Mount Ida College in Newton will receive “fair value” for its assets through its proposed acquisition by UMass Amherst, according to Attorney General Maura Healey’s office, which found after a review that the consequences to the Mount Ida community of not closing on the deal by Wednesday “will be more devastating than they would be if the transaction occurs.”
In a letter Tuesday to the college, Healey deputies said they expedited their review of whether Mount Ida will receive fair value due to “deeply regrettable circumstances” and concluded that closing on the deal by Wednesday will enable Mount Ida to avoid bankruptcy, ensure payment of outstanding wages to workers and secure commitments made by UMass to displaced Mount Ida students.
Citing a “disorderly and harmful closure,” Healey’s office also disclosed Tuesday it plans to open an investigation into Mount Ida’s senior administrators and its board of trustees to determine whether they violated their fiduciary duties in addressing the college’s financial condition and in carrying out its educational mission.
“We are extremely disappointed in the way Mount Ida handled this closure. Hundreds of students have had their education and future plans put in jeopardy, and many dedicated faculty and staff have lost their jobs,” Healey said in a statement. “Over the past few weeks, we have worked closely with students, parents, UMass campuses, and other schools to ensure that Mount Ida students have the best possible options to pursue and complete their degrees on time.”
According to the AG’s office, it reviewed deal documents and valuation analyses and conducted interviews with independent consultants before determining the $86.5 million value of the deal to Mount Ida amounts to fair value. The deal includes a $75 million payment from UMass and $11.5 million in debt forgiveness from a creditor that the attorney general’s office says is contingent on the transaction.
The attorney general’s office, which oversees organizations registered as charities, such as Mount Ida, concluded the deal does not require court approval.
On April 6, UMass Amherst surprised most people in Massachusetts with its announcement that it had reached a preliminary agreement to acquire Mount Ida, a college with more than 1,500 students and a history that dates back to 1899. Mount Ida had previously explored merger talks with Lasell College.
The sudden closure announcement sent students scrambling to find new colleges to attend, with UMass offering its assistance with placements. Healey aides say Mount Ida lacked a closing plan, which the Department of Higher Education requires “as far as possible in advance” of an institution’s closing.
On April 27, Mount Ida notified the AG’s charities division that the transaction would need to close on May 18, “otherwise MIC [Mount Ida College] would run out of money.” The closing date was lated moved up to May 16.
Healey’s office described commitments made by UMass to Mount Ida students as an “important component” of the transaction and concluded that without the closing, options for Mount Ida students, in particular those with specialty degree programs, “will not be available.”
According to the letter, among the commitments contingent on the transaction’s closing:
- UMass Amherst will “teach out” Mount Ida’s veterinary technology programs on the Newton campus with seamless credit transfer pending approval from the Board of Higher Education and the American Veterinary Medical Association. UMass Amherst will also provide housing, dining services, library and academic support services on the Mount Ida campus.
- UMass Amherst and Regis College have a plan to lease space to Regis that UMass Amherst will acquire through the transaction. Under the agreement, Regis will service the needs of Mount Ida’s incoming, pre-dental and dental hygiene students, pending approvals.
- UMass Amherst will convey for free to Cape Cod Community College assets that UMass Amherst is acquiring as part of the transaction that are needed for funeral services, enabling Cape Cod Community College to offer a program in funeral services starting with the fall 2018 semester, pending approvals.
- UMass Amherst has agreed to convey equipment needed for the interior architecture and design and fashion design program to UMass Dartmouth, which has agreed to teach out the programs with a seamless credit transfer, pending approvals.
The letter to Mount Ida from assistant attorney general Jonathan Green and Arwen Thoman of the Public Protection & Advocacy Bureau also outlines a series of commitments to Mount Ida students from UMass in the areas of admissions, credit transfers, transfer advising, student records and degrees. All four UMass campuses have agreed to charge lower in-state tuition rates to all Mount Ida students who are citizens or permanent U.S. residents and who matriculate by Sept. 1, a policy that UMass will maintain for six semesters within a five-year window as long as students are enrolled full-time.
As for the Mount Ida administration and board, Green and Thoman concluded in their letter, “We will continue to be in touch as, in the coming weeks, we will review the actions of the MIC Board and senior administrators in addressing MIC’s financial condition to consider whether or not these parties violated their fiduciary obligations under charities law.”
A spokesman for UMass President Martin Meehan said Healey and her staff “are focused on the best interests of Mount Ida’s students, and UMass has worked to provide solutions for and assist as many Mount Ida students as we possibly can.” To date, more than 600, or nearly half of Mount Ida students, have applied to a UMass campus, said Jeff Cournoyer.
Cournoyer said Mount Ida “has informed us of the need to close the transaction to avoid bankruptcy” and said UMass was “preparing to close the transaction to, as the OAG [Office of the Attorney General] put it, ‘ensure payment of outstanding wages to MIC employees and secure many UMass commitments to MIC students,’ including ‘important options for MIC students, particularly those in certain specialty degree programs that MIC previously operated.'”
The UMass Boston Faculty Council on Monday issued a vote of no confidence in Meehan and the UMass Board of Trustees, which approved the Mount Ida deal, and called for the deal to be stopped.
The council called it “superfluous” for UMass Amherst to build a branch at Mount Ida and said the acquisition “in greater Boston would set a clear a [sic] precedent and inaugurate an inter-campus model of competition, rather than collaboration, within and across the UMass system.”
At noon Wednesday, the Senate Committee on Post Audit and Oversight plans to host a State House hearing as it looks into the pending acquisition.
Officials from both schools and the Department of Higher Education are expected to testify. Also invited to testify are: Department of Higher Education Commissioner Carlos Santiago, Deputy Commissioner for Academic Affairs and Student Success Patricia Marshall, former Commissioner Richard Freeland, Lasell College President Michael Alexander, UMass Boston alumni and a UMass Boston panel, Newton-Needham Regional Chamber President Greg Reibman and panels of Mount Ida students and parents. The Senate authorized the hearing on April 11, five days after UMass officials announced they would acquire Mount Ida’s campus.
On May 22, the Senate plans to begin fiscal 2019 budget deliberations. Sen. Richard Ross of Wrentham is sponsoring a budget amendment (278) that would require the UMass Board of Trustees to present proposed property or campus acquisitions valued at over $100,000 to the Joint Committee on Higher Education, which would hold a public hearing on the proposal.
Sen. Nick Collins of South Boston plans to offer an amendment (323) stipulating that UMass budget operating funds may not be used to pay for expenses, including debt service, involved in the acquisition of any private college.