S.F. Art Institute does an about face
School invites dozens of students to return
In a dramatic reversal, the San Francisco Art Institute announced Tuesday that it has invited all students within a year of their degrees to reenroll and not be required to transfer or drop out, as had been the draconian ending dictated in late March.
The resumption of degree programs that had already been canceled was made possible by a combination of government pandemic aid, a successful fundraiser, cuts to staff and operations, and an agreement between the Board of Trustees and tenured faculty, reached at a special meeting of the board’s eight voting members on Tuesday.
The agreement staves off the firing of 15 fulltime faculty members and a bitter arbitration battle. But it does not save the jobs of 69 adjunct faculty who were let go at the end of June, though some were kept on through the summer semester.
“When they sent the students away, it was a dire situation,” said Robin Balliger, chapter president of the Faculty Union, a chapter of the American Association of University Professionals. “But there has been an outpouring of support from around the world. We are all working toward keeping the art institute open.”
Letters, written by individual faculty members at the request of the administration, were sent Saturday
soliciting the return of 79 students, many of whom had already transferred to other art schools, mostly California College of the Arts, which has campuses in San Francisco and Oakland.
“We can’t apologize enough for what you’ve been through,” read a portion of one letter forwarded via email to The Chronicle. “As an initial inquiry, might (and I stress might) you consider returning to SFAI to complete your degree with us should classes be extended throughout the 2020/21 academic year.”
All classes will be online. To pay faculty, the board authorized an additional cost of $2.5 million toward its 202021 budget of $9 million. A new fundraising program has also been initiated that will include a firstever online auction of artworks created or collected by alumni, faculty and donors. The goal is to raise $4.5 million.
A tailwind is already there because $4 million has been raised since April 1, when SFAI did not have enough cash to meet payroll and was rumored to be folding altogether, putting an abrupt end to an institution that is scheduled to celebrate its 150th anniversary in 2021. (It is touted as the oldest art school west of Chicago.)
“People realized that something very precious and unique was in serious jeopardy,” said board chair Pam Rorke Levy. “There has been some crying of wolf in the past, but this time everyone realized that they had to step forward now or there would not be another opportunity.”
To find the way forward, a 20member Committee to Reimagine the San Francisco Art Institute has formed, representing tenured faculty, board members, administrators and alumni. The first meetings were last week.
“The best possible outcome would be for the committee to articulate a clear vision that explains to students why they should come here and not to another school,” Rorke Levy said.
That’s an important message to get out because enrollment has dropped from 700 in 2015, to under 300 this past year. One incentive is the tuition, which has been cut in half to $25,000 a year.
“We realized the school was just too expensive for students,” said Rorke Levy.
The new financial model projects decreased dependence on tuition and an increased dependence on fundraising, income from continuing education classes, and the sublet of its graduate campus at Fort Mason Center for Arts & Culture. Space in the Chestnut Street campus may also be available to rent to an arts nonprofit.
The campus on a historic pier at Fort Mason cost $14 million to build out and was used just three years before being abandoned at the end of the spring 2020 semester. It is on a 55year lease at annual rent of $800,000. If the space can be rented for more than that, it will become a financial asset. But it is also a liability.
As first reported by the website Mission Local on July 8, SFAI was notified by Boston Private Bank & Trust Co. that it was foreclosing on a $19 million loan to SFAI for violating the terms of a loan taken out to fund construction and operation of the Fort Mason campus. The loan was secured by the Chestnut Street property.
Representatives of Boston Private declined to comment, but according to SFAI Chief Operating Officer Mark Kushner, SFAI has never missed a monthly payment of around $100,000 on the mortgage. But there is also a $3 million line of credit that must be paid off annually, like a credit card, in order to renew.
“We are in technical default. We have not complied with the loan’s liquidity covenants for months,” Kushner told The Chronicle on Tuesday. “You have to have a certain amount of cash on hand to keep the bank happy. We didn’t have that.”
Kushner said the liquidity requirement had been waived until now so the notice of foreclosure took the SFAI administration by surprise. It was given 90 days to either raise liquidity to the necessary level or pay off the loan balance. Negotiations with First Boston are ongoing, and a team of lawyers has been retained.
Kushner expects that partnership discussions will resume this fall, possibly with a museum or nonprofit. A deal to merge with the University of San Francisco came close until the pandemic hit, but might resume once school starts.
Rorke Levy said that 15 of the 79 students invited to return already have accepted the offer, but it’s still unclear if there will be enough students to hold classes. If the response rate is high, Kushner said there is also the possibility that an additional 100 students who are more than a year from their degrees and have transferred may be invited to return, either for the fall or spring semester.
Tenured faculty will be paid for the year regardless.
One student who received the SFAI letter, rising senior Fredi Lopez, said he would need more reassurance of the viability of the school before accepting. He has already transferred to CCA and placed a deposit of $115, which he says is nonrefundable. Tuition is due Aug. 1. The letter did not mention the tuition drop, but it will be half of what he would pay at CCA.
“That doesn’t change my mind,” he said. “SFAI is trying to win us back, but I think it is too late.”
Sarah Becker, a junior from Miami, shared the same sentiment.
“Why would I return to a school that told me midsemester, amid the pandemic, that I had to transfer?” said Becker. “I really feel emotionally done with them.”
The teaching load formerly borne by the adjunct faculty will now be carried by tenured faculty, though if all 79 students return, there may be some rehiring of adjuncts.
“That’s news to me,” said adjunct faculty union rep Nato Green, a San Francisco comedian. “The board is trying to figure out if it is possible to unshoot yourself in the foot.”