Notre Dame College: ‘No pathway’ to keep school open
SOUTH EUCLID — Days after South Euclid City Council announced it will arrange a public meeting so that the community can get answers about the closing of Notre Dame College and its plans for the campus once the school closes, NDC has released a statement affirm- ing its intention to close.
South Euclid Council Pres- ident Ruth Gray decided to schedule a public meeting at April 9’s council meeting. She did so after Councilman Justin Tisdale, a Notre Dame College graduate, said that, while not accusing anyone, he wanted to know more about whether the college’s board of directors and leadership had fully looked into the possibility of a benefac- tor group helping pay off the college’s debt.
The college is slated to close at the end of the cur- rent spring semester.
Tisdale has been in com- munication with, among other alumni and interested NDC supporters, Peter Corri- gan, a business professor at
NDC, who said that the college owes just over $14 million, and that a benefactor group had collected a good portion of that amount from its donors.
Corrigan believes that if the NDC Board of Directors gives authorization for the benefactor group to act on the college’s behalf, there is a possibility that Bank of America may be willing to negotiate a deal to accept less than the $14 million.
In its release Thursday, NDC stated that the debt is actually $25 million, and that even if the full $25 mil- lion were to be paid, needed funding would not likely be available thereafter to keep the college from again falling into debt.
Also, alumni and others hoping to keep NDC from closing have wondered why the college’s board has not allowed the benefactor group to negotiate on the college’s behalf, as it wishes to do. The NDC release stated that the group has, indeed, met with Bank of America.
“We appreciate the tre- mendous outpouring of sup- port for Notre Dame College
and our students as we pre- pare to end academic instruc- tion,” the NDC release states, “including the efforts of a dedicated group of stakeholders (the benefactor group) who have offered to raise significant amounts of money in an effort to keep the school open.
“The stakeholders met with Bank of America on Feb. 28, and their verbal pro- posal was not accepted by
the bank because it did not satisfy the debt, nor did it provide a sustainable finan- cial plan for the college.”
“In reality,” the statement continued, “a minimum of $25 million is needed to pay outstanding debt with Bank of America, to pay other creditors and to meet gen- eral operating obligations.
“That sum of money, how- ever, gets us past the current crisis and would not guarantee that the school would be able to remain open in the future.
“After years of efforts, no pathway remains for Notre Dame College to stay open after this school year. We remain focused on support- ing our students through this time of transition.”
Corrigan, however, said that while the benefactor group met with Bank of America in February, the NDC Board had not given the benefactors authoriza- tion to negotiate a deal on the board’s behalf. The bene- factor group is made up of people who have donated to NDC for 30 years.
Corrigan said Friday that NDC owes perhaps as much as $14.7 million on a $20 million bond taken out in 2008. It is this remaining amount which the benefactor group would seek to retire, if given autho- rization to do so, he said.
“They’re (in NDC’S state- ment) going up to $25 mil- lion (in stated debt),” he said. “That’s to meet other obli- gations, to meet accounts payable, deferred mainte- nance. They’re basically say- ing, ‘We need this money to run the college.’ It’s different from debt.
“If you’re running the college, you’re bringing in tuition and some other things. So they’re looking at this and saying, ‘We can’t do this.’ And that’s their opinion.
“But the benefactors have stepped up to try and take out the $14.5-million loan, which would include the scale-ups — a prepayment penalty and some other things. Now, if (the benefactor group) were to negotiate with the bank and settle the note, it’s pretty unlikely we’d pay the prepayment penalty, which is a couple million dollars.
“The benefactors have hired a couple of negotiators and they met with the bank on the 28th (of February),” Corrigan said. “They’re (the college) right about that. But they did not have the authorization to represent the school for an offering compromise.
Notre Dame College was founded in Cleveland and moved to a 48-acre campus off South Green Road in South Euclid, where classes began in