ASU OKs changes to Mex­ico ac­cord

Northwest Arkansas Democrat-Gazette - - FRONT PAGE - AZIZA MUSA

A new agree­ment be­tween Ar­kan­sas State Univer­sity in Jones­boro and its new Mex­ico cam­pus will re­set the length of the part­ner­ship to a decade and give the Ar­kan­sas school a chance to earn more from it.

The Jones­boro univer­sity first signed agree­ments with Mex­i­can en­ti­ties in 2012 and an­other in 2014 with a dif­fer­ent group of in­vestors, said Ar­kan­sas State Univer­sity Sys­tem Pres­i­dent Chuck Welch. But, both of those doc­u­ments were cre­ated at a time when Ar­kan­sas State Univer­sity Cam­pus Quere­taro was still an idea.

“There hadn’t been a shovel of dirt turned. There

hadn’t been any in­vest­ments made in the project. It was still some­thing that we were talk­ing about,” Welch said.

“Now, we are look­ing at an Au­gust or early Septem­ber start date of classes later this year, and so we’ve moved from a con­cep­tual stage to an ac­tive-cam­pus stage, and with that came the ne­ces­sity of a re­vised agree­ment that re­ally ad­dressed a whole litany of other is­sues that weren’t nec­es­sary when it was a con­cept but are now nec­es­sary when it’s an ac­tive cam­pus,” he said.

“You know, some­one de­scribed to me: We went from an idea on pa­per to now an in­vest­ment by our part­ners in Mex­ico of $100 mil­lion or 2 bil­lion — with ab — pesos.”

Inve s tors with the ASU-Cam­pus Quere­taro pri­vate foun­da­tion, led by Ri­cardo Gonzalez, are pay­ing for the project. ASU has said no state money has gone to­ward the Mex­i­can cam­pus.

With the project, ASU will be the first univer­sity in the state — if not the na­tion — to un­der­take a pub­lic-pri­vate part­ner­ship to build a cam­pus abroad, said Brad Rawl­ins, vice rec­tor of aca­demics at Cam­pus Quere­taro. The Univer­sity of Ar­kan­sas has a Rome Cen­ter for study-abroad and ex­change stu­dents, but it is not a full-fledged cam­pus.

Cam­pus Quere­taro sits on 370 acres and in­cludes 800,000 square feet of aca­demic and res­i­den­tial build­ings — for stu­dents and fac­ulty mem­bers. Other de­vel­op­ments will sur­round it.

The cam­pus is to open ei­ther Aug. 28 or Sept. 4 this year, Welch said. Cam­pus Quere­taro has started tak­ing ap­pli­ca­tions and has even started ac­cept­ing some stu­dents, Rawl­ins said.

At the start, the Mex­ico cam­pus will of­fer its in­au­gu­ral stu­dents gen­eral ed­u­ca­tion and in­tro­duc­tory cour­ses. The classes taught in English are part of the ASU cur­ricu­lum. Up­per­class­men in Jones­boro are un­likely to get a chance to ex­pe­ri­ence the cam­pus, though all of the Jones­boro cam­pus’s 14,085 stu­dents may be able to take ad­van­tage of a study-abroad pro­gram there, which is still in the works, Rawl­ins said.

As the cam­pus grows and more classes are added, Ar­kan­sas stu­dents and fac­ulty mem­bers could then take part in ex­change pro­grams, he said.

The new agree­ment lays out specifics on the fi­nan­cial ar­range­ment, term ex­ten­sions, ter­mi­na­tion clauses and dis­pute res­o­lu­tions. It spells out that the Mex­i­can part­ners are in charge of all op­er­at­ing costs, while ASU leads aca­demics.

It was unan­i­mously ap­proved Fri­day at an ASU Sys­tem board of trus­tees meet­ing in Moun­tain Home, with Trus­tee Stacy Craw­ford ab­sent. The vote came af­ter a draft was pre­sented to board

mem­bers the night be­fore, giv­ing them an op­por­tu­nity to ask ques­tions on the mat­ter.

