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Chicago Tribune
21-05-2025
- Business
- Chicago Tribune
Officials: Valparaiso University's enrollment expected to grow in coming academic year
Though the timing isn't right yet for solid numbers, Valparaiso University officials said during a Wednesday community town hall that they expect enrollment to tick up when the academic year begins anew in August. 'I'm sure all of you are wondering what we are looking at for fall,' said Rosa Alvarado, the university's new assistant vice president for enrollment. 'We are on a very strong upward trend.' While applications were a bit down, deposits to hold spots for the coming year are up, Alvarado said, adding the university will see a 'sizeable' group of new undergrads and a 'small but strong' cohort of graduate students. 'We are ahead at this time of where we were last year for incoming freshmen, incoming transfer students and incoming graduate students,' President José Padilla, who is retiring at the end of the calendar year, told the more than 50 community leaders and representatives who attended the town hall, held in the Harre Union. Commitment to attending the university includes a $200 deposit, though some prospective students decide to go elsewhere and give up that deposit, a slimming-down of the number of students Padilla called the 'melt.' 'Right now we're ahead of pace but it's premature for us to say the numbers,' he said, adding the figures will be shared in the fall after the academic year begins. The university's struggle for students has been ongoing, not helped by the closure of its law school in 2020 or the COVID-19 pandemic. The fall and new student headcount both dropped in the past two years after numbers began to climb slightly in 2022, as the direct impact of the brunt of the COVID-19 pandemic began to wane. Still, according to enrollment figures on the university's website, both numbers are below where they were in the fall of 2019 before the pandemic began. The university had 852 new students in August 2024, compared to 1,004 in 2019. Likewise, this year's total fall headcount was 2,598 students, compared to 3,521 in fall 2019. Only 16 students from the latter count were in the university's law school, its last cohort before it closed. University officials have said they are working to 'right size' the student population count, something Padilla said they are discussing with the school's board of trustees. 'We're looking at 2,800 (students) as sustainable,' he said. Toward that end, Padilla noted the recent sale of two of three cornerstone pieces of art from the Brauer Museum, including 'Rust Red Hills' by Georgia O'Keeffe, as allowed by an August Porter Superior Court decision and affirmed by the Indiana Attorney General's Office. The sale required a modification of the Sloan Trust, which directly or indirectly funded purchase of the three paintings. 'The Silver Veil and the Golden Gate' by Childe Hassam also sold, a university spokesperson confirmed last week. The sale of Frederic E. Church's 'Mountain Landscape' is still in process. 'Now we have $12 million in the bank,' Padilla said, which allows the university to move forward with renovations for Brandt and Wehrenberg halls for its freshman village. The renovation includes a gallery to display lesser-known works of art from the Sloan Trust. The renovations are in the planning stages, Padilla said, but with the necessary funds in hand, 'we're off to the races with what we initially intended to do.' The university's marketing team is already working to push the renovated facilities. 'We're very excited about it. I think it's really going to help us in terms of getting students here,' Padilla said. About 30% of the incoming students are commuters, who do so to save money, Padilla said, adding he doesn't expect that to change much. Still, university officials prefer to have students living on campus, something that should increase with the dorm renovations, which include air conditioning, furniture and other upgrades. 'With these upgraded dorms, we think we're going to get more residential students,' he said. Meanwhile, Mark Volpatti, the university's senior vice president for finance and chief financial officer, said Scheele and Lankenau halls are dormant and likely will be razed, though how that space will be used by the campus is yet to be determined. Officials said the university also is selling off some of its unused property, including the site of the former Strongbow Inn, which the university purchased two years ago as controversy swirled on campus and beyond about the artwork sale. The property, Volpatti said, is in the area of Silhavy and Sturdy roads and includes everything but the baseball fields in that area. Other topics discussed at the town hall included a new facility to replace LeBien Hall, home of the university's nursing program. 'LeBien Hall has served us well but it no longer meets our needs,' said Christine Radtke, the university's assistant vice president for development. A new building will strengthen enrollment for the university's nursing and healthcare programs, allowing for more extensive simulation labs and professional collaboration, she said. The facility will be 92,000 square feet and three stories as proposed. 'We want to have existing medical practices in this building,' Padilla said. 'We don't want our students to learn in a vacuum.' The university already is in discussion with potential tenants that will bring the community to the campus, he said. The project includes a seven-year fundraising campaign, which university officials hope to complete in five years, with plans to break ground as the university comes close to reading its fundraising goal, Padilla said. The new building will be constructed near the intersection of U.S. 30 and Sturdy Road. Additionally, Rebekah Arevalo, the university's assistant vice president and chief of staff, offered a timeline for finding Padilla's replacement given his pending retirement, which he announced in January. The university has engaged in the services of Academic Search, a search firm specializing in higher education. Additionally, a search committee has held 15 in-person meetings with campus and community members and seven online meetings for input on the university's next president. A professional profile will be ready sometime in June, with recruitment taking place over the summer and a review of candidates and scheduled interviews through October. A new president should be named by late November, to take over on Jan. 1. Padilla will have served as president for five years when he retires. Outgoing board chair Robert Hansen, who also announced he is retiring at the end of the year after 18 years on the board, including the last five years as chair, is being replaced by chair-elect Jon Steinbrecher, a 1983 graduate of the university.
