The New York City Department of Education has wasted over a staggering $5 billion in taxpayer funds on rent to private landlords \u2014 often paying above-market prices to house flailing schools, a Post investigation found.<\/p>\n
The wasteful spending, uncovered via detailed examination of Checkbook data, harking back to 2010, has been slammed by political and real estate experts, who say the city has thrown money down the drain that could have been used to build schools and improve the standard of education in the nation\u2019s largest public school district.<\/p>\n
\u201cThat is taxpayer rent. It is taxpayer money that could be used to build schools, frankly,\u201d Democratic political consultant Hank Sheinkopf told The Post.<\/p>\n
\u201cIt would be better for the city to spend that money on after-school reading improvement sessions. Spending [the budget] on rentals doesn\u2019t accomplish that.\u201d <\/p>\n
While the city is meant to own most of the school buildings it runs, bringing costs down, fiscal data from 2024 shows that the DOE was on the hook for $235.6 million that year alone in lease payments across its 132 active leases, according to council data.<\/a> <\/p>\n This comes as The Post revealed this week how the DOE has spent over $100m in rent over on 3K centers that are still empty<\/a> \u2014 and as student test scores still lag<\/a>.<\/p>\n Worse, a New York Post review of city contracting records, property valuations and expert analysis reveals the DOE has locked taxpayers into decades-long leases on properties that, in several cases, were at the time worth a fraction of what the DOE has paid out.<\/p>\n At least one school building in The Bronx had a market value of zero in 1983 \u2014 when the city first took the lease \u2014 yet the DOE has since spent $52.16 million on that site alone. The building is now worth $29 million.<\/p>\n The New York City Department of Education has spent billions renting buildings from private landlords since at least 2010, according to public data records obtained by The Post. Robert Miller<\/p>\n Experts also estimate that the DOE is paying well above market rental rates in a number of buildings. The cumulative cost to taxpayers since 2010 has exceeded billions upon billions \u2014 money that built no equity, purchased no property and left the city with nothing to show but a stack of expired contracts.<\/p>\n 45-10 94th St., Queens<\/p>\n 45-10 94th St. in Queens houses Voyages Preparatory High School, Civic Leadership Academy and Pan American International High School. Google Maps<\/p>\n In the Woodhaven neighborhood of Queens, records show the DOE has paid roughly $3.2 million a year over the last two decades to lease the building at 45-10 94th St., home to Voyages Preparatory High School, Pan American High School and Civic Leadership Academy.<\/p>\n The contract, which runs through 2036, totals $96 million \u2014 and the city has already spent $48.07 million of it. <\/p>\n When the lease was signed in 2006, the property was worth an estimated $9.7 to $10 million, according to commercial real estate broker Adelaide Polsinelli of Compass. Today, it is valued at $28 to $30 million \u2014 nearly triple what the city could have paid to own it outright at the outset.<\/p>\n Voyages Preparatory<\/a> currently enrolls approximately 208 students \u2014 a school that is significantly under-enrolled and with only 29% of English language learners actually graduating. Pan American High School enrolls approximately 510 students; Civic Leadership Academy serves approximately 656 students.<\/p>\n Pan American and Voyages Preparatory place in the bottom 10th percentile of SAT test-takers, while Civic Leadership is placed below the national average. <\/p>\n 30-20 Thomson Ave., Queens<\/p>\n 30-20 Thomson Ave. in Queens, NY. BRIGITTE STELZER<\/p>\n At 30-20 Thomson Ave. in Queens, a sprawling facility housing the High School of Applied Communication, the DOE has spent $53.96 million and counting under a lease that runs through 2029. <\/p>\n In 2004, when the contract started, the property was worth $95 to $97 million, according to Polsinelli. It now fetches an estimated $125 to $131 million. By the time the contract ends, they will have spent over $65 million \u2014\u00a0until its renewal.<\/p>\n The high school has an average SAT score of 864, placing it below the national average of 1050. <\/p>\n 26 Broadway, Manhattan<\/p>\n 26 Broadway. Robert Miller for NY Post<\/p>\n At 26 Broadway in Lower Manhattan \u2014 the ornate Standard Oil Building, now home to several DOE-affiliated schools including the Urban Assembly School of Business for Young Women \u2014 the city paid $74.21 million in rent between 2009 and 2019 alone, and is currently in renewal. The building was valued between $225 and $230 million when that lease began. Today it is worth an estimated $300 to $308 million, according to Polsinelli.