Charter school has touters, doubters.(Edison Schools Inc.'s Vahan H. Gureghian)

Byline: Connie Langland and Dale Mezzaca

Aug. 25--Educating the children of Chester Upland has proved to be a financial disaster for nearly everyone who has tried in the last decade: the district itself, two charter school operators, and the nation's largest for-profit education company, Edison Schools Inc.

Not for Main Line lawyer and businessman Vahan H. Gureghian, who has turned Chester Community Charter School into a profitable, expanding business in the heart of the virtually bankrupt school district. Chester Community has grown from 100 students in 1999 to one of the largest charter schools in the country. Next month, it expects an enrollment of 1,900 - attracting one-third of Chester Upland's elementary students.

Gureghian, 50, describes his enterprise as "the miracle on Fifth Street." He cites test scores that have outpaced those in the district, which remain among the lowest in the state. "Parents send their students to our school because we do a much better job than the school district has ever done," Gureghian said in an interview.

But not everybody is celebrating. At a meeting Tuesday, a group of residents asked the district's Board of Control to investigate the school's finances and questioned why the school was operating without oversight.

Their questions provide a look into the booming world of charter schools, exposing local and national divisions over how closely they should be regulated.

The operation under Gureghian's management also raises questions about the place of profit in the burgeoning charter school sector and whether financial arrangements involving taxpayer dollars can remain hidden from the public.

Since 1999, Chester Community has paid Gureghian and his company about $10 million in tax dollars to manage the school and about $5 million in rent for use of the school buildings, according to state and federal documents.

The payment terms are detailed in a 20-year contract between Gureghian's firm, Charter School Management Inc., and the school's board of trustees. Both have refused to make that contract public and have gone to court to argue that charter schools are not subject to the state's Right to Know law.

Of the 95 charter schools in Pennsylvania reporting to the state, Chester Community is the…