The Santa Fe University of Art and Design, which leases the old College of Santa Fe campus from the city, will stop enrolling new students next semester. On Wednesday, the for-profit college announced to employees that an expected purchase agreement had fallen through and the university plans to suspend registration while its parent company, LEI Holdings, Inc. decides what to do next.
LEI, which has ties to Laureate Education, had planned to sell the school to Raffles Education, a Singapore-based company that would have claimed SFUAD as its first US school. A letter sent to faculty and staff by SFUAD Board of Directors Chairwoman Susan Fairbairn said the school would remain open and that it did not expect accreditation or financial aid eligibility to be impacted by the decision.
Depending on the courses they take, the school's 690 students pay between $14,000 and $20,000 each semester for tuition, room and board. SFUAD has not made any decision about layoffs.
Fairbairn's letter also said “Our students’ academic success is our first priority.” However, students contacted by SFR on Wednesday were not aware of the change.
In an emailed statement, university spokeswoman Rachael Lighty said, “We believe this is the most prudent and necessary step in order to now consider the best options for the university.”
In a phone call Wednesday afternoon, Lighty tells SFR the decision to abandon the deal was made early this morning. The sale had been expected to close by now and the delay impacted the agreement, which contained an expected timeline for clearing the purchase with the Higher Learning Commission and the US Department of Education. "We are committed to our summer session and to staying open through the 2017-2018 school year," she says. The commission confirmed Wednesday that the university remains accredited.
Lighty says SFUAD began notifying students through email and social media on Wednesday afternoon and plans to have in-person talks with students. Roughly 100 seniors will graduate on May 13, leaving fewer than 600 students. Lighty says academic advisers will work with any students looking to transfer out of the university.
City of Santa Fe spokesman Matt Ross tells SFR that the city's financial relationship with SFUAD remains in good standing. The university pays the city $2.23 million a year. Ross says the quarterly payments of $557,500 are current and Laureate has not notified the city that it plans to exercise a termination clause in the lease requiring seven months' notice.
In a statement, Santa Fe Mayor Javier Gonzales said, "Eight years ago, we stepped in to save an educational center in the heart of our city, and in doing so we made a big investment in this community. It was a good investment then, and it is still a good investment today."
The city purchased the 91-acre property near St. Michael's Drive and Cerrillos Road for $19.5 million after the College of Santa Fe closed down in 2009. The loan used for the sale was much higher—$29.6 million. The city used the money to pay for deferred maintenance on the property. Since then, it's sold off roughly 30 acres. Santa Fe could pay off the loan today for $27.8 million, though Matt O'Reilly, director of the Office of Asset Development, says the property appraised in 2013 for $31 million. The city is in the process of reappraising the land and buildings, which sit at the west end of the planned Midtown Local Innovation Corridor.
This is a developing story and SFR will add information as it becomes available.