Nearly 18 months after signing an exclusive easement agreement, the Grand Traverse Academy board has apparently pulled the plug on a deal the Traverse City charter school struck with Mark Noss, former board president and current head of its management company.
Under the terms of the deal, Noss (and his property development entity, MDN Development, LLC) was to construct an expansion for a new math and science wing and lease it back to the school.
However, it appears the Academy board never sought an attorney's opinion regarding possible conflicts of interest, including the arrangement's potential for jeopardizing the school's federal tax exempt status.
In 2012, the IRS identified its primary issue of concern as the possibility of impermissible private benefit to a for-profit management company involved in a charter school’s operation (however, a nonprofit management company’s operation of a charter school can also trigger IRS scrutiny and possible denial of tax exempt status).
A complete analysis, including many previously unrevealed facts, coming Monday.