SPSU, Life U. land deal on shaky ground

Wednesday, April 21, 2004 4:00 AM EDT
E-mail this story to a friend | Printable version



By David Burch

Marietta Daily Journal Staff Writer

COCHRAN - Plans for Marietta's Southern Polytechnic State University to purchase the neighboring campus of financially troubled Life University stalled Tuesday when the Georgia Board of Regents delayed a decision to approve the land deal.

A decision must be made by May 1, or the contract signed between SPSU and Life in November will be void. But members of the Georgia Board of Regents' Committee on Real Estate and Facilities said Tuesday that they still need more time to review the financial details of the deal.

The committee agreed to hold a special meeting before the end of April to decide the matter, but no date has been set.


To further complicate the plans, Life University officials said Tuesday they would prefer to see the land deal fall apart altogether and maintain ownership of their 89-acre campus.

To purchase the land, the private SPSU Foundation agreed to take over Life's $30.7 million in debt and spend $2.7 million a year to pay off the debt.

The foundation would be able to pay about $1.3 million of that amount each year, through a combination of the lease with Life and fees collected from student housing.

That leaves an annual shortfall of about $1.4 million to be funded from other sources.

The University System of Georgia originally had been expected to foot a large portion of that outside money.

But with Georgia's current financial situation and state budget cuts planned next year, the Board of Regents last month instructed SPSU officials to begin exploring other possible sources of money.

At Tuesday's meeting, SPSU President Dr. Lisa Rossbacher said she had found enough money from outside sources to cover the full debt payment each year for the next two years.


Funding includes $500,000 provided by Cobb County government during the next two years and $100,000 from the city of Marietta during the same period. Other sources of funding have been lined up, she said, but Dr. Rossbacher would not say who they were or how much they would provide until the agreements were finalized.

She also said she understands the Board of Regents' desire to carefully review the alternate sources of funding before making a decision.

"Obviously, I am anxious to move this project further, but I certainly understand the board's concerns about its own fiduciary responsibility," Dr. Rossbacher said in an interview after the meeting. "Even though the Southern Polytechnic Foundation has identified resources to cover the first two years of debt service operations for that percentage of the Life campus that we would be using, the Board of Regents has to sign the lease so they have a financial involvement in the transaction."

Committee chair and Board of Regents member Martin Nesmith said the financial liabilities to the university system were too great not to further review the information presented by Dr. Rossbacher before approving the lease deal.

"This is a huge undertaking," he said. "We cannot put this board in a position, or the University System in a position, of having to come up with this money unless we know where it's coming from."

And while the board is willing to examine the deal more closely, Dr. Guy Riekeman, who was named last month as the new president of Life University, said Tuesday he would rather see the May 1 deadline come and go without any lease being signed that would allow SPSU to take over his school's campus.

"In the five weeks since I've taken office, the situations that caused us to sign that contract have changed," he said.

During that period, Riekeman said, Life has raised about $3 million from chiropractors who want to help the school. He also said he expects enrollment to grow from about 1,200 students today to between 1,400 and 1,500 students a year from now and about 3,000 within two or three years.

At one point, Life University was considered the largest chiropractic college in the world, with an enrollment of about 3,600. But it was stripped of accreditation in July 2002 by the Arizona-based Council on Chiropractic Education, which questioned the operation of the school by its founder and former president Dr. Sid Williams.

Riekeman came to life from Palmer Chiropractic College in Davenport, Iowa, a school once considered Life's chief rival and the alma mater of Williams.

"Now we are fully able to pay back our debt," Riekeman said. "We'd like to keep our entire campus intact."

If SPSU were to take ownership of the land, Riekeman said Life would eventually have to find another campus to accommodate the expected enrollment growth once the university regains re-accreditation next year.

"We'd like to work with Southern Poly, but we'd also like to keep our campus intact," he said. "I think it would eventually lead us out of town."

But Dr. Rossbacher said she expects the deal to move forward and be approved later this month.

"I understand that with (Dr. Riekeman) arrival at Life University, some conditions might have changed, but we have an agreement that extends through May 1," she said. "I still believe that we can make this transaction happen in a way that works out best for Southern Polytechnic and for Life University."

If approved, the plan would relieve the chiropractic college of its $30.7 million in bond debt and release it from the expensive upkeep costs for the elaborate campus while allowing Life to continue with its process of rebuilding.

Life would be allowed to lease about 50 percent of the buildings on campus to continue its operations. The lease of about a half-dozen classrooms and office buildings would last for 10 years, beginning July 1, 2004.

After five years, Life would have the option to purchase the buildings it uses, with final ownership transferred to Life after eight years.

The SPSU Foundation expects to pay off the debt by 2026, at which time the foundation plans to donate the former Life campus to the Georgia Board of Regents.

For SPSU, the proposal allows the university much-needed space to expand its academic and athletic programs. A particular need has been in the architecture program where enrollment has increased 65 percent during the past two years.

A new building for the program, opened in April 2002, has already filled beyond capacity.

Areas of the Life campus to be used by SPSU include the gymnasium and other athletic facilities, the student activity center, a current clinic and administration building on Barclay Circle, the "frontier village" and public greenspace.

SPSU aims to begin using its new facilities by the beginning of the 2004-2005 school year.

Newly acquired athletic facilities on the Life campus would also provide more space for SPSU's men's and women's basketball teams, and could allow others sports, like the current club soccer team, to expand to the intercollegiate level.

The existing SPSU gymnasium, located across from the current architecture building, could be remodeled to provide the needed studio space for the architecture program.

dburch@mdjonline.com