In 2010, Aspire Public Schools, a nonprofit public benefit corporation with charter schools in California and Tennessee, signed an agreement with the Sequoia district that stipulated it would use the loan to buy land and build a school, according to the lawsuit. At the time, it ran two schools in East Palo Alto: Aspire East Palo Alto Charter School for students in kindergarten through fifth grade and located at 1286 Runnymede St., and East Palo Alto Phoenix Academy, which was serving students in sixth through eighth grades.
Aspire purchased a property at 1039 Garden St. in East Palo Alto and built a new school for sixth through 12th grade students using funds from the loan. East Palo Alto Phoenix Academy relocated there, and the combined middle and high school opened in 2006. In exchange for the loan, Aspire agreed to enroll a minimum of 80 students who reside in the Sequoia district out of its 400 enrolled high school students that were projected per year through 2030, according to the lawsuit. Aspire "refused" to return the money when it cut back its high school program, the district states in the lawsuit.
"It is unfortunate that Aspire has not lived up to its obligations forcing the district to pursue litigation," district attorney Sarah L.W. Sutherland said in a prepared statement. "We remain hopeful a resolution can be reached."
East Palo Alto Phoenix Academy merged with Aspire East Palo Alto Charter School during the 2014-15 school year. In June 2018, Aspire said the school would enroll 20 seniors and no students in grades nine through 11 for the 2018-19 school year, and it is not enrolling any high school students for 2019-20, according to the lawsuit.
On Nov. 15, Sequoia officials notified Aspire that it should return the $4 million loan. Aspire responded on Dec. 3, stating that the statute of limitations to repay the loan had run out because East Palo Alto Phoenix Academy closed more than four years ago, according to the lawsuit. Sequoia officials responded on Dec. 20, reminding Aspire that the parties had signed an amendment to the agreement that transferred the condition of enrolling 80 Sequoia students to apply to Aspire East Palo Alto Charter School.
Aspire officials did not return requests for comment by press time.
A case management meeting is scheduled for 9 a.m. on Aug. 21. The full lawsuit can be viewed at tinyurl.com/aspirelawsuit.