Future of arts college in doubt after sale halted
Santa Fe University of Art and Design won’t accept new students and could close, though interim president says not immediately
The Santa Fe University of Art and Design said Wednesday it will not accept new students for the coming academic year after negotiations for the sale of the school to an Asian company broke down, imperiling the for-profit university’s future and putting a potential dent in the city’s economy.
Maria Puzziferro, the school’s interim president, acknowledged that closing the school of 650 students could be an option, but in an interview, she downplayed that possibility.
“I wouldn’t say this is a step toward closing,” Puzziferro said. Then she went on to say that the for-profit university might consider closing but would not shut down suddenly, thereby enabling students to complete their degree programs.
The brand and assets of the Santa Fe school are owned by Laureate International Universities. The city of Santa Fe leases the campus to the university for $2.2 million a year. Laureate had hoped to sell its assets to Raffles Education Corp. of Singapore, but the deal stalled and then fell apart while an accrediting agency sought more details on the transaction, according to Puzziferro’s staff.
With the sale scotched, new questions emerged about the Santa Fe university’s potential for survival with a smaller student body, which could lead to layoffs of faculty and staff.
Students said they were disappointed that the university’s stability seems clouded. Civic leaders and business owners shared that sentiment.
Mayor Javier Gonzales said in a statement that the city government is “extremely disappointed that the transfer did not move forward, and of course we’re also concerned about the students, faculty and staff. We will move quickly to determine what this means for the immediate future of the campus.”
The Santa Fe City Council met in closed executive session Wednesday night to discuss the development. City Attorney Kelley Brennan said the council discussed the “implications for the city and actions that we are taking and will continue to take in response.”
Student Carlos Moreno, 19, is finishing his first year in the business arts management program. He said he had hoped a new owner would invest in the school, improve the campus and expand programs.
Now Moreno is worried that he will not be able to finish his degree at the university and is looking at other schools. “It’s pretty much a year wasted,” he said. Moreno said he was not made aware when he enrolled that the university might end up with a new owner.
A lack of communication from the school’s leadership has become a recurring criticism from students who have wondered about the prospective sale. Businesses around the campus off St. Michael’s Drive also are worried about the possibility of losing a natural customer base if the university can’t survive.
Sergio Albana, co-owner of Sunrise Family Restaurant, 851 St. Michael’s Drive, said a group of 10 students regularly arrives for breakfast and lunch, and the eatery also serves faculty members and staff.
“There are a lot of businesses around this location who see students,” Albana said.
At Tecolote Cafe on St. Michael’s Drive, a popular stop for breakfast burritos, manager Marcelino Silva said the campus means customers for the restaurant.
“I visit with plenty of students. We get our share. If it’s closing, it will definitely affect us,” Silva said.
Another concern would be the future of two campus landmarks, Greer Garson Studios and its art house cinema, The Screen.
College spokeswoman Rachael Lighty said the studio probably will continue to operate, regardless of what happens with the university.
“We recognize that it serves an important purpose to the community, and there is no impact to the studio’s future,” she said.
Jon Hendry, head of the Santa Fe-based International Alliance of Theatrical Stage Employees union, said the city could and should keep the studio running.
“I don’t think the Garson is going anywhere,” he said of the studio, home lot of the television series Longmire. “It could work as a stand-alone. It’s doing very well. That place will never be dark.”
The university had been waiting for months for the sale to be made final. But its administrators said the Higher Learning Commission — a private, nonprofit entity that accredits about 1,000 colleges and universities in 19 states and approves such sales — postponed a decision on the deal. The commission Maria Puzziferro, interim president of the Santa Fe University of Art and Design, acknowledges that closing the school of 650 students could be an option, but she downplayed that possibility Wednesday.
wanted more information about both the buyer and the seller before making a decision.
“We couldn’t see a clear pathway to approval anytime in the near future,” Puzziferro said.
She said the sales agreement between Laureate and Raffles included a clause that allowed for calling off the deal if regulators had not approved the sale by a certain date.
Steve Kauffman, a spokesman for the Higher Learning Commission, said Wednesday that university administrators hadn’t notified the commission that the sale was off.
If the school decides to close, Kauffman said, it must follow commission guidelines about allowing students to finish their degree programs over the next few years.
But that would necessitate a smaller number of employees, almost certainly leading to layoffs.
The Santa Fe University of Art and Design operates on the site of the former College of Santa Fe, which was run by the Christian Brothers of New Mexico. That college opened on the St. Michael’s Drive campus in 1947, though the Christian Brothers had started the school in 1874 as St. Michael’s College.
The College of Santa Fe faced faced mounting financial trouble about 10 years ago, and in 2009, the college’s board of trustees decided to close the school.
The city then bought the campus for about $20 million and leased most of it to a Laureate-backed group called the Santa Fe Higher Education LLC. The city also sold some of the property to the state.
Last year, the City Council approved an extension of Laureate’s lease for the 62-acre campus at $2.2 million a year, the same amount as the city’s bond payments for the land along St. Michael’s Drive. That agreement gives Laureate the right to purchase the property and also the right of first refusal should the city receive another offer.
Matt Ross, spokesman for the city, said that lease agreement requires the arts college to give seven months’ notice. He said the college is a “tenant in good standing” as of this week. Its lease runs to 2035.
Laureate began in 1989 as Sylvan Learning Systems, a franchise that provided tutoring and remedial education courses. It was acquired by a group in 2004 that changed the name to Laureate. CEO Douglas Becker took it private in 2007 with support from Citigroup, George Soros, Henry Kravis and Paul Allen.
The company announced plans to go public and launched its stock offering Feb. 1, raising $490 million from investors to pay off the private shareholders. The company, which trades on the NASDAQ exchange as LAUR, on Tuesday announced its first earnings, saying it had posted a $41.3 million profit in the fourth quarter of 2016.
The company told investors it expects 2017 revenue in the range of $4.3 billion with enrollment growth of 2 percent to 3 percent across its 200 campuses in 25 countries. But Wall Street analysts also expect Laureate to increase its profit margin and reduce its exposure to campuses such as the one in Santa Fe that continue to operate at a loss.
Laureate recently sold some of its overseas campuses, including Les Roches and the Glion Institute of Higher Education hospitality schools.