Not-for-Profit, Award-Winning Community News and Views for Windham County, Vermont • Since 2006
Photo 1

Jeff Potter/The Commons

A Democracy Builders banner graces the facade of the former Marlboro College dining hall.

News

Marlboro’s deals with Emerson, DBF await state decision

Sale of college campus by July 31 is a firm condition of the merger; both transactions are under scrutiny by state Attorney General’s Office

Additional reporting by Jeff Potter. An earlier version of this piece appeared in Vermont Business Magazine (vermontbiz.com).

MARLBORO—The sale of the Marlboro College campus, announced on May 28, is moving forward — slowly.

An agreement to “exchange assets” with Emerson College was signed June 26, formally setting in motion the partnership between the two institutions that was announced last fall.

That plan is still subject to regulatory approval, and it is contingent in no small part on the successful sale of the Marlboro campus by July 31, now under a purchase-and-sale agreement with Democracy Builders Fund (DBF), an educational nonprofit that has been attracting scrutiny in its own right.

A statutory review of the deal by the Vermont Attorney General’s Office (AGO) has postponed its consummation into this month, past the original June 30 target date. A State Board of Education (SBE) review of the plans could mean an even greater delay, pushing the formal transaction of the campus and its 533 acres and 52 buildings to DBF until at least July 19.

The college’s trustees decided last November to transfer Marlboro’s academic programs and endowment — $37 million in 2017, according to a 2016–2017 independent audit released by the AGO — to Boston-based Emerson College.

In June, both institutions finalized an agreement for their merger, which they term an alliance. The asset-exchange agreement sets July 21 at noon for the final legal closing of the transaction at the law firm of Holland and Knight in Boston, “or at such other time, date or place as Emerson and Marlboro may mutually agree upon in writing.”

The agreement calls for Emerson to integrate Marlboro’s curriculum into a new program and obligates it to include “Marlboro” in the name. Other details of the Marlboro Institute for Liberal Arts and Interdisciplinary Studies at Emerson College are spelled out in the document.

At that time, Marlboro faculty and students will legally be affiliated with Emerson College. Twenty faculty members are listed on a spreadsheet provided with the agreement, but their names were redacted by the AGO.

On the closing date, a portion of Marlboro’s financial assets will go into a trust to settle the college’s outstanding financial obligations. The balance will be transferred directly to Emerson.

The AGO needs 20 days to review that agreement concurrently with the agreement to sell the campus to DBF.

In a June 29 interview, Marlboro president Kevin Quigley anticipated that the closing for both transactions would take place “in roughly the next month.”

Quigley notified the AGO of the proposed sale on June 2, as required by statute.

“Marlboro and Democracy Builders,” the notice stated, “desire that the Campus Sale be completed as soon as possible prior to the completion of the Emerson Transaction.”

A week later, however, Christopher Curtis, chief of the AGO’s Public Protection Division, put the brakes on.

“Our review of Marlboro’s proposed transactions [campus sale and agreement with Emerson College],” he wrote to Quigley, “necessarily must be reviewed concurrently given their interrelated nature.”

“To that end [...] we continue to request at least 20 days to review both transactions, starting from the time of formal notice of the Marlboro-Emerson transaction.”

“The asset exchange agreement between Marlboro and Emerson was signed on June 26 by both presidents,” Quigley told Vermont Business Magazine, referring to Emerson’s Lee Pelton and himself.

The AGO reported on June 29 that it had received documentation of that agreement, but was uncertain whether that constituted all the documentation needed. The office made the agreement available on July 5, with financial specifics redacted.

In a June 24 email, the AGO stated that, in the transfer of a nonprofit’s assets, “our role is to review whether the transfer is consistent with the nonprofit’s mission and donor restrictions.” Asked subsequently what the office might do if the terms of either transaction were unsatisfactory, AGO chief of staff Charity Clark said simply, “The statute is silent on that.”

Board of Ed approval could take months

While attention has focused on the AGO’s role, the SBE appears to have more power over what happens.

Under Vermont law, every postsecondary school that operates primarily or exclusively in Vermont must “apply for a certificate of approval from the State Board [of Education] prior to registering its name with the Secretary of State [and] ... apply for and receive a certificate of approval from the State Board prior to offering postsecondary credit-bearing courses or programs and prior to admitting the first student.”

DBF founder and board chair Seth Andrew, an entrepreneur best known for founding the Democracy Prep Public Schools network of charter schools, has spoken favorably of operating his Degrees of Freedom program as a branch campus of Emerson. In that case, the foregoing provisions may not apply.

However, the statute also states that every post-secondary school, without exception, “shall secure a certificate of degree-granting authority from the State Board before it confers or offers to confer a degree.”

Apparently recognizing the applicability of at least this provision, the May 28 Marlboro press release announcing the prospective sale stated that “upon state Attorney General and Agency of Education (AOE) approval, Democracy Builders’ Degrees of Freedom program will offer a hybrid degree” combining both high-school and post-secondary studies.

