January 21, 2025
The Southern Affiliation of Schools and Faculties Fee on Schools (SACSCOC) eliminated the HBCU’s membership following important monetary points, together with a $32 million debt and an IRS battle.
It’s been a difficult few years for one in every of North Carolina’s oldest HBCUs.
In December 2022, Saint Augustine College was positioned on probation after failing to satisfy accreditation requirements. The Southern Affiliation of Schools and Faculties Fee on Schools (SACSCOC) eliminated the HBCU’s membership following important monetary points, together with a $32 million debt and an IRS battle.
However the HBCU is inching one step nearer to the sunshine on the finish of the tunnel after the Black-owned improvement firm 50 Plus 1 Sports activities invested $70 million to avoid wasting the college.
“We had been launched to the College again in October, and from that very first second, our first assertion was that we wished to assist the college hold its land and be self-sufficient,” Monti Valrie, founder and CEO of fifty Plus 1 Sports activities, tells BLACK ENTERPRISE
Primarily based in Miami, 50 Plus 1 Sports activities is likely one of the nation’s fastest-growing stadium and mixed-use improvement companies. It’s the primary nationwide sports activities financing and improvement agency to require 50% minority and ladies participation in each challenge the corporate funds or companions in.
50 Plus 1 Sports activities and Saint Augustine College agreed on a floor lease: a long-term settlement between a landowner, on this case, the college, and the tenant, which is 50 Plus 1 Sports activities. The settlement permits 50 Plus 1 Sports activities to develop on the college.
Valrie says his firm invested the bottom lease cost upfront, enabling the college to clear its debt and transfer ahead. For the primary 10 years, there’s a 65/35 cut up on income between 50 Plus 1 Sports activities and SAU. Years 11 by means of 99 embrace a 60/40 cut up on income.
“Our estimates at yr 50 are over a billion {dollars} again to the college in income cut up,” says Valrie. “This offers the college the chance to hold out their mission locally.”
Valrie says whereas his firm relies in Florida, the partnership with the college is a “homegrown challenge.” This implies an awesome majority of the workforce wanted as improvement occurs will come from the Raleigh space.
An Uphill Battle With Raleigh Enterprise Leaders
The funding from outdoors of North Carolina comes after what Board of Trustees Chairman Brian Boulware says have been roadblocks from Raleigh enterprise leaders.
In February 2024, Boulware says the varsity requested for monetary help from Durham-based Self-Assist Credit score Union, a nationwide monetary establishment on a mission to “create and shield possession and financial alternative for all, particularly individuals of coloration, girls, rural residents, and low-wealth households and communities.”
“At the moment, we talked to them in all probability for 4 months, asking for his or her help and serving to with finance donations and a mortgage alternative,” Boulware says. “They stated they didn’t actually have an urge for food for it.”
Boulware says the credit score union modified its tune after the college’s land, which sits inside one mile of the Governor’s Mansion, was appraised for roughly $207 million. The credit score union joined different native traders fascinated about loaning the college between $20 and $30 million, Boulware says.
The deal would have required the land be faraway from the college’s title and two board members eliminated. Enterprise traders would additionally select the president of the college and the board chair. The college, nevertheless, would obtain no income share, in keeping with Boulware.
Enterprise Leaders Inform Saint Augustine To Merge With Different HBCU
In a June 2024 letter obtained by BLACK ENTERPRISE that Boulware despatched to college students and workers, he mentioned the challenges SAU confronted with management modifications and monetary standing.
“One instance of our difficulties occurred throughout a enterprise assembly with influential Raleigh enterprise leaders,” he writes.
“In attendance had been a tv station proprietor, a former editor of the native newspaper, a distinguished native developer, and executives of one other native increased instructional establishment. After exchanging pleasantries, the proprietor of the tv station said, ‘Let’s unravel this: Raleigh doesn’t want two Black universities. We want the 2 to merge. I don’t care what you name it. Nonetheless, we’d like them each on SAU’s property as a result of we’d like downtown land to increase the event footprint.’”
(Boulware confirmed to BLACK ENTERPRISE that native leaders wished Saint Augustine to merge with Shaw College.)
“Moreover, the native developer said, ‘You haven’t any leverage on this state of affairs. That you must think about this as an possibility,’” Boulware wrote in his letter. “The developer knowledgeable us that the Raleigh enterprise neighborhood shared related sentiments, thus limiting our entry to monetary assets.”
College leaders rejected the proposal, in keeping with Boulware, favoring an “speedy short-term monetary resolution” to handle payroll, pupil refund compensation, and extra.
The short-term repair? Saint Augustine acquired a $7 million mortgage from Gothic Ventures, LLP to repay its money owed. The loans have a 24% rate of interest and a 2% mortgage administration charge. Martin Eakes, who leads Self-Assist Credit score Union, known as the deal “abusive” and “predatory” in a current interview with WUNC.
“The query I at all times had in my thoughts was, ‘Why wasn’t the college in a position to exit and safe a mortgage that covers a few of the debt?’” says Valrie. “Once you have a look at it deeper, there wasn’t anyone prepared to assist the college.”
The place Does Saint Augustine College Go From Right here?
In response to Board Member Sophie Gibson, the settlement between 50 Plus 1 Sports activities and Saint Augustine would resolve debt, present crucial operational funding, set up a income sharing mannequin that secures universities monetary sustainability for many years to come back, and usher in alternatives for college students, scholarships, neighborhood engagement, and financial improvement past the college and into Raleigh.”
The college is ready for the legal professional basic to approve the 50 Plus 1 Sports activities settlement. The college acquired a letter from SACSCOC on Jan. 15 stating it has 10 days to reply on the sustainability of the college.