Yahoo
14-05-2025
- Business
- Yahoo
Valparaiso University officials confirm art sale, ask city to serve as pass-through for $117M bond issue
Valparaiso University officials came before the Valparaiso City Council Monday to explain their bid for the city to serve as a conduit for up to $117 million in general obligation bonds for some campus renovations and to refinance university debt. What they got was a host of questions from the council on why the university sold cornerstone artwork from the Brauer Museum to fund freshman dorm renovations if they were undertaking a bond issue, whether the city would face any financial obligation, and how to explain the request to their constituents. 'We have a lot of publicity regarding some art sales,' said Mark Volpatti, the university's senior vice president for finance and chief financial officer. The university has sold or is concluding the sale of the three paintings, including one by Georgia O'Keeffe, and is moving forward with its freshman village, he said, adding the renovation work was being done without taking on debt and through 'the proceeds from the artwork.' University spokesperson Michael Fenton confirmed in an email to the Post-Tribune Tuesday that O'Keeffe's 'Rust Red Hills' and 'The Silver Veil and the Golden Gate' by Childe Hassam have been sold. Because the sale was conducted through a private broker, he did not have information on the identity of the buyers. The sale of Frederic E. Church's 'Mountain Landscape' is still in process, Fenton said, 'and there is no further information at this time.' Work on the freshman village, as Volpatti called it, includes air conditioning, furniture and other upgrades. The dorms, Brandt and Wehrenberg halls, are slated to have a gallery displaying lesser-known works of art from the Sloan Trust, which directly or indirectly provided the three paintings being sold off. The work is slated to begin this summer and conclude by fall 2026. 'People will say the No. 1 reason people don't come to Valparaiso University is because of the housing,' Volpatti said. 'All the other stuff is really good for us.' As far as the bonds, Patrick Lyp, the city attorney, said the city can act as a conduit for the bond purchase and has done so for other non-profits, including a senior housing facility a few years ago. 'This is not necessarily debt issued by the city, where we're responsible,' he said. David Nie, an attorney with Ice Miller and the university's bond counsel, reiterated that the bonds do not obligate the city financially. Under the Internal Revenue Service's tax code, non-profits have to go through a government entity to secure general obligation bonds. In this case, he said, the Valparaiso Economic Development Corp. can serve that role, which also is allowed under state statute. 'Their consideration is whether the project would be of benefit to the general welfare of the city and we think we meet that threshold,' Nie said. The maximum for the bond issue is $117 million but Volpatti expects the amount to be closer to $55 million, with about $15 million for infrastructure upgrades on campus, including new roofs, information technology work, and other needs. The rest of the funds will be used to refinance existing debt. The university's goal, Volpatti said, is to have the bonds on hand by the end of June, which also is the end of the university's fiscal year. City council members had an assortment of questions about the sale of the artwork, the university's junk bond status by Moody's, and whether the university had a backup plan if the council voted against pitching in with the bond issue. Councilwoman Barb Domer, D-3rd, asked Volpatti to confirm that the freshman dorm renovations weren't included in the $117 million bond issue and that the entire cost of those renovations would come from selling the paintings, which he did. The university expects the paintings to bring in around $12 million, which is what's being invested in the dorm renovations, Volpatti said, adding the $117 million figure for the bond issue 'is if we go all in and we don't think that will happen.' 'What's the Plan B? What happens if this body says no?' asked Councilman Peter Anderson, R-5th. The university would have to figure out the funding, Volpatti said, and determine whether that's done through philanthropy or selling core assets. Nie, under questioning from Council President Ellen Kapitan, D-At-large, reiterated that the city would serve as a pass-through for the bonds. 'In no way does this ever reflect on the issuer that issued the bonds. In no way does this come back to the city,' Nie said, adding the bonds would not impact taxpayers. Councilman Robert Cotton, D-2nd, like other city officials, said he supports the university but had questions about the university's recent bond rating analysis from Moody's. 