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New York state law requires charter schools — publicly funded but privately run — to improve student achievement, especially among those "at risk of academic failure." Still, Success Academy, the nonprofit that is the city's biggest charter chain, is opening schools in wealthier neighborhoods like Union Square, where the median household income was $103,198 in 2012, about twice the city median, according to U.S. Census Bureau data.

The evolution of Success Academy illustrates a growing debate nationwide over charters serving higher-income families. California's Bullis Charter School educates children of Silicon Valley entrepreneurs. High Tech High, based in San Diego, has created schools whose students come from diverse economic backgrounds, as do those at Rhode Island's Blackstone Valley Prep Mayoral Academy, said Priscilla Wohlstetter, a research professor at Columbia University's Teachers College.

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As Success Academy opens in more upscale areas, the non- union chain has become a lightning rod for critics including the new mayor of New York, Bill de Blasio, touching off a battle that threatens the growth of Success and the charter movement in the city.

"They're trying to find ways to increase test scores; that's why they go into the wealthier neighborhoods," said Jonathan Westin, executive director of New York Communities for Change, a membership and union-funded nonprofit that advocates for low-income families. "It's a false premise and it gets away from what charter schools were supposed to be used for. Charter schools were supposed to help low-income communities."

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Founded by former city councilwoman Eva Moskowitz in 2006, the Success Academy group has outstripped traditional public schools on standardized tests. In mathematics, it says its schools delivered rates of student proficiency on state tests of 82 percent last year — versus 30 percent for all of New York City. Success gets five applications for every open seat, with students chosen by lottery. Donations from Wall Street hedge funds and others almost doubled last year to $23 million.

Mixing people from different economic backgrounds is essential to meeting her goal of excellence for all, Moskowitz said in an interview in her Harlem office, decorated with children's artwork. "Thousands of kids are now going to failing schools," she said. "It's not as if New York is this high- performing educational system and is using its resources effectively."

The most damaging blows to the charter schools and Success have come from de Blasio, a Democrat who served together on the city council with Moskowitz and took over as mayor in January. De Blasio had previously taken the position that charters with rich donors shouldn't get space from taxpayers without paying.

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In one of the new administration's first actions, de Blasio's schools chancellor Carmen Farina said she would move $210 million of funds that had been earmarked for charter school facilities to the mayor's program to create universal pre- kindergarten.

On Feb. 27, the city's education department said it wouldn't provide space for three of Success Academy's proposed schools after reviewing previously approved expansion plans. No other charter schools among the 17 under review were denied accommodations. Success has appealed the decision to the state board of education.

Parents at one of the Success schools denied space sued the city this month, asking a federal judge to block the de Blasio administration's action. Space can be a make-or-break issue for charter schools in New York, since their public funding doesn't include money to buy or rent facilities.