Marlboro College: Going, going ...

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Marlboro College: Going, going ...

Tue, 06/30/2020 - 3:15pm -- tim

by C.B. Hall, Vermont Business Magazine The sale of the Marlboro College campus, announced on May 28, is moving forward – slowly. A statutory review of the deal by the Vermont Attorney General's Office (AGO) will postpone its consummation into July, past the original June 30 target date. A State Board of Education review of the plans may mean an even greater delay.

The prospective purchaser of the campus's 533 acres and 52 buildings is Democracy Builders Fund (DBF), an educational nonprofit headquartered in New York City.

Its founder and board chair, Seth Andrew, is looking forward to welcoming students to the campus in September.

The college's trustees decided last November to transfer Marlboro's academic programs and endowment, estimated at upwards of $30 million, to Boston-based Emerson College.

Last week both institutions finalized an agreement for their merger – which they term an alliance.

The AGO now needs 20 days to review that agreement concurrently with the agreement to sell the campus to DBF.

In a June 29 interview, Marlboro president Kevin Quigley anticipated that the closing for both transactions would take place "in roughly the next month."

Quigley notified the AGO of the proposed sale on June 2, as required by statute.

"Marlboro and Democracy Builders," the notice stated, "desire that the Campus Sale be completed as soon as possible prior to the completion of the Emerson Transaction."

A week later, however, Christopher Curtis, chief of the AGO's Public Protection Division, put the brakes on.

"Our review of Marlboro's proposed transactions (campus sale and agreement with Emerson college)," he wrote to Quigley, "necessarily must be reviewed concurrently given their interrelated nature. To that end ... we continue to request at least 20 days to review both transactions, starting from the time of formal notice of the Marlboro-Emerson transaction."

"The asset exchange agreement between Marlboro and Emerson was signed on June 26 by both presidents," Quigley told VBM, referring to Emerson's Lee Pelton and himself.

The AGO reported on June 29 that it had received documentation of that agreement, but was uncertain whether that constituted all the documentation needed.

Marlboro thus cannot sell the campus to DBF until at least July 19.

At press time the AGO was reviewing the paperwork for possible redactions before making it publicly available.

In a June 24 email, the AGO stated that, in the transfer of a nonprofit's assets, "our role is to review whether the transfer is consistent with the nonprofit’s mission and donor restrictions." Asked subsequently what the office might do if the terms of either transaction were unsatisfactory, AGO chief of staff Charity Clark said simply, "The statute is silent on that."

Board Of Ed Approval Could Take Months

While attention has focused on the AGO's role, the SBE appears to have more power over what happens.

Under Vermont law, every postsecondary school that operates primarily or exclusively in Vermont must "apply for a certificate of approval from the State Board [of Education] prior to registering its name with the Secretary of State [and] ... apply for and receive a certificate of approval from the State Board prior to offering postsecondary credit-bearing courses or programs and prior to admitting the first student."

Andrew has spoken favorably of operating his Degrees of Freedom program as a branch campus of Emerson. In that case the foregoing provisions may not apply.

However, the statute also states that every post-secondary school, without exception, "shall secure a certificate of degree-granting authority from the State Board before it confers or offers to confer a degree."

Apparently recognizing the applicability of at least this provision, the May 28 Marlboro press release announcing the prospective sale stated that "upon state Attorney General and Agency of Education approval, Democracy Builders’ Degrees of Freedom program will offer a hybrid degree" combining both high-school and post-secondary studies.

The SBE, which meets only occasionally, functions under the AOE.

It thus appears that Degrees of Freedom will have a longer row to hoe before commencing operations if it operates as a stand-along institution rather than a branch of Emerson.

If it finds an application unsatisfactory, "It is within the discretion of the board whether they want to provide feedback on the application or encourage the entity to submit ... an amended application," Ted Fisher, the AOE's director of communications and legislative affairs, wrote in a June 29 email.

The board does not meet again until August 19. Fisher told VBM that, once it receives the document, "the board has a series of steps to go through to consider the application. Six months is an estimated timeframe," he wrote.

