Will Whittle be around next year?

[Anonymous]

Anonymous wrote:They signed a 30-year (I think) lease on the portion of the Intelsat building they're in. But as far as I've ever heard, they don't own their space.

When these for-profit schools lease a space long-term then spend millions on outfitting is as a school, what they invested becomes an asset that cold maybe be subject to foreclosure. A lawyer would have to answer that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They signed a 30-year (I think) lease on the portion of the Intelsat building they're in. But as far as I've ever heard, they don't own their space.

When these for-profit schools lease a space long-term then spend millions on outfitting is as a school, what they invested becomes an asset that cold maybe be subject to foreclosure. A lawyer would have to answer that.

Aha! Thanks. I was wondering how that worked.

[Anonymous]

This situation is definitely a bit complicated. The landlord (who doesn't own the building outright but rather under a master lease from the DoD) took out a sizable loan in the hundreds of millions to fund all the improvements Whittle wanted. This is a pretty standard practice in most commercial leases and the cost of the improvements essentially gets rolled into the lease. Given Whittle's track record with paying any and all creditors, it is safe to assume they haven't been paying rent either which means the landlord doesn't have the cash flow from which they expected to cover the financing costs on the TI loan. And the bank presumably is tired of sitting around while the loan slips further and further into default. Hence the foreclosure. In addition to the equity investors in the school, the landlord's investment in the building is likely wiped out, and the bank may also take a loss if the foreclosure does not net more than the loan amount.

A right royal mess all around. Doesn't seem like the parent or teacher community is aware of these developments from the posts above.

[Anonymous]

Anonymous wrote:This situation is definitely a bit complicated. The landlord (who doesn't own the building outright but rather under a master lease from the DoD) took out a sizable loan in the hundreds of millions to fund all the improvements Whittle wanted. This is a pretty standard practice in most commercial leases and the cost of the improvements essentially gets rolled into the lease. Given Whittle's track record with paying any and all creditors, it is safe to assume they haven't been paying rent either which means the landlord doesn't have the cash flow from which they expected to cover the financing costs on the TI loan. And the bank presumably is tired of sitting around while the loan slips further and further into default. Hence the foreclosure. In addition to the equity investors in the school, the landlord's investment in the building is likely wiped out, and the bank may also take a loss if the foreclosure does not net more than the loan amount.

A right royal mess all around. Doesn't seem like the parent or teacher community is aware of these developments from the posts above.

Thanks for the explanation......What a disaster. And for so many people. Since it's on federal land, can anybody try to go after the government for money? I've been told that the feds have to sign off on all tenants to that building, although that could be an urban myth, I guess....

[Anonymous]

Anonymous wrote:This situation is definitely a bit complicated. The landlord (who doesn't own the building outright but rather under a master lease from the DoD) took out a sizable loan in the hundreds of millions to fund all the improvements Whittle wanted. This is a pretty standard practice in most commercial leases and the cost of the improvements essentially gets rolled into the lease. Given Whittle's track record with paying any and all creditors, it is safe to assume they haven't been paying rent either which means the landlord doesn't have the cash flow from which they expected to cover the financing costs on the TI loan. And the bank presumably is tired of sitting around while the loan slips further and further into default. Hence the foreclosure. In addition to the equity investors in the school, the landlord's investment in the building is likely wiped out, and the bank may also take a loss if the foreclosure does not net more than the loan amount.

A right royal mess all around. Doesn't seem like the parent or teacher community is aware of these developments from the posts above.

If anybody's interested, here are some old clips with a few details on how this financing mess started. A lot of people didn't look very closely at Whittle's record, it seems. This is sort of like "Whittlesburg" all over agai. The Biz Journal lets you read a few articles free --

https://www.bisnow.com/washington-dc/news/capital-markets/owner-of-intelsat-building-closes-225m-financing-deal-55m-equity-sale-after-bringing-in-private-school-91568

https://www.globallegalchronicle.com/4000-connecticut-avenue-nw-in-washington-dcs-refinancing/

CW was already pulling similar tricks back in 1989, including with architecture and real estate. One of his leftovers from that project was knosn as "Historic Whittlesburg."

https://observer.com/2012/06/has-avenues-mastermind-chris-whittle-learned-his-lesson/

Mr. Whittle raised eyebrows again in 1989, when—having renamed his company Whittle Communications and selling a 50 percent stake to Time Inc. for $185 million—he broke ground on a baronial $50 million neo-Georgian corporate campus, soon to receive the nickname “Historic Whittlesburg.” Occupying two razed blocks in the middle of downtown Knoxville, the headquarters was designed by leather-man starchitect Peter Marino, who also worked on numerous Whittle residences.

Just a few years later, Whittle Communications suffered a spectacular collapse, a saga chronicled in James B. Stewart’s New Yorker profile “Grand Illusion,” which uncovered problems with the company’s accounting (it hadn’t paid state taxes on Channel One’s VCRs and TVs) and described Mr. Whittle as grandiose, profligate and self-deluded.

The company’s assets were split up and liquidated, and its headquarters put on the market. It now serves as a splendid federal courthouse.

[Anonymous]

It says something about the man's cultish personality that he has been able to keep raising money for ill conceived and ill fated ventures for the past 40+ years despite all this information in broad daylight in the public domain... Most of us would have been convicted for fraud for far less!

[Anonymous]

Anonymous wrote:It says something about the man's cultish personality that he has been able to keep raising money for ill conceived and ill fated ventures for the past 40+ years despite all this information in broad daylight in the public domain... Most of us would have been convicted for fraud for far less!

