“FLIP THIS SCHOOL”: NORTH CENTRAL ACADEMY DOUBLES DOWN; BAY CITY ACADEMY RATTLES THE TIN CUP FOR TISSUES
In 2020, the BCA stated in a “due diligence” document related to the sale of the North Central Academy’s Mancelona location to Robert Munger’s Alba Ventures, LLC that it “made sound financial sense” to lease the building from the new owner rather than purchase it directly for $250,000.
A year later, in its June 2021 Audited Financial Statements, the Bay City Academy revealed it purchased their “Mancelona location during the fiscal year ended June 30, 2021”. On page 8 of the report, the charter school acknowledged a “$200,000 land contract” as outstanding long-term debt.
But if you thought the BCA got a really great deal, you’d be wrong.
In fact, the charter school opted to buy the building from Robert Munger’s “Alba Ventures, LLC” on June 30, 2021 for $500,000.
According to the Settlement Statement and the Memorandum of Land Contract (both shown below), the BCA made a $300,000 deposit and financed the $200,000 balance via a land contract from Alba Ventures.
Between 2020 to 2021, enrollment in the Bay City Academy’s two-school district went up more than 23%. But that hasn’t stopped the charter school from rattling the tin cup for tissues in late March 2023.
In addition, according to a March 5, 2023 Record-Eagle article, the BCA has a healthy chunk of taxpayer cash remaining.
“The first two rounds of Elementary and Secondary School Emergency Relief, or ESSER, funds were a huge boon, as they allowed the district pay expenses while paying off their debt, Lynch said. They still have about $1.2 million in ESSER III money, he said.”
According to Michigan ESSER guidelines, schools are allowed to purchase “real property” with those funds.
The building has a checkered history, as does its seller.
The now-defunct Concord Academy-Antrim, a Mancelona charter school that went tits-up after its charter was not renewed by authorizer Lake Superior State University, had its program and students transferred to Steven Ingersoll’s Bay City Academy on June 30, 2012.
The Concord Academy subsequently defaulted on its $2,180,000 municipal bond, with trustee U. S. Bank formally leasing the building to the Bay City Academy.
The Bay City Academy continued to occupy the building and was required to “insure and otherwise protect the premises”.
However, after reviving its Michigan corporate existence on January 25, 2016, the Concord Academy transferred the building’s title to the Bay City Academy. It was registered in Antrim County’s Register of Deeds office on February 29, 2016.
According to documents filed by U. S. Bank, the Bay City Academy agreed to “occupy, protect, insure the premises” through the conclusion of the current school year. Its present plans for the 31,000 square foot building have not been disclosed, which in part relied on the renewal of its charter. Although the Bay City Academy’s charter was scheduled to expire on June 30, 2016, it was renewed by Lake Superior State University in late November 2015 through June 30, 2018.
That title transfer was “non-recourse”, meaning the Bay City Academy was not required to assume responsibility for the the outstanding mortgage.
After the Concord Academy closed, the school property was shopped around by a commercial real estate broker, who in 2013 listed the building at $890,000. Alba Ventures, LLC entered into a “Purchase and Sale Agreement” dated April 28, 2020 to buy the property for $250,000.
According to “decree” filed July 17, 2020 in Minnesota District court by a Trustee overseeing the sale of the Concord Academy’s former home, the Michigan commercial real estate market was “distressed” post-COVID-19.
What a difference a year makes.
MANCELONA BUILDING PURCHASE
In its June 2021 fiscal year report, the Bay City Academy acknowledged it had purchased the North Central Academy’s Mancelona location for $500,000, financing it with a $300,000 down payment and a $200,000 10-year land contract extended by seller, Robert Munger’s “Alba Ventures, LLC.” (Munger bought the building on April 29, 2020 for $250,000.)
If the BCA had purchased the building from another owner, the story would seem to be just another savvy seller. However, Munger is a Grand Rapids-based “developer” with a history of bankruptcy and fraud.
