How a For-profit Company Might Ruin Westminster
October 18, 2017
October 18, 2017
Though we know little about our proposed buyer, we do know it’s a for-profit entity with no experience in higher ed. We’re told it would form a non-profit to run us. So what’s the problem with that?
A for-profit has to buy something in order for Dell’Omo to sell us. In the press and in public meetings he’s stated he thinks Westminster is worth $40-60 million, but in August said the buyer’s offer wasn’t the highest received. Since we don’t know, I will use $30 million to demonstrate what a for-profit might do and how that could lead to Westminster’s ruin.
When the for-profit buys us, it will create a non-profit. The non-profit will lease or mortgage our land and buildings from the owner—the for-profit. Westminster will have to pay off the mortgage or lease, and that alone might easily add $1 million or more to the cost of operating the College.
What if they place their own CEO over us in the non-profit? They will decide the CEO’s salary. What if it’s $300k? $400k? That’s in line with well Dell’Omo and Fredeen are paid. What if the for-profit sells Westminster its computer services or other services? Westminster will pay the full market value and the money from any those and like everything else, that money will be funneled into the for-profit enterprise. Completely legally.
This leads to the most important question: What if Westminster can’t hold up under these additional burdens? Then the new owner would have no choice but to close our doors and open a business just like it already runs—for-profit high schools that serve foreign students who wish to have a US education. On a property within walking distance of a prestigious University that is already zoned for educational use.
If you think this is unfounded alarmism, please read the linked article, which outlines exactly how this has already occurred here in the U.S.