I've long argued that one of the primary drivers behind current trends in education policy is the desire of private sector actors to tap public treasuries for profit, and that assertion is often met with incredulous responses that the majority of charter schools [for example] are non-profit. While organizations like Imagine Inc. have purposely blurred the line between non- and for-profit, the real profit seeking push is in real estate.

This LA Times story on CitiBank teaming up with Andre Agassi [of all people] offers us an object lesson on how the scheme works:

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Operators routinely have difficulty securing learning facilities because real estate is pricey. Traditional school funding sources -- public spending and philanthropy -- aren't sufficient to pay for construction on the scale Agassi and Turner hope to achieve...

"The only way to make a dent is to attract additional for-profit capital," Turner said. The fund is expected to raise up to $300 million, which would be leveraged through borrowing to secure as much as $750 million for school investments.

The fund would build facilities or retrofit existing properties that would be rented to charter school operators at what Turner called an "affordable" rate with the intention of eventually selling the facilities to the operators.

Accredited schools receive a certain amount of state funding per pupil. As new charter schools grow, they become financially more secure. By the fourth or fifth year of operation they should be stable enough to borrow tax-exempt money at a low interest rate from the municipal bond market and buy the school from the fund.

"What our fund does is provide a bridge to ownership," Turner said.

Investors in the fund profit from the rent and sale. Turner declined to say what the rate of return is expected to be, adding only it would be "market rate."

The fund's investors are "a very diverse group of institutional investors, university endowments, family foundations and pension funds," Turner said. Anchoring the fund are Citibank, Intel Capital and the Ewing Marion Kauffman Foundation.