ROBERT MUNGER BACKGROUND
In addition to property development activities, Munger has a full-time gig as the CEO of Exodus Place, a Grand Rapids-based nonprofit offering a transitional housing facility for men.
Munger declared bankruptcy in 2009, ultimately discharging nearly $5.0 million in debt. Additionally, Munger falsely claimed military service and (according to federal court records) was an agent responsible for perpetuating the growth of an early 1990’s Ponzi scheme.
STOLEN VALOR
In a July 18, 2014 Grand Rapids Business Journal article (Inside Track: Munger gives men a chance to leave their past behind) Munger boasted about his “military service” as a U. S. Army officer in Honduras, including the assertion in his professional resume.
Munger promulgated this colorful terminological inexactitude:
“Munger was commissioned in the U. S. Army in 1985 when he was 20 years old. He was 21 when he was deployed to Tegucigalpa, Honduras, as a fire support officer directing a team of “forward observers” charged with bringing “indirect” fire into a target.
This was at a time when the United States was establishing a military presence in Honduras to support the Honduran army waging a campaign against Marxist-Leninist militias.
During a training exercise, the Honduran fire direction team plotted Munger’s location on their map, which should have served only as a reference point to calculate the actual target’s angle, Instead, their cannon fired a shell in Munger’s immediate vicinity. The explosion’s percussion propelled Munger into the air.
“I didn’t know what hit me,” said Munger. “I still remember the percussion. It was like an invisible wall lifting you off the ground.”
That “wall” was “invisible” because it didn’t exist.
In August 2020, I began investigating Munger’s claims.
I contacted the Army’s Public Affairs office and ultimately received Munger’s NGB Form 22.
Although Munger served honorably in the Michigan National Guard between May 1985-May 1988 while attending Western Michigan University, his official service record, attached to this email, confirmed Munger never left the country for any overseas deployment and was never commissioned as a U. S. Army officer.
In the early 1990s, Grand Rapids area resident, Daniel Broucek, became involved in the electronic discount card business. According to federal court documents filed in Broucek’s bankruptcy case, after “pouring the majority of his time and money into this business for several months, it failed to produce much income.”
In order to continue working on his venture and keep his head above water, Broucek made like electricity and took the path of least resistance.
He fabricated a phony business venture to lure in “investors”. Existing only in his mind, and never as a legal corporate entity, and hatched solely as a device to produce income for himself, Broucek started Pupler Distributing Company in early 1993.
Word spread on the Dutch Calvinist streets of Grand Rapids that Broucek had a business opportunity that would yield a high rate of return on a short-term loan, and he soon had investors willing to plunk down money in his fictitious company.
In federal court records, Broucek asserted he initially believed that before the “loans” came due, his electronic discount card business would start turning a profit and the investors would be repaid.
The Ponzi scheme collapsed in 2002 after a Grand Rapids bank Corporate Security officer contacted the FBI regarding concerns about the Pupler account.
Broucek filed bankruptcy on November 14, 2002, launching a years-long series of civil forfeiture and bankruptcy trustee adversary proceedings.
On November 8, 2004, bankruptcy trustee Thomas A. Bruinsma filed an Adversary Complaint against Robert Munger and his “Duray Development, LLC” entity.
In the complaint, Bruinsma confirmed that Munger/Duray had made “several investments” with Broucek over “many years” and “received substantial interest and commission payments” from Broucek.
Bruinsma’s complaint went on, stating that Munger “should have known or knew” of the unlawful or fraudulent nature of Broucek’s operation, but that Munger “continued or even increased his investments” with Broucek.
On May 25, 2005, Munger signed a formal settlement agreement, agreeing to pay nearly $173,000 to the Trustee, representing his net “Ponzi profits”, and two instances of “preference liability” for payments made within 90 days prior to Broucek’s bankruptcy filing.
