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New College Out of Money: Teachers Unpaid, Not Teaching

Continued from page 1

Published on February 13, 2008

That purchase was part of then-president Hamilton's apparent strategy to significantly expand the school, which included buying the Roxie Theater business in 2005, but not the building. Hamilton had also lobbied for rights to acquire the former U.C. Berkeley Extension campus in the Upper Market area. Public records describe purchases, sales, loans, leases, and intramural property transfers that seem extraordinary for a small liberal arts school.

During recent months, the school appears to have tried to stay afloat. In mid-July, the school sold its interest in a piece of property near Calistoga in a transaction valued at $1.7 million. Since November, the school has borrowed at least $1 million, most from current and former trustees, using as collateral a former creamery on Valencia that it bought in 2005 for $1.5 million.

On Dec. 13, the school took out a $1 million loan secured by other New College campus buildings from Advance Holdings Participações Ltda., which I was unable to find information about at press time.

The college's seemingly intractable financial situation was recently summarized in a report from the WASC, which has suspended accreditation. "The fragile state of the financial situation leaves the College with few options to continue operations in the near and long term," the report read. "All the property is highly mortgaged, leaving little ability to sell and lease back buildings which would, in any case, be a short-term solution to the cash crisis. Continuing to borrow from individuals and bank overdrafts are a further indication of desperation to meet the basic operating obligations."

Much has been written here and elsewhere about the disastrous effects of New College's previous cultlike leadership structure, in which old friends Hamilton, Peter Gabel, and Millie Henry ran the college as if it were their own personal property. The WASC report made this analysis official, declaring that "many faculty members felt they were living in a culture of currying favor, rather than a culture of accountability with clear faculty rights and responsibilities." Both Molina and trustee Jane Swan told me that the old guard would no longer have a role running the school.

Ironically, and despite its mismanagement, New College seemed to attract significant academic talent because of its professed commitment to preparing students for careers advancing social justice. This is the aspect of New College that is worth saving.

It's now up to San Francisco civic leaders to dramatically expand, or supplant, the current board of directors and provide a complete break from the school's troubled past. This may seem like an obscure story about the travails of a tiny institution. But a human disaster is taking place that should matter to everyone. New College belongs, as a matter of law, to all of us. It is an IRS recognized category 501(c)(3) public benefit corporation, meaning that it is publicly subsidized through tax breaks to provide services the government somehow missed.

If this proves impossible, Molina, Swan, and Knowlton should admit defeat in their efforts to save the school, and help students and faculty get on with their lives and dreams.

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