That’s what I can’t get over. Why do people still give him money?

[Anonymous]

"The biggest contribution business can make to education is to make education a business." - Chris Whittle, The Nation, February 17, 1992

[Anonymous]

Anonymous wrote:

Anonymous wrote:It says something about the man's cultish personality that he has been able to keep raising money for ill conceived and ill fated ventures for the past 40+ years despite all this information in broad daylight in the public domain... Most of us would have been convicted for fraud for far less!

That’s what I can’t get over. Why do people still give him money?

Because, as has been said many times in this thread, people—particularly wealthy people who think they exist outside of society as a whole— love a “disruptor.” He’s the bad boy of education, not playing by everyone else’s rules!

The only difference between Whittle and, say, Elizabeth Holmes is that Whittle hasn’t ripped off the right people yet. When he does, he’ll be on trial, but he’ll still have a core group of defenders arguing that “you just can’t see his vision!”

[Anonymous]

Does anyone have a link to the foreclosure documents?

[Anonymous]

I laughed out loud reading the teachers post about Whittle school being a disruptor and how happy the kids are. This isn’t a teacher writing the post but a parent. It’s almost as if the parents at this school are in a cult. Believe me when I say majority of not all of the kids are on financial aid. The parents are fighting so hard for the school to close because they don’t want to go to their crappy neighborhood schools. The education at Whittle is trash. We have one more month before we leave and I couldn’t be happier. The community rallied and got funds and suddenly everyone was super happy and had high hopes for more money that’s coming through. Since the lead investor isn’t giving the go ahead they are turning on each other. Just the other day the messages started at 7am and they all started turning on each other all because someone’s husband was erased from the group chat. She stood up for herself and her husband and the cult went crazy. I haven’t told them that we are leaving. They are all so unstable at the school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It says something about the man's cultish personality that he has been able to keep raising money for ill conceived and ill fated ventures for the past 40+ years despite all this information in broad daylight in the public domain... Most of us would have been convicted for fraud for far less!

That’s what I can’t get over. Why do people still give him money?

Because, as has been said many times in this thread, people—particularly wealthy people who think they exist outside of society as a whole— love a “disruptor.” He’s the bad boy of education, not playing by everyone else’s rules!

The only difference between Whittle and, say, Elizabeth Holmes is that Whittle hasn’t ripped off the right people yet. When he does, he’ll be on trial, but he’ll still have a core group of defenders arguing that “you just can’t see his vision!”

This is so true. They all really believe they are the cutting edge.

[Anonymous]

Anonymous wrote:I laughed out loud reading the teachers post about Whittle school being a disruptor and how happy the kids are. This isn’t a teacher writing the post but a parent. It’s almost as if the parents at this school are in a cult. Believe me when I say majority of not all of the kids are on financial aid. The parents are fighting so hard for the school to close because they don’t want to go to their crappy neighborhood schools. The education at Whittle is trash. We have one more month before we leave and I couldn’t be happier. The community rallied and got funds and suddenly everyone was super happy and had high hopes for more money that’s coming through. Since the lead investor isn’t giving the go ahead they are turning on each other. Just the other day the messages started at 7am and they all started turning on each other all because someone’s husband was erased from the group chat. She stood up for herself and her husband and the cult went crazy. I haven’t told them that we are leaving. They are all so unstable at the school.

why are you waiting a month? Why not leave now? I do know several kds have already left in January. Why stay?

[Anonymous]

Look, these posts are absolutely despicable. You can hide under the pretense that you’re doing it to warn other people but… That’s bull. At this point whoever replies can see what’s going on in the school. Right now all you all are doing is gossiping and hoping that the rest of the families that want the school to work eventually get shit off. Why hate, why not just let the situation play out as it will. It’s like you’re looking for your own version of desperate housewives. There are a lot of people affected by this. Myself being one. The cleaning staff who lost their jobs food vendors, security. The crazy part is if you were there you would know that all these people truly enjoy their job. This is the first job that had that I genuinely enjoyed going to work and it’s now gone from me. And I think it’s absolutely shameful that you all are deriving pleasure in reading about our misfortune. I’m not saying you have to champion Chris. But if anything wouldn’t you hope that another system whoever that may be might come in and save the day. Why hope for everything to close down? It’s because you’re absolutely shameful. And no this is not anonymous my first name is Johnjoseph (yes one word) last name best.

[Anonymous]

Anonymous wrote:Look, these posts are absolutely despicable. You can hide under the pretense that you’re doing it to warn other people but… That’s bull. At this point whoever replies can see what’s going on in the school. Right now all you all are doing is gossiping and hoping that the rest of the families that want the school to work eventually get shit off. Why hate, why not just let the situation play out as it will. It’s like you’re looking for your own version of desperate housewives. There are a lot of people affected by this. Myself being one. The cleaning staff who lost their jobs food vendors, security. The crazy part is if you were there you would know that all these people truly enjoy their job. This is the first job that had that I genuinely enjoyed going to work and it’s now gone from me. And I think it’s absolutely shameful that you all are deriving pleasure in reading about our misfortune. I’m not saying you have to champion Chris. But if anything wouldn’t you hope that another system whoever that may be might come in and save the day. Why hope for everything to close down? It’s because you’re absolutely shameful. And no this is not anonymous my first name is Johnjoseph (yes one word) last name best.

I'm new to this conversation (just read the entire thread yesterday & today). I'm sorry you got screwed over.

As an educator looking at their website, it seems full of promise, innovation, great people, and a beautiful space. It's a shame that it hasn't worked out, and I do hope there is some organization that can come in and turn things around for these children, families, and staff.