He added, however, that estimates were difficult to make, since the circumstances are not ones that the board often considers. He stated that his agency had not yet received any application from DBF.

Approached by VBM for comment on the AOE/SBE role, Andrew wrote in an email that "we have not yet closed on the campus and we can't speak on behalf of the Agency of Education."

Nondisclosure Agreements

The prospective sale price has been redacted from the copy of the purchase-and-sale agreement released by the AGO. More broadly, much of the information on the process of selling the property is subject to nondisclosure agreements.

Many alumni, retired faculty members and local residents have chafed at the level of secrecy.

"There's never anything official coming from Quigley, because it's a secret," retired Marlboro professor Joe Mazur said. In his interview Quigley declined to react to the comment.

Skeptics have also objected to the transfer of the college's endowment to Emerson, a matter that will likely get attention at the AGO, even although the law does not seem to give the office any substantive power to object. They have also raised the question of DBF's finances.

According to federal tax forms filed by the organization for the year 2016, its net assets totaled only $349,201.

That's far short of both the assessed value – under $4 million, by one calculation – for the Marlboro College's real estate, and the approximately $5 million that Quigley mentioned, at a meeting last November, as probably acceptable to the college's trustees in the context of the glutted market for college campuses.

And the purchase price of course still leaves DBF the costs of maintaining the property until academic operations begin generating revenue. Quigley put those costs at $1-1.5 million yearly.

In a June 18 letter, six Marlboro residents accordingly asked the AGO to "thoroughly investigate Democracy Builders Fund to reassure Vermonters that it has a reasonable likelihood of fulfilling its financial obligations under the sales agreement."

Quigley dismissed an offer of $4.9 million made in November for the property. He cited a "binding exclusivity term" in an agreement with Emerson, according to David Williamson, a Marlboro alumnus who tendered the offer on behalf of an investor group.

In an interview with VBM in November, Quigley described the offer, conveyed in an email, as not being "what in most business instances constitute an offer."

Quigley said in his June 29 interview that plans call for the proceeds from the campus sale to go to Emerson, which "really didn't want any connection to the campus."

"Emerson is savvy enough to know that a campus in this rural location and in this market – it's not just about the money," he added, alluding to various risks associated with owning the property while managing, as Emerson does, multiple campuses.

The fear "that everything's going to Emerson – that's what's angering people in town," Mazur said. "It makes many people in town think this is a giveaway that has something of a sinister element."

Emerson did not return calls seeking comment.

Money, Accreditation, COVID

A 501(c)3 nonprofit corporation registered in Delaware although headquartered in Harlem, DBF, with its affiliated entities, operates 21 public charter schools, mostly in disadvantaged urban communities.

The intent of its Degrees of Freedom venture is to accept 11th and 12th graders for dual-enrollment programs, offering 13th- and 14th-grade studies leading to an associate's degree.

Stressing an emphasis on attracting low-income students, Andrew told those attending a virtual meeting of the Marlboro select board June 25 that the program's graduates "should walk out the doors able to take on a middle-class career."

If all goes as planned, it will be possible for high-school juniors and seniors to be tuitioned to Degrees of Freedom on a school-choice basis, he said.

He compared the expected yearly cost of enrollment, $9,000, to the yearly bill for educating a student at Brattleboro Union High School, which he put at $17,000.

A classroom teacher by training, he noted his experience in the public schools and brought up his discussions with town school representatives on the possibility of leasing or selling several of the campus's buildings to the Marlboro elementary school, which has major repair needs.

He said the proposal could be voted on in March, at the next town meeting. "It's not something that we're just open to – we're excited about it."

DBF, he said, intends to launch academic operations in September with about 100 students – many fewer than the 300 that the dorm space could accommodate if it weren't for social-distancing guidelines, he noted. Actual enrollment of students has not begun, since DBF has yet to buy the property.

The plan, he said, is to bring the students to the area in a dedicated coach on Amtrak's Vermonter train. They would get off in Brattleboro and then be chauffeured to the campus, where they would essentially live in isolation, with daily temperature checks, for a two-week residency.