'I just feel very responsible to understand as best as possible the recent change in the bond rating' and whether that's from the university's debt or its enrollment struggles, Cotton said. Moody's Investor Services, Inc. recently downgraded Valparaiso University two notches to a junk rating, which could raise the university's borrowing costs. In an April 30 report, Moody's noted that 'the highly competitive student market poses ongoing difficulties for enrollment management. Inability to boost net tuition revenue will further limit financial reserves and the university's capacity to address operating deficits in the short term.' The negative outlook, Moody's said, 'reflects the potential for continued enrollment challenges resulting in pressure to balance operations.' The university is working to 'right-size,' Nie said, and determine where it sees growth. At one time the university hoped to have more than 6,500 students but 'that's not happening,' he said. The university had 2,598 students at the start of the 2024-2025 academic year, according to its website. The goal, Nie said, is for the university to break even for two years and generate revenue four years out. Still, Cotton wanted to know if the university would be 'pressing against a debt limit' with the general obligation bonds. Nie confirmed that the university has enough funding to support the bond payments, and added that the university will only be taking on an additional $15 million in debt for the infrastructure work since $32 million to $37 million will be used to restructure debt. This is the first time the university has asked the city to be a conduit for a bond issue. 'If this was an option, can I ask why it wasn't used instead of selling the artwork?' asked Councilwoman Emilie Hunt, D-At-large. The artwork was sold, Nie said, because university officials 'felt like we had a very great asset but it wasn't doing the most from an operational capability for the campus to run. It was just a decision the university made.' Per the court order that allowed for modifying the trust that provided the funding for the paintings, Nie said, the funds have to be used for the dorm renovations. Any money left over also has to go toward university housing. Domer said she was still trying to figure out the sequence of events and how she was going to explain that there was more than a year of legal controversy over selling the art because those funds were necessary for dorm renovations. 'That's all happened and now there's a request for a $117 million bond issue and when I think about the sequence of events, wouldn't all of this have been known a year ago or even six months ago, on the heels of a court order saying it's OK to sell those paintings to renovate the freshmen dorms?' she said. The university chose to sell the paintings for the dorm renovations, Volpatti said, because 'we thought that was the best return on the investment.' Selling the art, he added, was the best thing for the university and, in turn, the city because the renovated dorms would bring people here. 'From our position, this is a bit of a confusing thing, right?' Anderson said. 'The city is doing something for the university, it's this very innocent pass-through thing but it's very difficult to explain that to the public. 'I would think you would do yourselves a service by letting us know exactly what the projects are going to be because that allows us to present that to our constituents.' Nie said the university could share a memo about the details with Lyp. Additionally, Lyp said the university will have to present an economic benefit statement to the VEDC, including job retention, which is at least as important, if not more so, than new hires. The university has about 600 employees, Volpatti said, with about 200 or 225 faculty members and the rest staff employees. 'For me, it's really important that we have Valparaiso University. It's a huge asset to our community,' Kapitan said.' I'm glad we're able to have this conversation to show our support but at the same time, I'm understanding what our role is in this, and we're successful when you're successful.' Mayor Jon Costas said he appreciated the conversation and understood that the city would look and feel a lot different without the university. 'Smaller, private institutions are challenged and you've got to make some difficult decisions to make sure you're succeeding,' he said, adding the city would not be taking on any risk by serving as the conduit for the bond issue. The council voted to carry the matter to its next meeting, scheduled for June 9, though it could schedule a special meeting before that to consider the proposal. In the meantime, the city's plan commission will have to give the proposal a cursory glance, which officials expect to be routine since it doesn't include anything involving city infrastructure. The Valparaiso Economic Development Corp. will hold a public hearing about the bond issue at 2 p.m. May 28 in council chambers at city hall, the only public hearing on the proposal before it goes back to the city council for a final vote. alavalley@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Chicago Tribune
05-05-2025
- Business
- Chicago Tribune
Status of Brauer Museum artwork slated for sale unclear as Moody's downgrades Valparaiso University's rating
