At a charter school in Brooklyn Park, Minn., 11 miles northwest of Minneapolis, hundreds of students pour onto indoor artificial turf in a gym for 45 minutes of daily physical exercise. They do calisthenics and play volleyball and other games.
“Kids aren’t sitting around learning about volleyball, they are doing it,” said Jennifer Geraghty, the principal. “We have kids here who came here overweight. We have some kids who have lost like 20 pounds.”
Geraghty is convinced the daily exercise makes better students.
Outside, above the Greek-style pillars that define the building’s architecture, the school announces its name: Athlos Leadership Academy. The name is nearly identical to, and shares the logo of, a company more than 1,100 miles west in Boise. Athlos Academies sells a healthy-bodies curriculum to schools like Athlos Academy as part of a wider program to increase fitness, build positive character traits and furnish a curriculum aimed at gaining deeper understanding. Athlos Academies also helps charter schools to build their buildings.
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Athlos is the creation of Treasure Valley residents Jason Kotter, 41, and Ryan Van Alfen, 42, who founded and own the company. Neither is an educator. Both see links among fitness, performance characteristics and academic success.
“As kids become more physically fit, it drives cognitive success in the classroom,” Van Alfen said. “As they understand performance characteristics, that also helps them become better students, and we see that on standardized tests.”
Athlos Academies doesn’t own or operate the Brooklyn Park school or any other of the 11 charter schools in Minnesota, Texas or Arizona that buy its products and services.
Athlos Leadership Academy chose its name, as have several of the schools using parts of the company’s programs. Athlos Academies does not require the use of the Athlos name. Athlos, derived from the Greek work for contest, evokes the ancient Olympic Games.
“We love the name,” said Geraghty, whose school used to be named New Visions Academy. “We love that it stood for something.”
A quiet company
Athlos Academies began in 2007 largely to provide charter schools with a financial path toward constructing school buildings. That is one of the toughest challenges charter schools face, because they typically cannot sell construction bonds backed by property taxes to build schoolhouses, as traditional public schools can. A charter school is a publicly financed but privately run school that operates under a special charter from a state or school district (see box).
Athlos does all of its business out of state. The business was not well-known in Boise until a few months ago, when Kotter and Van Alfen made the news because they wanted to rent the Macy’s (and before that, the Bon Marche) building at 10th and Idaho streets in Downtown Boise. They sought it for a headquarters and a training center for educators from schools that use the company’s programs. Athlos’s present location is 418 S. 9th St. in Bodo.
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In September, Kotter and Van Alfen announced the purchase of the four-story, 115,000-square-foot building for $1.5 million. In the coming months they will renovate the building, which is now little more than a shell. They expect to move in next year..
Boise’s urban-renewal agency, the Capital City Development Corp., is buying an easement on the building’s facade for up to $750,000, the cofounders say. They are applying that money toward the sales price. The easement gives CCDC some control over what the exterior will look like.
Developer meets dentist
Kotter and Van Alfen met after a mutual friend decided the two had a lot in common and planned a lunch for them to meet.
Kotter was born and raised in Nampa, graduated from Nampa High School and went to Boise State University but did not graduate. He was working as a commercial real estate developer.
Van Alfen grew up in Bountiful, Utah. He earned a degree in medical biology from the University of Utah and studied dentistry at Case Western Reserve University in Cleveland, Ohio. He opened a practice in Eagle in 2002.
The two shared a belief in the importance of physical fitness and developing positive character traits as keys to successful education. Both are advocates of school choice, although their children attend traditional public schools in the West Ada School District.
They began by raising money from investors. They focused on what they called the social venture: attracting investors who were willing to take a smaller return for the social good the new schools would provide. Kotter left commercial real estate and Van Alfen sold his dental practice in 2006 to pursue the business.
Athlos is a management company whose services include preparing charter applications, bond-market assistance, staff and student recruitment, and teacher training. Bonds are backed by student-enrollment revenue, with positive academic results adding credibility to potential bond buyers.
The U.S. has about 7,000 charter schools.. About one third buy services like those offered by Athlos. About 12 percent of the service providers are for-profit companies like Athlos, according to the National Association for Public Charter Schools.
At first, Kotter and Van Alfen heard from charter schools eager to build their own buildings but daunted by the financial challenge.
The two compared revenue streams to expenses to see if schools could pay for the buildings they sought. Many were too small, including some with only 200 to 300 students, Kotter said. The Athlos model envisions schools like Brooklyn Park, with more than 1,000 students, for the building plan to pencil out.
Geraghty moved the former New Visions, with 300 students, out of Minneapolis and into the suburbs and increased the enrollment by 700 students. Athlos Academies built a building. The school moved into it last year and will pay Athlos $1.7 million this school year in rent.
Athlos has helped some 20 schools get built, sometimes using the cofounders’ personal guarantee for loans.. At the same time, Kotter and Van Alfen encourage schools to buy their buildings as soon as they can. Some already have, in a few cases after just a couple of years.
“Our goal is to get them in ownership as quickly as they possibly can” to stabilize their finances, Kotter said.
Kotter and Van Alfen say they have completed $300 million in school building construction and expect to handle up to $160 million this year on as many as eight schools – around $20 million each, including furnishings. Althlos is also expanding in Louisiana, Utah and Minnesota.
They declined to disclose revenues. All profits are plowed back into the business, they said.
The Athlos Way
Kotter and Van Alfen pepper talk about the business with sports terms. They refer to the new headquarters office as home court. Meetings among staffers are huddles.
While many traditional public schools limit physical activity, Athlos schools use it daily. “The link between performance in the classroom goes up exponentially if you are more active physically,” Van Alfen said.
Students are not pitted against each other in a competitive way, Kotter said..
Tied to the healthy bodies curriculum is an approach to improving performance in life and school by developing character traits such as grit and curiosity. Lessons are imbued with daily reminders of character traits that can lead to success.
“We talk about what’s going to help them perform better in life,” Van Alfen said. “How about being more courageous?. How is that going to help you when you go try and get that job and your last three applications just got denied?”
Geraghty adopted much of the Athlos program for her Brooklyn Park school beginning last school year.
First-year test results were unimpressive. The school scored below state averages in reading and math. Geraghty attributes that to rapid enrollment growth. She expects scores to start improving this school year.
Her school pays Athlos Academies $689,000 a year for the character and healthy-bodies curriculum, school uniforms, math and character-performance training for teachers, and marketing.
“I can tell you that in my many years as a school administrator, I have never seen the kind of impact on a school community as I have seen since converting to the Athlos model,” she said. “The three-pillar model not only focuses on student achievement, but also on health and character, which has in turn significantly impacted our school culture in an inspirational way.”
Where is Athlos going?
Texas is a big state for Athlos Academies, with seven schools using some of its products.
Athlos was poised for even more growth when a Dallas charter school laid out plans for six Athlos campuses of about 1,000 students each over the next five years. But as the application made its way through the state educational bureaucracy, six campuses were trimmed to two. When the application for the first school went before the State Board of Education in July, it was rejected.
Board members worried about the estimated $145,000 a year the school would pay to Athlos Academies for its services. Board members also seemed unsure about the connection between Athlos the school and Athlos the business.
“It was a complete surprise.” said Tiffany O’Neill, president of the Athlos Foundation, which sought the school. The foundation is resubmitting its application.
Kotter and Van Aflen say they don’t push their products or send salesmen into a territory to drum up business.
“We are waiting for those people to reach out to us,” Kotter said. “That is how we get to those markets.”