Un­der the new con­tract, the part­ner­ship be­tween the two cam­puses re­sets to 10 years at the start of the school year. Had the schools main­tained the 2014 agree­ment, they al­ready would be three years in, Welch said.

The Mex­ico cam­pus also would have paid ASU based on en­roll­ment fig­ures for just 10 years, un­der the old agree­ment. Now, the fi­nan­cial agree­ment is more com­mis­sion-based — based on the amount of money col­lected from en­roll­ment — and adds into ac­count in­fla­tion­ary fac­tors and can last longer than a decade.

If en­roll­ment goes as planned, ASU could stand to earn $140.6 mil­lion over 20 years from the part­ner­ship, ac­cord­ing to the con­tract. The Jones­boro school could earn even more as those cal­cu­la­tions in­cluded flat en­roll­ment for the fi­nal 10 years.

The con­tract also calls for two au­to­matic five-year ex­ten­sions should the Mex­ico cam­pus meet the en­roll­ment — and sub­se­quently, the fi­nan­cial — fig­ures.

“With au­to­matic ex­ten­sions, does this be­come a 20-year ini­tial term?” Trus­tee Niel Crow­son of Jones­boro asked Thurs­day.

If the cam­pus met the fi­nan­cial tar­gets, it would, said Brad Phelps, the sys­tem’s gen­eral coun­sel.

Board mem­bers then asked what would hap­pen to the ex­ten­sions if the cam­pus did not meet the fi­nan­cial tar­gets cu­mu­la­tively or if it fell short one year but could re­pay the next.

The cam­pus would need to meet the fi­nan­cial tar­gets through the fourth year — no money in year one, $149,828 in the sec­ond year, $617,291 in its third year and $1,390,834 in the fourth year — to trig­ger the first, five-year au­to­matic ex­ten­sion, said Fer­nando Cano-Lasa, a hired ex­ter­nal at­tor­ney with the law firm Squire Patton Boggs.

The cam­pus would then need to meet the fi­nan­cial tar­gets in the fifth and sixth years — $2,483,102 and $3,920,709, re­spec­tively — to au­to­mat­i­cally trig­ger the sec­ond ex­ten­sion, he said.

“This is a fi­nan­cial com­mit­ment, so the fi­nan­cial com­mit­ment is an obli­ga­tion of agree­ment whether it is ex­tended or not,” Cano-Lasa said. “That means that if they don’t reach those lev­els, they are in breach of the agree­ment, and we can ter­mi­nate the agree­ment or we can en­force the agree­ment or we can make them pay for what they com­mit­ted to pay.”

Welch said ASU’s part­ners have been ap­proached by other U.S. uni­ver­si­ties who have said they could run the Mex­ico cam­pus with a lesser mon­e­tary charge than Jones­boro.

“If it’s work­ing well, then it gives us a much longer term of be­ing there than what we would have had pre­vi­ously,” Welch said. “You’ve got to

look at it at a cou­ple of dif­fer­ent sides.”

Welch also went over the dif­fer­ent rea­sons ei­ther party could end the agree­ment, which in­cluded fail­ure to make timely pay­ments to ASU, any gov­ern­men­tal rul­ing that could af­fect cam­pus op­er­a­tions or the pay­ments to ASU and any crim­i­nal acts.

If an of­fi­cer or part­ner com­mit­ted a crime, ASU could ter­mi­nate the con­tract au­to­mat­i­cally, but if an em­ployee had done so, the Jones­boro school would give its part­ners an op­por­tu­nity to rem­edy the sit­u­a­tion, Welch said.

Trus­tee Price Gard­ner of Roland wanted clar­i­fi­ca­tion on the or­ga­ni­za­tional struc­ture in Mex­ico.

“Who owns it? Is it solely Ri­cardo? What hap­pens if he were to pass away? What hap­pens if there were a change of con­trol?” Gard­ner asked. “We have got­ten com­fort­able with these peo­ple as our part­ners, but if these peo­ple are not our part­ners and none of these events trig­ger, have you all had dis­cus­sions with them about that?”

