Going for Gold

Academy of Art’s new sports program is about spirit, marketing — and the chance to break even more rules.

That notwithstanding, financial questions induce hostility. "Unfortunately, your agenda of searching for 'why a for-profit educational institution would want the financial burden of intercollegiate athletics at the Division II level' is contrary to our current priorities," Williams e-mailed SF Weekly early in the reporting of this article. "Please desist from calling and e-mailing our athletic administrative staff and coaches, as they've been instructed that the story is over."

The Academy of Art's harshest critics respect the school — just as Sherlock Holmes respected Professor Moriarty. "Their business model is miraculous," admits Brad Paul, San Francisco's deputy mayor for housing under Art Agnos. "They've figured out ways to make money no one else has."

While the Stephens family keeps the school's financial data a matter of speculation, extrapolating 11,334 students paying $670 per credit for undergraduates and $770 for graduates produces a figure exceeding $100 million a year for tuition alone. At a recent Board of Supervisors meeting, Paul took the academy's goal of 24,000 future students, multiplied it by a tuition total that included 2 percent yearly jumps over the next decade, and came up with the figure of $479 million in potential annual tuition by 2017. And yet charging tuition in exchange for a college education is not exactly a revolutionary business model. The academy's real genius came in assembling its real estate empire, which both schools and shelters ever-expanding numbers of those tuition-payers.

In 1990 — the year after Elisa Stephens joined the family business — the school's enrollment stood at 1,767 students, who were educated in three institutional buildings. In the past 18 years the head count has jumped six and a half times, while the Stephens family has picked up 29 buildings and leaped headlong into the landlord business. Living in an academy dormitory isn't cheap — a bed in a four-student room runs up to $9,000 per calendar year, while a private room can cost nearly $14,000. Meal plans, by the way, are an additional $4,500.

"They've raped and cannibalized the city's housing stock," bemoans John Bardis, a former San Francisco supervisor and one of the academy's most outspoken critics. Like Paul, Bardis tips his cap to the school's awesome ability to pull in profits. While many of the properties the academy obtained were originally rent-controlled, institutional dormitories do not fall under city rent control laws — and, even if they did, the turnover is constant. Charging tenants above-market rates while cramming several of them in a room generates a formidable revenue stream. And while residential buildings' assessed value is based on their estimated future rent-controlled income, the academy evidently never had intentions of being constrained by rent control. It could easily outbid competitors on its desired properties, confident it would make that money back — and how.

All in all, Bardis sums up the Academy of Art as a "facade" fronting a real estate operation that enables the funneling of vast sums of money — much of it from the state and federal government — to the Stephens family. According to the Department of Education, $88,272,468 in federal grants and loans was paid to academy students in the 2006-07 academic year alone. With this in mind, Bardis laughed when asked why the academy might want to compete in NCAA athletics: "They'd rather people talk about sports than how they're screwing over renters. They're scrambling awful fast to show they're legitimate."

Similar views were expressed by some of the current faculty and students, who saw sports teams and a mascot in a suit of armor as a veneer of normalcy for a school that is decidedly not normal. "It's one more attempt to make the school seem as if it has regular collegiate programs," said one liberal arts instructor, speaking anonymously — "Any kind of public dissent and they fire people right away."

A student who gave her name only as Michelle, since she's in the job market and fears speaking critically of the academy won't look good on her résumé, sees the sports program as yet another financial ploy. "The academy loves its money," she says. "With a sports program, you'll get more people in here. You can't view the academy as a school; you have to view it as a company." That sounded about right to an instructor in the school's fashion department: "The powers that be understand branding and image. In 10 years, the Giants will be playing at Academy of Art University Park."

Granted, not every rationale to join in collegiate athletics may be dollar-driven. Williams sees college sports as a cohesive element for a school lacking even a campus. Elisa Stephens wrote off the whole enterprise as a means to inspire students to live healthier lives: "Nothing promotes wellness, fitness, and better nutrition than having student athletes lead the way," she claimed in an e-mail — a novel concept, considering the millions of students and alums who eat and drink themselves silly on college game days. And, of course, establishing athletics may simply be a vanity issue for an organization with money to burn and a Pinocchiolike desire to be taken seriously as a "real" school.

In addition to repeating Williams' Harvard and Stanford line like a mantra, several coaches summed up the raison d'être of the sports program solely as the fulfillment of the longtime wish of Richard N. Stephens, Elisa's father. That, too, resounds with critics, who note that the academy is not shy about flaunting its abundant wealth. The sports program is "like the $8 million car collection on Van Ness Avenue," says Supervisor Aaron Peskin, referring to the legion of gleaming 1920s- and '30s-era roadsters ostentatiously parked on the ground floor of the academy's school of industrial design. "This is a prestige issue. To me, it's absurd on its face, but, you know, they're running a business. And if this is part of their business model, far be it for a legislator to say they can't have an athletic program."

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