School to close in 2018
University cites ‘ongoing financial challenges’ after proposed sale fell through
The Santa Fe University of Art and Design will close in the spring of 2018, school administrators said Wednesday in an announcement that ended a year of uncertainty about the school’s future with a disappointing outcome for hundreds of students.
In addition to upending students’ college plans, the decision casts into uncertainty the jobs of about 75 fulltime staff and promises a big change for the 60-acre midtown campus the school leases from the city of Santa Fe, which is still paying off millions of dollars in debt incurred when the municipal government bought the former College of Santa Fe property for use by the for-profit Laureate Education Inc.
The university’s president cited “significant ongoing financial challenges” and declining enrollment in explaining the decision.
Wednesday’s news confirmed what many on campus expected after the privately owned school’s proposed sale to the Singapore-based Raffles Education Corp. fell through last month and administrators stopped accepting new students.
“We’ve been battling this enrollment decline for a few years,” said Maria Puzziferro, the university’s interim president.
The school has seen the number of new students enrolling each year shrink by 15 percent for the past three years, a spokeswoman said.
And the university had racked up a net loss of nearly $7.6 million as of June 2015, according to regulatory filings.
The school is operated by Laureate, which told investors it expects enrollment across its 200 campuses in 25 countries to grow by 2 percent or 3 percent. But analysts have expected the company to seek ways of increasing profit margins, such as by pulling back from campuses that operate at a loss, like the Santa Fe University of Art and Design.
Some students and city officials had hoped the proposed sale, which became public in May, would save the school from closure. But others felt blindsided by the proposal. Raffles’ record with regulators in Asia raised concerns, and the sale stirred criticism that the university’s owners were not acting transparently.
The deal became bogged down amid scrutiny from regulators and The Higher Learning Commission, the school’s accrediting body.
Late last month, the school announced the deal was off.
A message to students Wednesday said the school “is conducting a review and consideration of viable options for the future of SFUAD, with input from students, faculty, community and state leaders, and others.”
But, recognizing this “critical time during the academic year” for students to decide on enrollment, the message said the school’s board decided to announce that it cannot continue to operate after the 2017-18 academic year.
About 170 students who have completed enough courses to finish their degrees by the end of the 2017-18 academic year will be able to graduate from the school. But other students will have to transfer to finish their degrees.
The school has 682 students, according to administrators.
Puzziferro said the school has worked with other colleges and universities to ease transfers, including The University of New Mexico, the Institute of American Indian Arts, Columbia College campuses in Chicago and in Hollywood, Calif., as well as the Rocky Mountain College of Art and Design in Denver.
Unclear is how many employees in Santa Fe will lose their jobs ahead of the next and final school year.
Puzziferro said staffing changes will depend on how many students remain at the school into 2018.
Spokeswoman Rachael Lighty said the school is working with the city government to keep open Garson Studios, which is used for film and television productions, and an on-campus arthouse cinema, The Screen.
“We will continue to operate them during the 2017 – 2018 academic year. From then on, since they are part of the City’s property, and because the film is such an important asset to the City and the state, the City is actively working to ensure continuity,” Lighty said in an email.
The announcement of the planned shutdown comes as city officials seek to boost development along St. Michael’s Drive.
“If we can revitalize that area, the campus is a huge part of that,” said Councilor Ron Trujillo, whose district includes the university.
The school has been a hub of young people in a city that is not known as a magnet for youth. Early in his tenure, Mayor Javier Gonzales sponsored a short-lived initiative to promote nightlife in Santa Fe by offering a free shuttle service between the campus and downtown bars.
The closure could jeopardize rental income that the city uses to pay off the cost of the St. Michael’s Drive real estate, which it purchased in 2009 with proceeds from a bond issue.
University and city officials said they hope to keep the campus a center for the arts and education.
“That’s at the top of the list,” said Councilor Mike Harris, who represents the district that includes the university. He argued that it would be preferable to have another school take over the space.
Buildings on the campus might also be used by different tenants, with no one organization using the whole property, he said.
Whatever comes next, Harris added, “the property itself and the buildings will be in service.”
The school occupies the former campus of the College of Santa Fe, which was run by the Christian Brothers of New Mexico. That college was founded in 1874 as St. Michael’s College and moved into the site on St. Michael’s Drive in 1947.
The College of Santa Fe faced mounting financial troubles about 10 years ago, however, and its board of trustees decided to close the school in 2009.
The city government borrowed nearly $30 million to buy the property, then sold part of it to the state and leased the remainder to the Laureate-backed Santa Fe Higher Education LLC.
The City Council extended the lease last year at an annual price of $2.2 million, which covers the municipal government’s payments for the property. The lease runs through 2035.
The university has been in good standing and has not filed a notice to terminate its lease, according to a spokesman for the city.
“In the meantime we are being proactive, continuing dialogue with the university and other potential partners to discuss next steps for this anchor in the St. Michael’s corridor,” the spokesman, Matt Ross, said in an email.
The mayor did not comment.