Matt Gentry | The Roanoke Times

John Hutson, program director for Tekoa’s Christiansburg boys’ facility, said he sees a bright future because of Camelot’s acquisition of Tekoa. “We’re moving forward,” he said. “There are a lot of great things about Camelot. I would say Camelot cares about young people.”

The Camelot Schools

• Headquarters: Dripping Springs, Texas
• Nationwide: Operates alternative educational programs, day schools and residential treatment centers in Illinois, Pennsylvania, Tennessee, Oklahoma, New Jersey, Kansas and Virginia.
• Business profile: John Harcourt, chief executive officer, presides over the company. Camelot Schools is a portfolio of Charterhouse Group, a middle-market investing company since 1973.
• Web site: camelotforkids.org
• Overview: Students entering Camelot Schools have one or more common characteristics that may include family conflict, low scholastic performance despite high potential, anger and defiance toward authority figures, drug or alcohol experimentation, problems with attention, displaying avoidance throughschool truancy or withdrawal and trouble with self-esteem, depression or general unhappiness.

The established Tekoa group home for troubled youths in the New River Valley is being run by a Texas-based, for-profit company that has quickly expanded its presence in the region.

Camelot of Virginia took over operation of Tekoa's residential and transitions facilities in November, changing Tekoa's management from nonprofit to for-profit status.

The change could pave the way for a major consolidation and a program change that will offer troubled youths a new enrichment opportunity.

Larry Morrisett of Camelot now directs the company's Virginia businesses, which include group homes in Wytheville, Radford and Roanoke, in addition to the three former Tekoa sites: a home for girls in the Pilot section of Floyd County, a boys' facility in the Cambria section of Christiansburg and a transition house for older teen girls in downtown Christiansburg. In September, Camelot also opened a special needs school serving children with disorders such as autism in Pulaski's former Claremont Elementary School.

Morrisett, who joined Camelot in March, said plans are to send all students in the New River Valley facilities to the Pulaski school for classes.

"We will transport them," he said. "Camelot believes in empowerment through education."

Morrisett said he began talking to Tekoa leaders last year about the possibility of taking over the programs.

"They knew we were coming to the area, and they were interested. Our philosophies are really close together," he said, explaining that Camelot has been in the alternative education business for more than 30 years and now has programs in several states. Camelot touts itself as a business "committed to improving the quality of the lives of struggling children and their families" and "providing a safe, structured and nurturing learning environment."

The role of for-profit companies in alternative education is growing. The Philadelphia public schools, for instance, paid more than $40 million last year to private-sector handling of its troubled students, according to an article in the Philadelphia Daily News. Camelot has contracts for some of that work.

Morrisett said the advantage to having Tekoa's treatment facilities managed by a for-profit company boils down to the resources available through Camelot.

"If we are having a finance problem or a medical problem, we have numerous people to call upon," he noted. I don't think that for-profit or not-for-profit is really the issue. It's about what resources folks have and what's at their disposal."

Morrisett said Camelot doesn't plan to make dramatic changes to Tekoa's operation. The only thing that has changed so far, he said, are some administrative process changes.

"We restructured the leadership team and created a clinical services director's position," he noted. "But as far as their daily work, it's not been a huge change."

"I don't think the students should feel any change. The staff that were employed remained in place," said Susan Sink of Community Housing Partners Corporation, Tekoa's parent company.

When it opened in 1994, Tekoa's primary aim was to provide a group home for troubled youths needing a stable environment where they could learn healthier lifestyles and begin to heal from past traumas such as being abandoned or abused. Sink and her husband, Bob, founded Tekoa, which comes from the Greek word for "healing."

Tekoa has been operating residential treatment centers and therapeutic day schools for boys and girls, ages 12 to 18, who have trouble at home, at school or in the community. The youths -- who display a wide variety of behavior problems -- come from all over the New River Valley and are often referred by the juvenile courts, local social service departments or local school systems.

Camelot's philosophy is that there are no "bad" children. Employees focus on delinquent conduct by treating students through behavioral management and modification that emphasizes a positive group culture. Corporal punishment is strictly prohibited by standing rule at Camelot schools.

Sink, who managed Tekoa's facilities with her husband, is vice president of corporate development with CHPC. She said CHPC owns all the real estate holdings of Tekoa so there was no transfer of property when Camelot took over the services.

According to Virginia law, the conversion of a nonprofit business to a for-profit enterprise requires that assets must be transferred to another nonprofit performing a similar function. In this case, the holdings simply remained in the possession of the parent company.

"No one profited from this transaction," Sink said. "We still own the real estate. Camelot will be operating the services and will lease the properties."

With the addition of the Tekoa facilities, Morrisett said Camelot of Virginia will have six group homes and a total of 56 beds for youths in residential treatment. In Virginia, Camelot employs 100 people, he said.

Tekoa, Sink said, has served 50 to 60 adolescents per year in the past. The average stay of a resident is more than a year. The facilities are licensed by Virginia's state departments of social services and education and are Medicaid providers.

Morrisett said Camelot will continue to provide services for Medicaid recipients and that other funding would come through localities. School divisions, for instance, can arrange to pay for a student's attendance through Virginia's Comprehensive Services Act.

Program directors, Morrisett said, will continue to manage the day-to-day operations at each of Tekoa's three facilities. He said Camelot's focus will be on improving communication "with stakeholders who have children in our care."

"We need to look at community relations," he said, noting that he wants to develop closer ties with referral services, professionals and businesses in the community who will be interacting with youths enrolled in programs.

Morrisett said he doesn't know whether Camelot's leadership will have any effect on the high employee turnover rate that Tekoa has had in the past. According to a 2007 Virginia Tech graduate research study, 62 percent of the boys' facility residential staff left in the period from 2004 to 2006 and there was a 42 percent turnover rate from the rest of Tekoa's facilities during that time.

"That can be one of the bigger problems in this line of work," Morrisett explained. "We work with a lot of kids that have been forced to grow up real fast. Unfortunately."

John Hutson, program director for the Christiansburg boys' facility, said he sees a bright future because of Camelot's acquisition.

"We're moving forward," he said. "There are a lot of great things about Camelot. I would say Camelot cares about young people."

Hutson said the expanded network will help with placing students in facilities that fit their needs. Camelot's financial resources are a plus, as well.

"They have more money," Hutson noted. "We're set up so we can help more children than Tekoa was helping. The biggest change for the residents and some of the staff is the new school in Pulaski. Our kids are going there. To them, it seems more like a real school."