Indiana Charter School Board denied charters Friday for three Indianapolis turnaround schools — a stunning move that could spell the end to the Florida-based Charter Schools USA’s operations in Indianapolis.

As a result, the three Indianapolis schools — Howe High School, Manual High School, and Emma Donnan Middle School — face the prospect of another rocky transition to new management, or even possible closure.

But the board’s 4-3 votes against the charters, which elicited gasps from the audience, marked a major victory for Indianapolis Public Schools, which could win back the three schools that have been under state takeover since 2011. (Two members of the charter board were not present for the vote.)

The next step lies with the Indiana State Board of Education, which is now expected in January to revisit the question of what should happen to the schools as they exit state takeover at the end of the current school year. IPS will make its case for bringing the schools back under its umbrella. 

Charter Schools USA officials declined to comment after the meeting. Misty Ndiritu, the state director of Noble Education Initiative, a nonprofit with ties to Charter Schools USA that is the day-to-day operator of the company’s Indiana campuses, said in an emailed statement, “Clearly, we are extremely disappointed in the narrow 3-4 vote today. We will continue to work with the thousands of educational stakeholders who have routinely articulated they want to stay on the current path of success at each school under our leadership and local partnerships.”

The charter requests were an unprecedented attempt to sever permanently the state-controlled schools from the district. But in IPS’s late efforts to reclaim the schools, district officials raised financial concerns over the complications of managing the debts on the three district buildings, were they to become charter schools. In the end, those concerns proved to be one of the critical issues leading to the charter denials.

Charter board members also said they were uncertain whether the schools would be able to meet lofty enrollment goals, key to their financial viability, and whether academic progress could be sustained without the extra funds that the schools received under state takeover.

“I was worried about some of the issues with the management. I was worried about the enrollment and the finances,” said Jill Robinson Kramer, vice chair of the state’s charter board. “It was definitely ambitious without very detailed plans.”

After about three hours of discussion, the charter board voted against its staff’s recommendation to grant three-year charters to all three schools.

The recommendation, however, came with some asterisks. The board’s staff suggested a short term in order to monitor closely the transition and highlighted the high number of students leaving the two high schools without diplomas, a problem revealed by a recent Chalkbeat investigation. The schools recorded few dropouts but some of the highest proportions in the state of students leaving to home-school, a designation that doesn’t factor into graduation rates. 

Emma Donnan Elementary and Middle School had perhaps the best shot at a charter, having shown significant academic growth under Charter Schools USA’s management. With the manager’s addition of elementary grades, Emma Donnan raised its consecutive F grades under IPS to a C. The elementary school posts high reading scores and largely surpasses district schools on standardized tests.

Charter Schools USA leader Jon Hage noted that those improvements came despite the politics surrounding state takeover. “We persisted through this environment,” he said, adding, “The community has also strongly backed us throughout this process.”

The charter applications, though controversial, had hundreds of people — including students, families, community members, and alumni — supporting the efforts, signing petitions and  writing letters backing Charter Schools USA’s leadership. 

Ndiritu, of Noble Education Initiative, stressed the operator’s local ties. “You hear all the time, ‘Florida, Florida, Florida,’” she said at the meeting. “We are from Indiana. We work in Indiana schools. … We are making decisions here.”

But the charter board also focused on the uncertainty of whether the schools would be able to execute the visions laid out in the charter applications because of the transition out of state takeover. IPS recently ended its innovation partnership with Emma Donnan, citing declining enrollment and high staff turnover.

“That’s some shaky ground,” said charter board member Leslie Dillon. “I keep hearing that, ‘I think, I think, I think.’”

The rejection of Emma Donnan’s charter application set a grim tone for supporters for the discussions over Manual and Howe, which were shorter and ended with votes falling along the same lines. The conference room at Government Center was packed with about 75 people, including many from the three school communities and top IPS officials. Those who supported the charters at times grumbled, cried, or called out over critical questions from the board.

While IPS has outlined a plan to find a charter operator for Emma Donnan and hand operations of Manual to influential local charter network Christel House Academies, a shadow looms over Howe. IPS officials have not revealed a plan for the high school, which has struggled the most out of the three turnaround campuses, and the district has not ruled out closing Howe. 

“IPS is committed to addressing the individual needs of each school, and the return of Emma Donnan, Emmerich Manual and Thomas Carr Howe to the district will allow continued expansion of sustainable choice options for all students,” the district said in an emailed statement.

The three outnumbered board members who voted in favor of the charters said they wanted to avoid more turmoil for students and families, particularly by avoiding potential closures. They believed continuing operations as charter schools would be the smoothest possible transition.

“I’m a longtime school choice [and] charter school supporter, and I would tend to vote on the side of a parent or a student who says, ‘I love my school,’” said charter board Chairwoman Kim Preston. “That would have been a good step toward stabilizing communities and giving them faith that their schools are going to exist in a couple of years.”

(Preston also briefly served on the board of ReThink Forward Indiana, the nonprofit that would have held the charters since Indiana law prohibits for-profit operators, like Charter Schools USA, from being granted charters.)

Dillon — who voted against the proposals — urged the community to unite, even amid palpable disappointment over charter rejections. She told them that the vote didn’t dictate what the outcomes would be for their students.

“This is not the final say for your babies,” she said.