The COVID crisis complicates even that cautious plan, however, since the Vermonter is only running between Washington, DC, and New Haven, CT, because of the COVID-induced reduction in ridership; a connecting train is running north from New Haven as far as Greenfield, MA.

As for accreditation, Andrew saw three avenues that would allow a September start-up. 

One would rely on so-called incubation accreditation, which would require the cooperation of a regional accreditation authority such as the New England Commission of Higher Education.

A second path would be to operate in partnership with Emerson as a branch campus.

A third would be accreditation by a national board such as online schools favor. Edsmart.org, for example, describes this accreditation as decidedly inferior to traditional regional accreditation particularly in terms of the transferability of credits.

His clear preference was for the Emerson affiliation.

"We hope to work with Emerson very closely," he told the meeting.

Critics Not Mollified

The September target date ran into headwinds from attendees concerned about both the accreditation timetable and COVID-related unknowns.

"It feels very close in time to imagine this going off," Susanne Shapiro, the town's health officer, expressed her reservations.

Andrew responded that the launch of operations would be "guided by science," and that if so advised by public-health experts, "we won't start in September."

In a series of queries, resident Adrian Segar addressed DBF's fiscal capacity, noting that the IRS had not posted DBF's 990, a reporting form for nonprofits, for any year since 2016. Andrew answered that this stemmed from a clerical glitch, and that DBF had in fact continued filing the forms.

Resident Amy Tudor described those more recent filings as "paperwork that he could hand in tomorrow" for public consideration. Andrew did not however offer to present them.

Segar went on to question the modest net-asset total of under $350,000 reported on the 2016 form.

Referring to the costs of buying and maintaining the campus, he asked, "Where's all this money coming from?"

"Let's wind up this thread," Andrew answered. He noted that the working group negotiating the sale "has seen more recent statistics," and that operations would be financed through philanthropy and student aid in the form of federal Pell grants, for example, as well as by direct tuition payments.

The purchase-and-sale agreement between DBF and Marlboro states that DBF has provided a balance sheet dated April 30, 2020. Andrew declined VBM's request for a copy.

Skepticism continues to be expressed outside of select board meetings, too.

In an open letter to the Marlboro College community, resident T. Hunter Wilson, a retired Marlboro faculty member, pointed to Harlem's Democracy Prep, one of the schools founded by Andrew.

At that school, Wilson stated, "their idea of training students to be good citizens is for them to file silently in uniform from one room where someone is in charge to another room where someone else in charge and to dole out demerits for talking out of turn."

The school's 2017-18 student handbook, accessed online, confirms the impression of an institution with far stricter rules than those of public secondary schools – say nothing of Marlboro College's very liberal culture.

Asked in an interview if Democracy Prep's relatively regimented, authoritarian format would be part of the model at Degrees of Freedom, Andrew's answer was simple.

"No."

So What's Ahead?

In a June 20 interview, Marlboro select board chair Jesse Kreitzer said he and Andrew had discussed holding a community forum on the Degrees of Freedom plan. Andrew, he said, had mentioned the first or second week of July as a possible date.

At the select board meeting, Andrew said, "As soon as the deal closes, we'll ... make that happen. It'll be something I can't wait to do."

Given the AGO's timeline, the closing cannot take place before the third week of July, affording only limited time for such a forum, not to mention all the other preparatory work, in advance of the intended September opening of the new school.

The State Board of Education's review of the endeavor could apparently push the opening much further into the future.

The purchase-and-sale agreement gives DBF the right to terminate the sale if it does not take place by July 1.

Asked by VBM about that possibility, given the AGO's and AOE's timelines, Andrew answered, "We sincerely hope that will not be necessary."

Discussion at the select board meeting and in the community suggests that Andrew can expect more skeptical questions as to whether his project can proceed as he hopes.

In the meantime, he and up to three associates have been on the campus regularly, sorting through the process of birthing a new school atop the hill that Marlboro College has occupied since 1946.

His approach, as he repeatedly told the meeting's attendees, is not to sit on his hands.

"We do move fast. We're innovators. We're bold."

He added that he and his family had already moved to Marlboro.

"I'm your neighbor now," he said.

File photos courtesy Marlboro College.