NewsBlack Developer Invests $70 Million To Save HBCU Saint Augustine

Black Developer Invests $70 Million To Save HBCU Saint Augustine

The Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) removed the HBCU’s membership following significant financial issues, including a $32 million debt and an IRS battle.

It’s been a challenging few years for one of North Carolina’s oldest HBCUs.

Valrie says while his company is based in Florida, the partnership with the university is a “homegrown project.” This means an overwhelming majority of the workforce needed as development happens will come from the Raleigh area.

An Uphill Battle With Raleigh Business Leaders

The investment from outside of North Carolina comes after what Board of Trustees Chairman Brian Boulware says have been roadblocks from Raleigh business leaders.

“At that time, we talked to them probably for four months, asking for their assistance and helping with finance donations and a loan opportunity,” Boulware says. “They said they didn’t really have an appetite for it.”

The deal would have required the land be removed from the university’s name and two board members removed. Business investors would also choose the president of the university and the board chair. The university, however, would receive no revenue share, according to Boulware.

Business Leaders Tell Saint Augustine To Merge With Other HBCU

“One example of our difficulties occurred during a business meeting with influential Raleigh business leaders,” he writes.

“In attendance were a television station owner, a former editor of the local newspaper, a prominent local developer, and executives of another local higher educational institution. After exchanging pleasantries, the owner of the television station stated, ‘Let’s get to the bottom of this: Raleigh doesn’t need two Black universities. We need the two to merge. I don’t care what you call it. However, we need them both on SAU’s property because we need downtown land to expand the development footprint.’”

(Boulware confirmed to BLACK ENTERPRISE that local leaders wanted Saint Augustine to merge with Shaw University.)

“Additionally, the local developer stated, ‘You have no leverage in this situation. You need to consider this as an option,’” Boulware wrote in his letter. “The developer informed us that the Raleigh business community shared similar sentiments, thus limiting our access to financial resources.”

University leaders rejected the proposal, according to Boulware, favoring an “immediate short-term financial solution” to address payroll, student refund compensation, and more.

The short-term fix? Saint Augustine received a $7 million loan from Gothic Ventures, LLP to pay off its debts. The loans have a 24% interest rate and a 2% loan management fee. Martin Eakes, who leads Self-Help Credit Union, called the deal “abusive” and “predatory” in a recent interview with WUNC.

“The question I always had in my mind was, ‘Why wasn’t the university able to go out and secure a loan that covers some of the debt?’” says Valrie. “When you look at it deeper, there wasn’t anybody willing to help the university.”

Where Does Saint Augustine University Go From Here?

Source: Black Enterprise

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