A Valparaiso University spokesperson said Monday that the university has 'made enough progress' in its plans to sell three cornerstone pieces of artwork from the Brauer Museum of Art on campus to move forward with planned dorm renovations. The exact status of the artwork remains unclear. 'More information will be released to campus regarding some of the sale details in the coming days,' Michael Fenton said in a Monday email to the Post-Tribune. 'As stated in our original plan, the sale of these paintings was to fund the renovations, which are scheduled to begin this summer and last until Fall, 2026.' The three works in question are 'Rust Red Hills' by Georgia O'Keeffe, Frederic E. Church's 'Mountain Landscape,' and 'The Silver Vale and the Golden Gate' by Childe Hassam. According to appraisals received by the university, the fair market value of the O'Keeffe is estimated at $10.5 million to $15 million; the Hassam, between $1 million and $3.5 million; and the Church at $1 million to $3 million. Fenton has said that the projected cost of renovating Brandt Hall and Wehrenberg Hall for first-year students is approximately $8 million. The renovated dorms are slated to have a gallery displaying lesser-known works of art from the Sloan Trust, which provided directly or indirectly for the three paintings being sold off. 'I can confirm that we have made enough progress to move forward with the planned resident hall renovations,' Fenton said. The update of sorts comes on the heels of a Thursday article in Bloomberg that Moody's Investor Services, Inc. has downgraded Valparaiso University two notches to a junk rating, which could, per the article, raise the university's borrowing costs. In an April 30 report, Moody's noted that 'the highly competitive student market poses ongoing difficulties for enrollment management. Inability to boost net tuition revenue will further limit financial reserves and the university's capacity to address operating deficits in the short term.' The negative outlook, Moody's said, 'reflects the potential for continued enrollment challenges resulting in pressure to balance operations.' Moody's also said the university's 'substantial wealth, totaling nearly $350 million in cash and investments,' as well as strong donor support and its regional reputation, weighed in the university's favor. 'Moreover, management's efforts to restructure operations to cut costs and increase revenue are favorable for long-term prospects,' the report stated. Fenton said via email that the university will continue to work with Moody's to show everything the university is doing to further strengthen its financial foundation, implement its strategic plan, and address the challenges facing higher education. 'The University is undertaking innovative enrollment strategies, a comprehensive fundraising campaign, and reinvestment in campus operations,' Fenton said. 'As Moody's points out in its statement, we are confident in our ability to continue to meet our mission as a Lutheran institution that prepares students not only for successful lives and careers, but also as servant leaders in church and society.' Both the university's Moody's rating and its enrollment have struggled in recent years. Moody's downgraded the university's bond rating two years ago as well. At its peak, in 2016, the university's bond rating was A2 but it's been slipping since then and is now Baa2. The fact that the drop coincided with the university's decreasing enrollment was not a coincidence, a Moody's official said then, and news about the sale of the artwork also was a factor that Moody's took into consideration when doling out Valparaiso University's rating in 2023. Valparaiso University's fall and new student headcount both dropped in the past two years after numbers began to climb slightly in 2022, as the direct impact of the brunt of the COVID-19 pandemic began to wane. Still, according to enrollment figures on the university's website for August, both numbers are below where they were in the fall of 2019 before the pandemic began. The university had 852 new students in August, compared to 1,004 five years ago. Likewise, this year's total fall headcount was 2,598 students, compared to 3,521 in fall 2019. Only 16 students from the latter count were in the university's law school, its last cohort before it closed. The university filed a petition almost a year ago to move forward with the auction of the art from the Brauer Museum to fund freshman dorm renovations, noting a $9 million deficit and declining student enrollment. A Porter Superior Court judge ultimately granted the petition, which required modifying the trust that provided the artwork to allow for the sale. Valparaiso University President José Padilla first announced the plans in February 2023, garnering stiff criticism from the campus community, including faculty and students, as well as the art world. The faculty senate issued a vote of no confidence for Padilla in the fall. He has announced he's retiring at the end of the year.