Phelps and Cano-Lasa had dis­cussed the mat­ter pri­vately, but not with the part­ners.

“I have the same con­cern be­cause we’re many. He’s one,” Crow­son, the trus­tee, said. “When you look at it like that, if some­thing were to hap­pen in his world — maybe he ex­its pre­ma­turely — what hap­pens if this is one of his many en­ti­ties? While it’s a lot of money to us, it may not be a lot of money to him. If some­thing were to hap­pen to him, is there any en­dow­ment, life in­sur­ance, or what­ever to per­pet­u­ate this? I have those con­cerns.”

At­tor­neys added in a clause in the con­tract late Thurs­day that re­quires Welch to pro­vide writ­ten con­sent of any change of con­trol at the Mex­ico cam­pus.

Welch added Thurs­day that the univer­sity is not li­able for any debts in­curred by the pri­vate foun­da­tion.

The con­tract also states that dis­putes will be han­dled through a me­di­a­tor un­der In­ter­na­tional Cham­ber of Com­merce rules in Hous­ton. The ar­bi­tra­tion would be in both English and Span­ish.

The new agree­ment comes on the heels of a trip that sys­tem of­fi­cials, Craw­ford and Gard­ner took to Quere­taro to tour the cam­pus. They saw some 300 cam­eras on the cam­pus, con­trolled ac­cess into build­ings and other tech­nolo­gies such as voice recog­ni­tion and fin­ger­print­ing be­ing used.

“You can read about it. You can look at video and re­ally get a feel for it,” Gard­ner said at Fri­day’s meet­ing. “But re­ally the op­por­tu­nity to go down there and spend two days has been of tremen­dous value to me.”

He said he had a greater ap­pre­ci­a­tion for all the work un­der­taken.

“So not only was I al­lowed the op­por­tu­nity to see the phys­i­cal plant but also all of the data and the study be­hind it, not only about the need but then learn­ing more about the in­dus­tries there and what this is go­ing to do not only within our coun­try but the ben­e­fits to our univer­sity,” he said.

On Fri­day, Gonzalez, the pri­mary in­vestor, and Ed­mundo Or­tiz, the cam­pus’s ex­ec­u­tive di­rec­tor, spoke be­fore the trus­tees, thank­ing them for the op­por­tu­nity.

“It’s not an agree­ment,” Or­tiz said in a later in­ter­view. “It’s a mar­riage. You have to share the same vi­sion and build it to­gether, and that’s the best way to do it with — with love, with trust, with com­mit­ment.”

Gonzalez, who be­came emo­tional talk­ing to the board about the project, later said he wanted to be part of some­thing that would help gen­er­a­tions of peo­ple when he’s no longer around.

Cam­pus Quere­taro has re­ceived in­quiries and ap­pli­ca­tions from about 4,228 peo­ple, Welch said. Of those, most are from Mex­ico, but about 10 per­cent are stu­dents from the United States, in­clud­ing Texas, Cal­i­for­nia and Ar­kan­sas, said Rawl­ins, the cam­pus vice rec­tor.

Quere­taro also is home to about 4,000 in­dus­tries, more than a fourth of which are multi­na­tional, ASU of­fi­cials have said. Those com­pa­nies could open the door for more in­tern­ships for ASU stu­dents in Mex­ico and Jones­boro.

For Or­tiz, the part­ner­ship was more than eco­nomic: it is some­thing that he said could bring hope and a dif­fer­ent vi­sion of the fu­ture for Mex­i­cans.

For Gonzalez, the most im­por­tant goal is to ex­pand ed­u­ca­tional op­por­tu­ni­ties in Mex­ico.

“The most im­por­tant is just to step up the game for ed­u­ca­tion in Mex­ico and show to Mex­ico that we can have an ed­u­ca­tion that’s in the U.S. and def­i­nitely this will bring a lot of learn­ing and hope­fully sup­ply to other uni­ver­si­ties or other projects that are made in Mex­ico or even world­wide,” he said.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.