When we’re talking about how to source and allocate $41 million at a time when the very word “economy” sounds like an existential joke, it’s best to begin with the facts.
And facts—in relation to the city of Santa Fe’s potential purchase of the College of Santa Fe campus and subsequent leasing of facilities to Laureate Education, Inc.—have been in short supply. Oh, the truth is out there; the facts are not hidden. It’s just that, as Santa Feans, we have a special ability to fabricate convictions disconnected from reality. It’s probably why UNESCO declared Santa Fe a “creative city.”
Here are some blatant falsehoods widely considered to be true:
1. The city will spend $30 million in taxpayer dollars to purchase CSF.
2. The city will then become the primary operator of CSF, thereby getting into the college business in addition to the city business.
3. Laureate is a huge university that drops its robotic programs on unsuspecting cities like University of Phoenix cluster bombs.
Here are the corresponding facts:
The city will issue a bond, effectively borrowing $29.5 million. The city will “buy” the CSF property by paying CSF creditors $19.5 million on approximately $31 million owed. CSF’s debt will then be settled and the city will own the property. An additional $12 million will be generated through selling some of the acreage to the state of New Mexico, discretionary funds committed by Gov. Bill Richardson and grant sources. The city’s debt service on the borrowed $29.5 million will be paid by Laureate’s lease: $2.35 million annually. The city will invest $15 million of the sourced funds in capital improvements and another $5 million in reserves. Laureate will invest $20 million of its own money into capital improvements and revitalizing the college.
What if Laureate folds or runs away? Beyond Laureate’s contractually obligated investment (and the money it already has invested in CSF), the city will still have its reserve funds to cover the debt service for more than one year in order to find a new service provider.
But Laureate is not likely to close. Say what you like about multi-national corporations, Laureate has never closed one of its schools and has continued to profit through the global recession.
Finally, as fun as it would be to believe otherwise, Laureate has no forced strategy or plan that it exercises uniformly across its holdings. It appears content to let schools survive based on individual specialties and niches—the only
practices it enforces are long overdue for CSF: financial accountability and capable marketing.
Another fact that bears serious consideration by the City Council is what will happen to the CSF property if it does not intervene. The most likely scenario is years of bankruptcy litigation while the property continues to fall into disuse and become an expensive security problem, a persistent eyesore and the death blow to sensible redevelopment of the St. Michael’s Drive corridor. Any councilor who votes against saving the college will have a dangerous and dilapidated property in the heart of the city on his or her shoulders.
And why would a councilor vote against saving the school? After all, the city staff has structured a sound deal with Laureate, having wrestled with experienced international deal makers to come up with a fair shake for Santa Fe. But in Santa Fe, we have a hard time basing our government decisions on the facts: We tend to get all emotional. Again, it must be that creative thing.
What are the possible emotional motivations for councilors?
1.It’s too big and confusing and it’s a lot of money and what if everything goes wrong?
2. I’ve been reading editorials and website comments and a lot of people are mad about this.
3. That stupid college ran itself into the ground and it isn’t our business to save it.
4. I am running for mayor and this is the current mayor’s big idea and so I look tough by opposing it.
Again, in corresponding order:
A city councilor’s job is to deal with big and confusing issues and lots of money. If you can’t handle it with our best interests at heart, please resign.
We cannot be governed by squeaky wheels. The opinions of a few angry people who don’t take the time to comprehend the situation should not outweigh facts and good governance.
Yes, the stupid college ran itself into the ground and, no, it is not the city’s job to fix it. But this is a rare opportunity for the city to save history while simultaneously investing in the future. Like the arts and culture industry? Like being an internationally recognized cultural destination? Like being called a creative city? None of it will last without a college.
Finally, nobody looks good by saying “no” for the sake of saying no. Nobody looks good for disregarding hundreds of hours of quality staff time for the sake of petty rivalries.
If there has ever been a time for a unanimous vote from a council united in investing in the future vitality of this city, it’s now. If there has ever been a legacy project for which the council can be fondly remembered, it’s this one.
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