Ophir Sternberg, a Miami-based real estate mogul who immigrated to the United States from Israel in 1993, proudly touts in his corporate biography that he founded and generously contributes to a charter school in Peterborough, New Hampshire.

Sternberg is less open about the fact that he also serves as Lionheart Classical Academy’s landlord, charging over $50,000 per month in rent this year, according to lease documents.

The dual relationship as both landlord and founder traces back to the summer of 2021, when Sternberg pledged $1 million – $100,000 annually for 10 years – in exchange for a 15-year lease on his building and naming rights to the new school, which teaches a “classical” curriculum created by a conservative college in Michigan. (Sternberg’s investment firm is called Lionheart Capital.)

But while Sternberg has earned at least $700,000 in rent and as the school board has put in millions of dollars of work to transform the building from offices and unfinished space to classrooms, the Florida investor has made payments in just one of the three years. So far, Sternberg has contributed $100,000, he said in an interview, rather than the $300,000 anticipated. A contribution of $1 million in stocks in a company he owned that was made in lieu of subsequent monetary contributions in late 2022 lost nearly all its value months later.

Sternberg has committed to fulfilling his pledge, but as the 300-student school’s third year gets underway, some members of the community have begun to publicly scrutinize the board’s relationship with the businessman.

Fred Ward, another school founder and the husband of state Sen. Ruth Ward, last week asked the state Board of Education to put Lionheart on probation due to what he perceives as a conflict of interest between Sternberg and founding board chair Barry Tanner, who was solely responsible for brokering the 2021 deal with Sternberg.

Sternberg denied the claims, telling the Monitor that “absolutely no conflict” existed. He pledged $1 million to the school because it was “a good cause to donate to” and took a financial risk by signing a lease before the school had received approval from the state, he said.

Tanner declined to comment.

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Regardless, the school’s connections to the wealthy out-of-state investor highlight the complicated dynamics surrounding charter school funding, as well as the ways business and philanthropy can become intertwined.

Charter schools, which are public, receive per-pupil state funding, but typically not enough to fully cover their expenses. Therefore, they often rely on private donations to fund their operations. Whereas at a district public school, the source of gifts is generally required to be publicly disclosed, at charter schools, the policies vary and are often more lax. Lionheart board chair Kimberly Lavallee said in an interview that the school’s attorney, Robert Best, has told the board it may keep the source of donations confidential, which the school has generally elected to do.

Best did not respond to a request for comment.

Last year, the school received nearly $1 million in donations, which is approximately 28% of this year’s $3.5 million school budget, according to financial documents prepared by Lionheart. Of the 64 donations received, six were for $50,000 or more.

Last week, the board announced that it had received a new $5 million pledge from a donor who the school has also declined to identify.

“Secrecy has been their mantra,” said Ward, 94, who said he has lost trust in the current board members.

As charter schools have exploded in recent years, interest in where state and federal money earmarked for the schools is spent has also increased. Lionheart is one of 22 charter schools that has received a portion of a $46 million federal grant awarded to New Hampshire in 2019. In addition to the $1.5 million received via the grant, the school also receives approximately $9,000 per student and $30,000 to $40,000 in rental assistance from the state annually.

The mounting questions in Peterborough come the same week as the founder of another now-shuttered charter school, Capital City in Concord, pleaded guilty to stealing over $73,000 in federal money for the school, which she spent on gambling, dining and travel.

Sternberg, 54, grew up in Israel and served three years in an elite combat unit of the Israeli Defense Forces before beginning a career in New York real estate in the 1990s, according to an SEC prospectus.

In 2010, he founded Lionheart Capital, a firm that invests in real estate and companies across the country, from the Ritz-Carlton in Palm Beach to the restaurant brand Anthony’s Coal Fired Pizza.

Since founding his firm, Sternberg has made high-profile headlines. In 2021, he brokered a $33 billion deal with a prominent Miami lawyer, which Bloomberg described “as one of the most unusual [special purpose acquisition company] transactions yet.” This spring, he resigned as chairman of the publicly-traded fast food brand BurgerFi at around the time the company defaulted on its credit agreement, the publication Restaurant Business reported.

