Greensboro's African American Community Newspaper since 1967
What was at first thought to be a vital financial lifeline is now seen as another major blunder for beleaguered St. Augustine’s University (SAU) in Raleigh, one that could cost the small private historically Black institution the academic accreditation so vital for its survival.
The N.C. Attorney General’s Office has refused to approve a $70 million 99-year land lease deal SAU had reached with Florida-based sports stadium and mixed-use development firm 50 Plus One Sports last year, saying that it had “serious concerns” about the terms of the proposed agreement.
In a Jan. 27th letter from the N.C. AG’s Office, SAU was also told it had not provided sufficient documentation to support the proposed deal, and per the documents that were submitted, there was little evidence of SAU’s “…ability to continue to operate and fulfill its mission if the proposed deal wasn’t substantially improved.
Since the SAU-50 Plus One Sports $70 million proposed land lease agreement involves much, if not all of the school’s 103 acres, state law requires the state Attorney General’s Office to approve the agreement before it can be consummated.
That’s particularly true since SAU is a nonprofit organization.
The proposed deal, if approved, had 50 Plus One Sports paying $60 million to SAU by the end of last year, and then another $10 million by June of this year for leasing most of the school’s property for mixed-use development.
SAU, in turn, was planning to use that money to pay off all of its substantial debt obligations of $32 million to the federal government, various vendors, and pending lawsuits from former employees. SAU also hoped to use part of the deal proceeds as operating funds.
Ultimately, SAU officials had hoped that the proposed deal would show the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) that it had finally gotten its financial house in order and was worthy of having its academic accreditation permanently restored.
Currently, SAU’s academic accreditation is under probationary status, pending further review by SACSCOC at an appeals hearing scheduled for the end of this month. Without accreditation, SAU cannot obtain student financial aid from the federal government.
According to the N.C. AG Office’s letter last week, the SAU property cited in the proposed land lease deal is substantially undervalued at $70 million, when it should be listed at $198 million. It also suggested SAU could lose its nonprofit status if certain issues weren’t fixed.
“That large of a gap raises red flags about the defensibility of the deal,” the N.C. AG’s Office letter to SAU said. “Absent further information or justification from the parties, to ensure that SAU’s assets remain dedicated to a charitable purpose, the deal should be renegotiated to, among other things, reflect the true value of the property being transferred.”
Again, the N.C. AG’s office contends that SAU has not been forthcoming with information about the deal it says is needed for approval. SAU, in turn, says it holds out hope that the deal will be approved by the state. Even so, SAU officials expressed “significant concerns about fairness” on the N.C. AG Office’s part.
“The AG’s Office has the lifeline of the university in its hands,” SAU says.
