‘A PERFECT STORM OF FAILURES’
Mount Ida woes revealed as execs dodge pols
Lawmakers angry that Mount Ida College bigwigs ducked an oversight hearing into the Newton school’s abrupt closure threatened to subpoena their testimonies on the controversial deal with the University of Massachusetts Amherst that the board chairwoman called the result of a “perfect storm of failures.”
The Senate Committee on Post Audit and Oversight sent multiple invitations to Mount Ida President Barry Brown to hear his testimony. He declined to accept. Instead, the college said it would send its finance chief Jason Potts. But Potts told the committee yesterday morning he also wouldn’t attend.
Chairwoman Sen. Kathleen O’Connor Ives called the college execs’ avoidance “very, very disappointing” and threatened to force them into the hot seat.
“The committee will deliberate as to issuing subpoenas to both President Brown and CFO Potts,” O’Connor Ives said, “because we can always schedule a second hearing.”
A Mount Ida spokeswoman declined comment on the subpoena threat for Brown and Potts and said that Brown couldn’t attend due to a medical appointment.
The hearing, which stretched into the afternoon, included stories from students and families whose college plans were thrown into chaos by the hurried deal. The college also provided the most detailed account to date of the financial mess that precipitated Mount Ida’s push to merge with nearby Lasell College, and then when that agreement fell through, the $86 million deal with UMass Amherst.
Mount Ida Board of Trustees Chairwoman Carmin Reiss — who was scheduled to appear alongside Potts and Brown — detailed how the college’s mounting challenges led to the UMass Amherst deal.
“We had a perfect storm of failures,” Reiss told the committee.
A strategic “turnaround plan” to help the struggling college was in place when Reiss arrived on the scene in 2014, she said, and it was pointing in the right direction. The college tackled $30 million in building safety and maintenance issues, but the costs ended up being much higher than expected. The college sought to sell land to pay off yearly shortfalls, but that plan failed. It looked to raise money by selling campus buildings then leasing them back, but that failed, too. Half of Mount Ida’s freshmen class in 2012 didn’t return for a sophomore year — a retention failure that weighed on the college’s finances for the next three years.
During all these efforts, the college was exploring a merger with other colleges, including Lasell. The colleges reached an understanding and pushed to finalize the deal, but when Lasell made its last-and-final offer, it didn’t describe a merger, Reiss said. Instead, the consolidation would have saddled Mount Ida with debt — a prescription for failure as far as the Mount Ida board was concerned. If the college was going under, Reiss said, the board wanted a say on how its students and staff were treated.
Mount Ida contacted UMass Amherst and struck a deal to sell the land and buildings for $75 million in cash with one of Mount Ida’s lenders offering to forgive $11.5 million.
Reiss bristled at a suggestion by Sen. Dean A. Tran that the college deceived students by announcing the deal only after it was signed.
“Did we go out and announce, ‘Hello interested students. We are teetering on the brink of insolvency, but come on in?’ No, we did not do that,” Reiss said. “I certainly reject the notion we are deceptive. We made all public disclosures we needed to make.”