academy, headquartered on Central Parkway across from Horseshoe Casino, has been padlocked and closed down following a lawsuit filed July 31. Its landlords – Sun Building Limited Partnership, LitVak Holdings, LLC and Triage Properties, LLC – are suing the school for more than $1.5 million in unpaid rent.

In the lawsuit, Sun Building claims VLT Academy owes it more than $1.5 million, not including daily penalties and other lease agreement-related fines. LitVak Holdings said the school owes it more than $90,000, and Triage Properties claims it is owed more than $67,000.

VLT entered into a lease agreement in 2010 with Triage Properties for a 25,000 square-foot building at 209 E. 12th Street and a 13,000 square-foot building at 221 E. 12th Street. The school entered into its lease with LitVak Holdings in 2011 for a building at 1607 Mansfield, and another lease in 2012 with Sun Building Limited Partnership for a 63,000 square-foot space at 1102 Sycamore Street.

The three landlords are suing the school, its superintendent Valerie E. Lee, her husband and school project manager Clyde Lee and each member of the school’s board of directors.

In May, VLT Academy’s sponsor, Educational Resource Consultants of Ohio, pulled its contract with the school due to poor performance. The decision meant the school would shut down and leave hundreds of students without a place to learn unless it found another sponsor.

In July, Hamilton County Common Pleas Court Judge Nadine Allen ordered the Ohio Department of Education (ODE) to sponsor the school in an attempt to save it from closure. The ruling required the state to give VLT nearly $300,000.

But with this latest lawsuit, the school will not be opening its doors in the fall.

"Where are (the students) going to go? They have to find new schools, new teachers, new bus routes," said former VLT teacher Patty Gilsdorf. "They're just clueless."

On Monday, a sign outside the school’s downtown headquarters still advertised open enrollment for grades kindergarten through 8 – but the phone number listed on the sign is disconnected.

A sign outside the school’s downtown headquarters still advertises open enrollment for grades kindergarten through 8 – but the phone number listed on the sign is disconnected.

A “for lease” sign has also been placed on the side of the building.

VLT's attorney, Cornelius "Carl" Lewis, told the I-Team no letter will go out to parents or students about the school’s closure because the school no longer has a staff.

"There was no official notice that there's going to be no school this year," Gilsdorf said.

A parent of a child registered with the school told the I-Team Monday the only reason she learned about VLT’s closing was because she went to its headquarters to file some paperwork for the upcoming school year. 

She said she is now in a last-minute search find her child another school after discovering the padlocks on the door.

Gilsdorf said VLT's closing gives Ohio charter schools a bad name.

"Some of them are successful, and they are run by people who are really thinking about the kids." Gilsdorf said. "This is not the case. Not the case at all. They are not thinking about the kids."

In the past, ODE has called VLT Academy "a demonstrable academic failure" that did not meet 97 percent of state standards. The state also called it "one of the worst schools in Hamilton County."

VLT is one of Cincinnati’s largest charter schools, and was the target of an October 2012 I-Team investigation revealing the taxpayer-funded school was run like a family business. 

The I-Team showed VLT Academy always picked the most expensive company for one of its largest contracts, despite an operating loss of about $2.8 million in 2011.

According to an audit released by the Ohio Auditor of State, CEED Janitorial Services was paid $348,900 in 2011 to clean VLT Academy. Valerie’s husband, Clyde, is the owner of CEED, and was also on the school's payroll as a project manager making a $65,000 annual salary.

VLT Academy has been padlocked and closed down following a lawsuit filed July 31.

Despite more operating losses in 2012, the lawsuit states Valerie continued to enter into contracts with her husband, paying him in total more than $1.5 million, while “ignoring and refusing bids substantially less than that paid to (Clyde)” – including one by a janitorial service qualified and experienced in school services.

RELATED:
Investigation Part 1: Cincinnati school a family business
Part 2: School provision allowed officials and family to profit from tax money

VLT also paid Valerie’s daughter, Echole Harris, $149,000 over two years for multiple job titles, according to the suit.

“At the same time, the tens of thousands of monthly (debt owed) in rent continued to mount,” the lawsuit states.

The lawsuit claims Lee, in her capacity as superintendent, converted money and revenue received by VLT for her own personal use by paying herself $75,000 on two separate occasions on top of her annual income.

The landlords suing VLT claim the school’s board of directors knew all of the issues stated in the lawsuit, including the state’s findings that the school violated federal grant terms and failed to comply with financial reporting and contract bidding procedures required by law.

A “for lease” sign has been placed on the side of VLT Academy.

The lawsuit states the actions of VLT’s board and directors constitute “willful, wanton and grossly negligent conduct, causing VLT to waste corporate assets and spend unnecessary funds.”

“(Valerie) breached her duties as director and officer by engaging in self-interest and related-party transactions which were unlawful,” the suit states.

The plaintiffs in the lawsuit say they are entitled to seize all of VLT’s property, including computers, furniture, vehicles and more. They are also seeking unpaid funds and damages, including attorney fees and other expenses.

Valerie and Clyde Lee have since filed a motion to dismiss the lawsuit, claiming VLT’s landlords have “failed to state a claim against (them) upon which relief can be granted.”

The motion states neither Valerie or her husband are “officers or directors of VLT” and therefore “cannot be liable in any manner.”

In reaction to the closing of the charter school, Cincinnati Public Schools says they have open seats and would welcome VLT students with open arms. Any parent of a VLT student looking to find a school for their child with CPS can call the Customer Help number at 513-363-0123 or visit http://www.cps-k12.org/community/customer-service/customer-help-center

Hope 4 Change Academy is a charter school already in the process of moving into the 29 E. 12th St. location and is accepting new students. You can find more information about that academy here. 

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