Peterborough might seem an odd place for a high-flying businessman to expand his portfolio, but Sternberg said he and his wife were drawn to the area in 2017 because of a world-class equestrian facility up for sale, which the couple purchased via a real estate LLC for $2.9 million, property records show.

As his family spent time at their new home during holidays and summer vacations, Sternberg said he began to look for commercial properties in the area to buy. He said he now owns “a handful” of properties in Peterborough, a couple of which he is in the process of developing into housing, planning board records show. Representatives presented plans for a 53-home Equestrian Village on his equestrian property in January and for a 116-unit housing development last November.

Sternberg purchased the 57,000-square-foot building that would become the home of Lionheart Classical Academy from the educational services company SDE, Inc. in November 2020 for $900,000, according to property records.

Months later, Sternberg said his leasing broker introduced him to Barry Tanner, a businessman in the healthcare sector from Hancock and the leader of the charter school’s founding organization, Monadnock Freedom to Learn Coalition.

“When Barry expressed strong interest in leasing the space for the school, he told me about the mission of the school and what it represented, and I thought it was really interesting,” Sternberg said. “He also told me that they’re in capital-raising mode.”

That July, Sternberg and Tanner signed a pair of agreements that locked the charter school into a lease until 2037 and gave Sternberg the rights to the school’s name in exchange for an annual $100,000 pledge for the next 10 years. Sternberg said “the naming rights were offered to me because they loved the name Lionheart” and that he wasn’t paying to promote his brand via the school.

As Sternberg and Tanner negotiated, Ward said that he and the other four members of the founding group – Augusta Petrone, Leo Plante, Richard Merkt, and Kerry Bedard – were locked out.

“We were not really supposed to speak to” Sternberg, Ward said Tanner told them. Nor were they allowed to look for alternative buildings, Ward said.

The two men – Ward and Sternberg – have met only once, at an event for the school.

Two months after Sternberg and Tanner finalized their agreement, but before Lionheart’s charter was approved by the state, a historic inn in Hancock went up for sale.

Sternberg said he called Tanner to get his opinion on the property because it was in his hometown.

“He was very familiar with the property, told me about it, and we then decided to make a joint offer for the property,” Sternberg said.

The $970,000 offer, which was technically made by the Lionheart Acquisition Group and signed by Sternberg, was rejected, Sternberg said. The owners of the Hancock Inn ultimately sold the property for $1.15 million to a Boston investor group.

Rick Lehmann, an attorney for Ward, wrote to State Board of Education Chair Drew Cline that “any business relationship between Tanner and Sternberg should have been disclosed,” citing a state law that governs board members who are also involved in for-profit relationships with providers of services to the school.

Sternberg said there was no conflict or disclosure requirement both because the offer was not accepted and because it was made after the lease and pledge agreement had been finalized.

Had the deal gone through, Sternberg said Tanner might have been expected to disclose the business partnership to the rest of the school board, but that he wasn’t sure.

Cline did not respond to a request for comment.

Despite the Hancock Inn deal not working out, Tanner and Sternberg still had two other relationships to move forward on together: that of donor-benefactor on the one hand and landlord-tenant on the other.

In late December of 2022, Sternberg made his first $100,000 contribution, according a letter from him to Tanner. At the same time, Sternberg and Tanner agreed that they would diverge from the initial agreement and Sternberg would donate the equivalent of $1 million in stock in a special purpose acquisition company, or SPAC, he owned called Lionheart III Corp.

Importantly, Sternberg committed to make up the difference if the value of the stocks dropped below the $900,000 more he owed under the initial agreement by the time they could be liquidated in late 2023.

“My only point of giving some stock in lieu of cash was to get the school funded earlier than having to wait for a full 10 years,” Sternberg said.

Three months after the stock gift, Lionheart III Corp merged with a technology company called SMX, and the charter school’s stocks lost nearly all their value – a downfall that Sternberg insists he had no way of predicting ahead of time.