The SBE, which meets only occasionally, functions under the AOE.

It thus appears that Degrees of Freedom will have a longer row to hoe before commencing operations if it operates as a standalone institution rather than a branch of Emerson.

If it finds an application unsatisfactory, “It is within the discretion of the board whether they want to provide feedback on the application or encourage the entity to submit [...] an amended application,” Ted Fisher, the AOE’s director of communications and legislative affairs, wrote in a June 29 email.

The board doesn’t meet again until Aug. 19. Fisher told Vermont Business Magazine that, once it receives the document, “the board has a series of steps to go through to consider the application. Six months is an estimated timeframe,” he wrote.

He added, however, that estimates were difficult to make, since the circumstances are not ones that the board often considers. He stated that his agency hadn’t yet received any application from DBF.

Approached by Vermont Business Magazine for comment on the AOE/SBE role, Andrew wrote in an email that “we have not yet closed on the campus and we can’t speak on behalf of the Agency of Education.”

Nondisclosure agreements

The prospective sale price has been redacted from copies of the purchase-and-sale agreement released by the AGO. The Public Records Act gives the agency wide latitude to withhold private information, including “records relating specifically to negotiation of contracts.”

More broadly, much of the information on the process of selling the property is subject to nondisclosure agreements.

Many alumni, retired faculty members, and local residents have chafed at the level of secrecy.

“There’s never anything official coming from Quigley, because it’s a secret,” retired Marlboro professor Joe Mazur said.

In his interview, Quigley declined to react to the comment.

Skeptics have also objected to the transfer of the college’s endowment to Emerson, a matter that will likely get attention at the AGO, even although the law doesn’t seem to give the office any substantive power to object.

They have also raised the question of DBF’s finances. According to required IRS filings by the nonprofit organization for the year 2016, its net assets totaled only $349,201.

That’s far short of both the assessed value — under $4 million, by one calculation — for Marlboro College’s real estate, and the approximately $5 million that Quigley mentioned, at a meeting last November, as probably acceptable to the college’s trustees in the context of the glutted market for college campuses.

And the purchase price of course still leaves DBF the costs of maintaining the property until academic operations begin generating revenue. Quigley put those costs at $1 million to $1.5 million yearly.

In a June 18 letter, six Marlboro residents accordingly asked the AGO to “thoroughly investigate Democracy Builders Fund to reassure Vermonters that it has a reasonable likelihood of fulfilling its financial obligations under the sales agreement.”

Andrew told The Commons in June that DBF is an umbrella organization for a number of projects and, as such, its filings won’t reflect the full financial context. He has said the combined nonprofits generated “$200 million in revenue in 2016–2017 alone.”

He said he will be able to share a full picture after confidentiality agreements are lifted. The request for proposals for the campus sale required potential buyers to demonstrate their financial capacity, one Marlboro College board member clarified last month.

Quigley dismissed an offer of $4.9 million made in November for the property. He cited a “binding exclusivity term” in an agreement with Emerson, according to David Williamson, a Marlboro alumnus who tendered the offer on behalf of an investor group.

In an interview with Vermont Business Magazine in November, Quigley described the offer, conveyed in an email, as not being “what in most business instances constitutes an offer.”

As outlined in the 78-page “Agreement For Asset Exchange in Support of Marlboro Institute,” released by the AGO on July 1, plans call for the proceeds from the campus sale to go to Emerson.

Emerson “really didn’t want any connection to the campus,” Quigley said.

“Emerson is savvy enough to know that a campus in this rural location and in this market — it’s not just about the money,” he added, alluding to various risks associated with owning the property while managing, as Emerson does, multiple campuses.

The fear “that everything’s going to Emerson — that’s what’s angering people in town,” Mazur said. “It makes many people in town think this is a giveaway that has something of a sinister element.”

Money, accreditation, COVID

A 501(c)3 nonprofit corporation registered in Delaware although headquartered in Harlem, DBF, with its affiliated entities, operates 21 public charter schools, mostly in disadvantaged urban communities.

The intent of its Degrees of Freedom venture is to accept 11th and 12th graders for dual-enrollment programs, offering 13th- and 14th-grade studies leading to an associate’s degree.

Stressing an emphasis on attracting low-income students, Andrew told those attending a virtual meeting of the Marlboro Selectboard June 25 that the program’s graduates “should walk out the doors able to take on a middle-class career.”

If all goes as planned, it will be possible for high-school juniors and seniors to be tuitioned to Degrees of Freedom on a school-choice basis, he said.

He compared the expected yearly cost of enrollment, $9,000, to the yearly bill for educating a student at Brattleboro Union High School, which he put at $17,000.

A classroom teacher by training, he noted his experience in the public schools and brought up his discussions with town school representatives on the possibility of leasing or selling several of the campus’s buildings to Marlboro Elementary School, which has major repair needs.

He said the proposal could be voted on in March, at the next Annual Town Meeting. “It’s not something that we’re just open to — we’re excited about it,” he said.

