Antioch University considers building sale
- Published: July 28, 2016
As part of cost-cutting efforts, Antioch University leaders are looking into the best ways to make use of AU’s physical facilities on their five regional campuses. And an aspect of that effort is a discussion among leaders regarding whether to sell its 94,000 square foot AU Midwest building on the western edge of Yellow Springs.
The talk is in the preliminary stages, according to AU Interim Chancellor William Groves last week, who emphasized that the building is not on the market at this time.
“There is no announcement and no decision has been made,” Groves said in an interview.
Sale of the Midwest building is being considered because its location no longer works well for students, according to a university leader who asked not to be identified. The students at AU Midwest are adults with busy lives and families, and most come from the Dayton or Cincinnati areas, so that driving here is inconvenient. University leaders want to make AU programs more accessible to students from area cities. and one way to do that is to partner with other institutions to offer classes in other locations, according to the source. For instance, last year the university partnered with Sinclair Community College to offer AU classes at Sinclair’s Mason campus.
The AU Midwest building is still being used for some education classes, offices for AU central staff and AU Midwest staff, and its weekend bachelor’s degree completion program. However, much of the building, which includes 23 classrooms, is unused.
Because funding for the building came through bonds issued by the Ohio Higher Education Facilities Commission, the building, if sold, would need to be used for educational purposes, according to the university source. And if it sells the building, AU Midwest would likely not construct a new building but rather lease a facility that is closer to its students in order to increase flexibility.
Overall, the university serves about 4,500 adult students at its five campuses and online, according to the website Inside Higher Education.
The discussion regarding whether to sell AU Midwest is part of a university-wide effort, headed up by its Real Estate Task Force, to optimize use of the AU physical facilities. Last year the school sold its downtown Seattle campus to a developer for $26.5 million, then signed a longterm lease on a larger facility three blocks away, according to the Seattle Times. In Santa Barbara, the university expanded its space in 2011 when it entered into a partnership with the Hutton Foundation, which purchased a building now used for the downtown campus for $11 million and leased it to AU for 10 years, according to the online site Noozhawk. The university owns its AU New England campus in Keene, N.H., but is considering selling the space, the university source said.
Budget deficit
The news that AU is considering the sale of the Midwest building came during a gathering of university faculty and staff several weeks ago, shortly after the announcement of the university’s restructuring, which included the elimination of campus president positions. At the gathering, AU employees were told that restructuring was necessary because the university’s operational budget had a deficit of about $8 million for the fiscal year ending in June 2016, with a deficit of $7 million projected for the end of 2017, according to several AU employees in attendance, who asked to remain anonymous due to their employment by the university.
However, that deficit only relates to the operational budget, which includes the university’s revenues and expenses but not its assets, according to Interim Chancellor Groves last week. The university’s year-end financial performance statement, which includes assets as well, will not show a deficit.
“We fully expect to end the fiscal 2016 solidly in the black, with surpluses in some areas,” Groves said.
The operational budget deficits were related to overly optimistic enrollment projections on four of its five campuses, according to the AU source.
At the university-wide gathering, employees were told that the retirement benefits of upper-level administrators were being reduced, although not that of faculty and other staff. Also, the university announced it was giving faculty a 2.5 percent annual raise. The efforts are being made to try to bring the AU benefits and salaries into the midrange of academic salaries and benefits, because previous salaries had been low and benefits were high compared to those of others in the profession, according to the university source.
Controversial building
The Midwest building, then called AU McGregor, sparked controversy when it was constructed in 2007 due to its large size and location on the edge of town, which took AUM students away from the Antioch College campus. Previously, classes at Midwest were held on the campus, but in 2003 then-President Barbara Gellman-Danley announced the need to have larger facilities due to what she predicted would be an annual 10 percent growth in enrollment. Gellman-Danley also said that she might move the school out of Yellow Springs if an appropriate location couldn’t be found locally.
At that point, leaders of Community Resources, the local economic development group, flew to Seattle to meet with the Antioch University board of trustees, to urge them to build a new building in Yellow Springs. Community Resources also donated 11 acres of the land it had purchased for the proposed Center for Business and Education, or CBE, so that AU Midwest could anchor the new commerce park. The AU board agreed to build in Yellow Springs, and the university secured a $13 million loan from the Ohio Higher Education Facilities Commission for bonds for the project. About $2 million in donations were also raised for the project.
However, the projected enrollment growth at AU Midwest didn’t take place after the school’s high of about 700 students in the early 2000s. Midwest officials didn’t respond to a request for enrollment numbers this week, but AU Midwest employees in 2014 told the News that enrollment had declined by about half, due partly to the recession and a decline in state funding for teacher training.
In recent weeks, Community Resources leaders told Village Council that they plan to transfer the remaining 35 acres adjacent to AU Midwest, intended for the CBE, to the Village. The land had been purchased with a $300,000 no-interest loan from the Village in 2003 but the Village funding for the CBE was voted down in a Village referendum in 2014.
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