<\/p>\n \u201cAn important point to note is that the idea of the DOE occupying these properties and paying an above-market rent in many cases, makes the properties worth much more,\u201d Polsinelli said.<\/p>\n At the Urban Assembly School of Business, with just 125 students, an alarming 86% are chronically absent \u2014\u00a0missing at least 18 days a year or more \u2014 while academic performance lags far below national averages.<\/p>\n 275 Harlem River Park Bridge, The Bronx<\/p>\n 275 Harlem River Park Bridge. Francesca andre<\/p>\n At 275 Harlem River Park Bridge in The Bronx, the site was a railroad track when the city signed its lease in 1983. But the property is now estimated at $29 to $30 million, value that has accrued entirely to the landlord over 40 years of city-funded occupancy. The schools there, which became PS 274\/the New American Academy, ran under a lease that ended in 2023 at a total cost of $52.16 million. The latest renewal contract has not yet been revealed.<\/p>\n Only 26% of students at this school met state standards on the state English test, according to city data. <\/a><\/p>\n Other contracts of the hundreds of other buildings listed tell similar stories: <\/p>\n Jonas Bronck Academy in The Bronx: a lease running from 2013 through 2029 has cost $26.4 million to date.<\/p>\n 21-16 44 Rd. in Long Island City, home to Information Technology High School and the John F. Kennedy Jr. School: a lease running from 2003 through 2033 \u2014 with $60.47 million spent thus far and the contract costing $72.49 million overall. The school sits on a toxic waste site \u2014\u00a0formerly a Gould Mercereau metal-plating warehouse that has faced controversy over the years. <\/a><\/p>\n EBC High School for Public Service at 1155 DeKalb Ave. in Brooklyn: a 30-year contract from 2013 to 2043 for $49 million, with $13 million spent thus far.<\/p>\n 143-04 101st Ave. in Queens, leased as a new ACS space: a $13 million contract, despite the property being worth only $7 to $8 million today. <\/p>\n 34-12 36th Ave. in Astoria, used as an alternative high school: a $22.8 million contract.<\/p>\n A lease held by the Abyssinian Cultural Building Corporation in Harlem: a $38 million lease, with $18.52 million spent thus far, under a contract running from 2004 to 2034.<\/p>\n 523 Cedar Hill in Far Rockaway: leased for administrative space and parking through a $15.32 million contract deal.<\/p>\n Brooklyn College Academy, leased for 15 years, with $21.6 million spent between 2012 and 2016. Current market values for the hundreds of other DOE-rented properties were not available by press time.<\/p>\n Teens are seen leaving Information Technology High School in Long Island CIty, NY, the location of leased land on top of toxic waste. James Messerschmidt<\/p>\n \u201cAlways better to own\u201d<\/p>\n Polsinelli, Vice Chairman at Compass and one of New York\u2019s most prominent commercial real estate brokers, reviewed the portfolio at The Post\u2019s request. Her assessment was unsparing.<\/p>\n \u201cIn 90% of the cases it is always better to own than rent, especially considering the many layers of bureaucracy \u2014 think payroll dollars \u2014 involved to get a lease executed through the DOE and the many hands and eyes that touch that lease costing millions in salaries on the government\u2019s payroll. There are many layers of redundancy that a site goes through before the DOE approves it and all the hired professionals involved to oversee the buildout, etc.\u201d Polsinelli said.<\/p>\n The logic cuts both ways: the city\u2019s presence as a stable, government-backed tenant inflates the value of these buildings \u2014 value that goes entirely to the private owners, not the public.<\/p>\n She added a broader, more pointed critique of how the city may have understood \u2014 or chosen to ignore \u2014 its own leverage.<\/p>\n \u201cA more contrarian perspective would be to consider what the properties would be worth had the city not leased them. The question is not whether the city should have bought instead of leased. It is whether the city understood, at any point, that it was the single most important variable in the value equation and chose to benefit someone else anyway,\u201d Polsinelli said.<\/p>\n A review of city Checkbook records and expert property valuations reveals a pattern of decades-long leases on buildings that have doubled and tripled in value on the public\u2019s dime, while the city collected no equity and students saw SAT scores fall to their lowest levels in at least seven years. Gregory P. Mango<\/p>\n Meanwhile, in the classroom<\/p>\n