DBF, he said, intends to launch academic operations in September with about 100 students — many fewer than the 300 that the dorm space could accommodate if it weren’t for social-distancing guidelines, he noted. Actual enrollment of students hasn’t begun, since DBF has yet to buy the property.

The plan, he said, is to bring the students to the area in a dedicated coach on Amtrak’s Vermonter train. They would get off in Brattleboro and then be chauffeured to the campus, where they would essentially live in isolation, with daily temperature checks, for a two-week residency.

As for accreditation, Andrew saw three avenues that would allow a September startup.

One would rely on so-called incubation accreditation, which would require the cooperation of a regional accreditation authority such as the New England Commission of Higher Education.

A second path would be to partner with Emerson, operating as a branch campus.

A third would be accreditation by a national board, such as online schools favor. Education administration platform Edsmart describes this accreditation as decidedly inferior to traditional regional accreditation, particularly in terms of the transferability of credits.

His clear preference was for an Emerson affiliation.

“We hope to work with Emerson very closely,” he told the meeting.

Critics not mollified

The September target date ran into headwinds from attendees concerned about both the accreditation timetable and COVID-related unknowns.

“It feels very close in time to imagine this going off,” said Susanne Shapiro, the town’s health officer.

Andrew responded that the launch of operations would be “guided by science,” and that if so advised by public-health experts, “we won’t start in September.”

In a series of queries, resident Adrian Segar addressed DBF’s fiscal capacity, noting that the IRS had not posted DBF’s 990, a reporting form for nonprofits, for any year since 2016. Andrew answered that this stemmed from a clerical glitch, and that DBF had in fact continued filing the forms.

Resident Amy Tudor described those more recent filings as “paperwork that he could hand in tomorrow” for public consideration. Andrew didn’t, however, offer to present them.

Segar went on to question the modest net-asset total of under $350,000 reported on the 2016 form.

Referring to the costs of buying and maintaining the campus, he asked, “Where’s all this money coming from?”

“Let’s wind up this thread,” Andrew answered. He noted that the working group negotiating the sale “has seen more recent statistics,” and that operations would be financed through philanthropy and student aid in the form of federal Pell grants, for example, as well as by direct tuition payments.

The purchase-and-sale agreement between DBF and Marlboro states that DBF has provided a balance sheet dated April 30, 2020. Andrew declined Vermont Business Magazine’s request for a copy.

Skepticism continues to be expressed outside of select board meetings, too.

In an open letter to the Marlboro College community, resident T. Hunter Wilson, a retired Marlboro faculty member, pointed to Harlem’s Democracy Prep, one of the schools founded by Andrew.

At that school, Wilson stated, “their idea of training students to be good citizens is for them to file silently in uniform from one room where someone is in charge to another room where someone else in charge and to dole out demerits for talking out of turn.”

The school’s 2017-18 student handbook, accessed online, confirms the impression of an institution with far stricter rules than those of public secondary schools — to say nothing of Marlboro College’s very liberal culture.

Asked in an interview if Democracy Prep’s relatively regimented, authoritarian format would be part of the model at Degrees of Freedom, Andrew’s answer was simple.

“No.”

So, what’s ahead?

Marlboro Selectboard Chair Jesse Kreitzer said on June 20 that he and Andrew had discussed holding a community forum on the Degrees of Freedom plan. At the Selectboard meeting, Andrew said, “As soon as the deal closes, we’ll [...] make that happen. It’ll be something I can’t wait to do.”

Given the AGO’s timeline, the closing can’t take place before the third week of July, affording only limited time for such a forum, not to mention all the other preparatory work, in advance of the intended September opening of the new school.

The State Board of Education’s review of the endeavor could apparently push the opening much further into the future.

Discussion at the Selectboard meeting and in the community suggests that Andrew can expect more skeptical questions as to whether his project can proceed as he hopes.

In the meantime, he and up to three associates have been on the campus regularly, sorting through the process of birthing a new school atop the hill that Marlboro College has occupied since 1946.

His approach, as he repeatedly told the meeting’s attendees, is not to sit on his hands.

“We do move fast. We’re innovators. We’re bold.”

Like what we do? Help us keep doing it!

We rely on the donations and financial support of our readers to help make The Commons available to all. Please join us today.

What do you think? Leave us a comment

Editor’s note: Our terms of service require you to use your real names. We will remove anonymous or pseudonymous comments that come to our attention. We rely on our readers’ personal integrity to stand behind what they say; please do not write anything to someone that you wouldn’t say to his or her face without your needing to wear a ski mask while saying it. Thanks for doing your part to make your responses forceful, thoughtful, provocative, and civil. We also consider your comments for the letters column in the print newspaper.

Comments

We are currently reconfiguring our comments software. Please check back if you’d like to read or leave comments on this story. —The editors

Originally published in The Commons issue #569 (Wednesday, July 8, 2020). This story appeared on page A1.

Share this story

Links

0

Related stories

More by C.B. Hall