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Tuesday, August 31, 2021

"AT THE TAXPAYERS' EXPENSE": Bay City Academy "Farragut Schoolhouse" Lease Series-Part 2: Teachers Crowdfund For A $650 Room Air Conditioner...While Bay City Academy Pays Steven Ingersoll's $37,959 Farragut Schoolhouse Property Tax Bill?

"I work in a very old building that does not have air conditioner [sic] and my classroom has an entire wall of big beautiful windows that let in light, but also let in heat. During the first week, I knew that my classroom got warm. I wondered how students are able to concentrate. I have seen that many teachers in my school have gotten portable air conditioners through DonorsChoose or even buying one with their own money, but being a first year teacher, I thought I could wait a year. However, over the past three weeks as I have readied my classroom, I have realized that the heat will be a significant barrier." 

Part 2 appears Wednesday, with more exclusive revelations.

Monday, August 30, 2021

"AT THE TAXPAYERS' EXPENSE": Bay City Academy "Farragut Schoolhouse" Lease Series:-Part 1


Oh, what a tangled web we weave, when we first get in bed business with Steve--the gift that keeps on taking. 

In 2013, Steven Ingersoll crafted a twenty-year lease deal with the Bay City Academy for the Farragut Schoolhouse building that gave Ingersoll a soft landing when he ultimately defaulted on its Wildfire Credit Union construction mortgage. Ingersoll later revised the rental agreement in June 2016, obligating the Academy (not Ingersoll) to pay nearly $170,000 in delinquent payments that accrued between July 1, 2015 through June 30, 2016.

A second extension, dated June 30, 2019, revealed Ingersoll's scheme to use grossly inflated monthly rent payments, beginning July 1, 2019, to completely discharge his Wildfire Credit Union mortgage debt by June 30, 2023.



About a month before his April 10, 2014 federal tax fraud indictment, Steven Ingersoll ostensibly left the Bay City Academy, a Michigan charter school he co-founded, in the hands of Brian Lynch (left). 

During the Academy’s March 23, 2014 Board of Education meeting, the board voted to remove Ingersoll as the school’s “President of Educational Services” and appointed Lynch as the school’s new “Superintendent and President of Instructional Services. 

But Ingersoll’s greedy fingers were firmly in control of the Bay City Academy’s bank accounts: according to the Academy’s 2014-2015 financial report, in July 2014, the first month of that fiscal year, Ingersoll transferred $140,968 to his Smart Schools Management entity (SSM) in prepaid management fees and a “significant portion” of the Bay City Academy’s $759,972 annual lease payment obligation “prior to SSM earning the right to these payments”. 

According to the financial report, the charter school incurred a significant operating deficit in 2015, resulting in a crushing cash flow shortage—as of June 30, 2015, the Academy's liabilities exceeded its current assets by $1,374,477. 

That's pretty steep for an operation with $3,980,670 in total 2014-2015 revenues. 

The Bay City Academy was called on the carpet in late 2015 by then-Michigan Department of Education (MDE) State Superintendent, the late Brian J. Whiston, after neglecting to proactively report its ominous financial straits as required, belatedly reacting only after the MDE interceded and ordered the charter school to file a formal deficit elimination plan. 

The Bay City Academy's Madison Arts campus, housed in a former church building on Madison Avenue in Bay City, closed in late 2016 after Steven Ingersoll defaulted on its mortgage, sticking the taxpayers with a $1.5 million bailout of original lender Chemical Bank, with the USDA coming to the financial institution's rescue. 

In addition, Ingersoll also defaulted in 2016 on a $782,828 mortgage for the Bay City Academy's Farragut Schoolhouse building, leaving Wildfire Credit Union with a lovely parting gift: an 'assignment of rents' clause requiring Michigan taxpayers to open up a spigot of taxpayer money for Brian Lynch's Mitten Educational Management to pay off Ingersoll's corporate debt. 

But even after he'd “left the building”, Steven Ingersoll still hung around. 

After all, he still “owned the building”.

Hell, he even signed a 2017 lease renewal document from federal prison!

And, with your (unwitting) help, he will soon own the Farragut Schoolhouse free and clear of any mortgage.


Bill DiSessa, a spokesman with the Michigan Department of Education, said the state isn't concerned about Ingersoll being the landlord of the charter school buildings. 

“There is some irony in there, given the circumstances, but we still approved the plan,” DiSessa said. “As long as no management company folks involved with Smart Schools are involved, then we're OK.”
April 5, 2016

“We disclosed that information with the state superintendent and they are well aware that we are still obligated by our lease agreement,” said Brian Lynch, who runs Mitten Management, the school's management company. 

Lynch said his management company is negotiating with Ingersoll about the future of the lease agreement. He declined to comment on the nature of those negotiations or any details of the lease agreement. 
  April 5, 2016

Well, of course Lynch said that he was negotiating with Ingersoll--tacitly acknowledging that Ingersoll (a Smart Schools management company folk if there ever was one) remained firmly in charge of the situation.

Steven Ingersoll purchased the building at 301 N. Farragut in Bay City in February 2012 for $105,000, and by June 2016, he'd defaulted on a nearly $800,000 construction mortgage loan issued to his "Farragut Schoolhouse LLC" entity on March 28, 2013 by Wildfire Credit Union.


The credit union filed a "Notice of Enforcement" on June 8, 2016, exercising the mortgage's "Assignment of Rents" clause.

Tomorrow: all the lease agreements