Michael Karp
One of the most complicated things about researching school finance is the number of policies, entities, institutions, authorities, and apparatuses involved. They're opaque and hard to follow. The language is difficult to understand. Mapping it all is intimidating. One of the approaches I've taken in the last few years to name and critique this system is to use narrative. At the center of narrative are characters, and I've found that sometimes focusing on one or two people can illuminate a whole terrain of institutions and policies. This post is about one individual who, when you look at what he does, brings a whole part of the state to light when it comes to education finance in US racial capitalism. His name is Michael Karp.
About a year ago, I fell down a rabbit hole of a rabbit hole that led to Karp. I was looking into the commonwealth of Pennsylvania’s school infrastructure reimbursement program, PlanCon. (I recently did a spreadsheet livetweet of PlanCon's grants to school districts, pretty interesting.) PlanCon historically was the entity that reimbursed school districts for capital expenditures. It was halted in 2012, briefly reopened, and then halted again. I read that, since 2016, PlanCon has been financed by the Commonwealth Financing Authority (CFA), a program in the state’s economic development department. Before that it was financed through taxes and then Gov. Tom Wolf, for some reason, decided to finance it using bonds through the CFA.
The thing about the CFA is that it's a spigot for all kinds of project financing around the state. Want to build a park? A playground? A new industrial facility? The CFA can green-light state financing for it. There's been reporting that meetings of the CFA have been contentious of late, combining absenteeism with little discussion of high-stakes proposals. It's obscurity is matched by its power for economic development.
I still don't know the whole story about the CFA, but while I was investigating it I came across Michael Karp's name several times. He's on the CFA board. But he's so much more. He's a West Philly real estate investor that started University City Housing. He's the secretary/Treasurer of the Pennsylvania Intergovernmental Cooperation Authority, the state-level entity that oversees Philly’s budget since it went bankrupt in the 200s (and recently came up for a renewal vote). He's the founder of Belmont Charter School network and actually served on the Philadelphia Board of Education before the School Reform Commission took over. He's gotten special treatment on huge real estate deals in West Philly, including holding up a $52 million project to build a new police head quarters. The state government invented an entire category of school just for him.
Who is this guy? Where does he come from?
Karp is a fascinating figure sitting at the intersection of real estate and education policy. He's been in the news most recently for switching right wing horses in the middle of the Republican primary for governor. He'd been backing Jake Corman, the head of the state senate, but then gave a few million to Delco politician Dave White. Ultimately rightwing extremist Doug Mastriano will get the nomination, maybe showing the limits of money in politics. Karp puts up a lot of money behind moderate and conservative candidates running for office, as well as having crucial influence over existing state apparatuses that control public funds for infrastructure.
There's not a whole lot out there on Karp, despite his being so powerful. One of the few recorded public appearances of him I could find was a talk he gave to the Jewish Business Network in 2014. We get some detail about him from it. He speaks in numbers, bottom-lines, and a constant stream of confident associations between disparate experiences and the lessons one should draw from them. At that time, he was building a house in Scottsdale, Arizona that could serve 100 people for dinner, and he mentions doing that so he could host AIPAC fundraisers.
He also tells his origin story. He was an undergraduate at Penn and saw opportunity in the housing infrastructure around the university, buying some properties and taking care of them himself as he rented them out. He grew the business until it was University City Housing. He started by buying a building at 39th and Pine in West Philly. He dropped out of graduate school to keep up the business, he said "the numbers worked" and that it was highly profitable. He tells a little anecdote about how he got the money for the business initially: "I was a nice Jewish kid, and the banker in Camden said 'you're a nice Jewish boy and I know you'll pay the money back'." I'm Jewish myself and this anecdote hits home. These kinds of connections certainly create the conditions for this kind of success. His parents put up some money, his girlfriend lent him some money, and he built the business slowly.
UCH became an empire. But Karp wanted to diversity his holdings. He co-owned a plastics factory in Ohio. He owned an oil terminal in Philly, distributing the oil. Then he decided to go into internet and cable. He's a founder of HotWire Communications based out of Florida and serving across Georgia and Texas, which has also been very profitable and sealed his power in the region as someone with the capital to influence policy.
In this vein, his comments on schools are telling. He has a capitalist's sense of education's importance in urban development. And the specific form of American racial capitalism in education policy comes out clearly in his remarks.
"One of the things that killed housing [in Philly] was schools," he says. "There was forced bussing...The lack of quality of education pushed people to think they had to pay tuition to private schools." Likening charters to private schools, but without the tuition, he thinks charter schools are quality education for free and will help save the city. It's because of Karp and people like him that we have the marketized, diced up, and strange public school system we have in Philadelphia. And it's people like Karp that influence the material conditions of our city's existence when it comes to education, housing, and beyond.