Though he said he remains committed to contributing another $900,000 to the school, he has not made a donation since 2022. Other founders have donated far more, said Ward, who has contributed around $700,000.

Lavellee, a veteran of charter school governance across the state who became Lionheart’s board chair this summer, said that the school’s finances have been able to sustain the gap in contributions from Sternberg.

“You always want to receive additional funds, especially when you’re planning for them,” she said. “However, Lionheart has been very fortunate to have strong benefactors who continue to support the school.”

Both Lavallee and Sternberg indicated that they are in the process of negotiating a new agreement that might involve a change in rent.

“We are in talks about the lease and the plan we have to make the school whole on the remaining funds,” Lavallee said. “How that happens and where we’re at on that, I can’t really get into at this point.”

In perhaps an indication of an upcoming rent reduction, a lease amendment brokered between Tanner and Sternberg in 2023 states Lionheart is expected to pay at least $610,000 in base rent this school year, but the school has allocated just $429,000 to the expense in its budget.

The rent itself on Sternberg’s building off of Route 202 has been another area of concern.

When Sternberg bought the 57,000-square-foot property, the building was composed of both offices and a dirt-floor warehouse-style section. The school has since put $1.8 million worth of renovations into the building to turn it into a school, double the value of what Sternberg purchased it for, according to the property record card.

For the first 11 months of the lease, before the school opened, Sternberg gave it to the founding group virtually rent-free, which he characterized as another gesture of goodwill.

During the school’s first year, it paid roughly $460,000 in rent and other building expenses for about 26,000 square feet of space, while last year, the school paid about $540,000 for 36,000 square feet, according to budgets from both years. The budget for this year indicates the school anticipates paying $630,000 for 50,000 square feet.

The figures are challenging to compare to market rate in the area, in part because the building was made up of a mixture of office and industrial space.

Brian Dano, the managing director of the real estate firm SVN The Masiello Group, has represented both commercial buyers and sellers in Peterborough but was not involved in the negotiations between Tanner and Sternberg. He reviewed the lease agreement and rent schedule and said that nothing jumped out at him.

“I wouldn’t say this is an unfair document,” Dano said. “This seems pretty normal. I don’t see anything that’s outrageous.”

Dano did note, however, that it appeared the group of founders was unrepresented in the lease deal, whereas Sternberg had a broker. He said this was not particularly unusual for a deal of this nature in the region.

But, he said, “there’s stuff they could have negotiated out, but probably didn’t know any better.”

Ward, Sternberg and Lavallee all agree that Lionheart provides an excellent “classical” education that focuses on what Ward describes as the “fundamentals” rather than the frills. They also all say they have the same objective: to ensure the school can stay open as it expands from K-7 to K-12 over the next five years.

“We all want the school to succeed, and most of us are willing to do almost anything to make it succeed,” Ward said.

Though the school spends less per pupil on educational expenses than the $9,000 it gets from the state, according to an audit, additional expenses, particularly for transforming the building as the school grows, require outside funding.

Last week, the school board, which no longer contains any of the original founders, announced it had received a $5 million pledge, payable in $200,000 increments over the next 20 years.

Meanwhile, the board said it was continuing to negotiate with Sternberg on the lease with an update expected in October, according to meeting minutes.

Lavallee said the school was in a strong financial position prior to the $5 million pledge but that the new gift strengthens it.

Ward says he has learned to be skeptical.

“If this money is the real money that we think it is and what they claim it is, and the building and its solution is what they claim it is, we will be delighted,” he said.

But he wants to see the conditions behind the donation before rejoicing.

“We’ve been disappointed so many times in the past that we’re a little bit cynical,” Ward said. “We’re happy if what [the board is] saying is true – we are happier than anybody and we want to help if we can – but [they] need to tell us what the deal is.”

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>italic<  Jeremy Margolis can be   contacted at jmargolis@  cmonitor.com.>res<

>italic<Editor’s note: Due to inaccurate information provided by the Peterborough assessor’s office, a previous version of this story had an incorrect purchase price for the personal home of Ophir Sternberg. This story has been updated to reflect the correct price.>res<