City claiming that two Brown-linked charters owe back taxes

Two of the three Philadelphia charter schools founded by Dorothy June Brown, who is under federal indictment, have some new legal headaches.

The Ad Prima Charter School and the Laboratory Charter School have separate tax issues with the city.

A Common Pleas Court judge last week ordered one of Ad Prima's buildings in Frankford sold at sheriff's sale for nonpayment of more than $100,000 in real estate taxes since 2010.

The city also has filed a separate complaint in Common Pleas Court against Brown, alleging that her Laboratory Charter School owes more than $9,000 for failing to file returns and pay city wage taxes for some employees in 2008 to 2010.

An attorney for the boards of both charters said the tax issues would be resolved and contended that Ad Prima, as a nonprofit, was not required to pay real estate taxes.

Laboratory and another charter in Brown's network - Planet Abacus - are seeking to have their operating agreements renewed by the School Reform Commission. Brown and three former charter administrators are facing federal charges that they engaged in a scheme to defraud the charters of $6.7 million and then tried to cover up their actions.

Scot Withers, an attorney with the Lamb McErlane law firm in West Chester that represents the three charter schools Brown founded, said Monday that Ad Prima contends that as a charter school, it is exempt from real estate taxes.

He said the city began proceedings in December to have the property at 3568 Frankford Ave. listed for sheriff's sale, even though the Board of Revision of Taxes has scheduled a hearing for June 27 on Ad Prima's appeal of its tax status.

As nonprofit entities, charter schools typically are not required to pay property taxes.

The order Common Pleas Court Judge Ellen Ceisler signed March 26 said the Frankford Avenue building should be posted and sold at sheriff's sale "without any further advertisements . . . " to satisfy a bill of $104,127 for unpaid real estate taxes for 2010-11, penalties, fees, and interest.

"There is no danger that there are going to be any displaced students," Withers said.

He said he had been told by the city's attorneys that no sheriff's sale could occur until at least July and added that Ad Prima is confident it will have prevailed by then in its appeal to the Board of Revision of Taxes.

Withers said that Ad Prima also would move to present documents to authorities before that time to show that the charter is not subject to property taxes.

The K-8 charter also has an Overbrook campus that is not part of the tax dispute.

Mark McDonald, a spokesman for Mayor Nutter's administration, said the city does not comment on pending litigation.

Ad Prima purchased the former St. Joan of Arc school on Frankford Avenue from the Archdiocese of Philadelphia in July 2010 for $650,000, according to city records.

Withers said the Laboratory Charter School had not yet been served with a copy of the complaint the city's Law Department filed March 12 against it over the wage taxes.

"Once we review it, we will respond," he said. Withers said the court has scheduled an arbitration hearing Nov. 15.

The Laboratory complaint alleges the charter owes the city $9,581 in back taxes and penalties for 2008 to 2010. The Law Department is also seeking a $10,000 fine on the ground that the school violated the city's tax code 144 times by neglecting to file returns and pay wage taxes.

Brown, who founded Laboratory in 1998 and was its chief executive for several years, is named in the complaint as the person responsible for the school.