St. Thomas is offering $61.4 million to purchase the nearby Town & Country Club golf course in an attempt to upgrade athletic facilities, the university’s Executive Budget Committee announced during a virtual town hall Monday.

“Town & Country is currently considering this offer and reviewing it with their members,” Mark Vangsgard, vice president for business affairs and chief financial officer, said. “The golf course land at Town & Country is about 94 acres so (it) would more than double the size of our campus. It would allow our expanded St. Paul campus to be more contiguous and walkable.”

The Town & Country Club golf course sits on the corner of Marshall and Cretin avenues. The golf course opened in 1893 and considers itself the first golf course in Minnesota.

The bid from St. Thomas was “unsolicited,” according to a communication sent out by a Town & Country Club official, nor has the property been “made available for sale.” Club members intend to review the bid, the message said.

News of the offer was made during a town hall intended to address the university’s financial trouble. The town hall, attended by more than 600 participants, was called to address the university’s below-forecast revenue during the 2021-22 school year due to lower enrollment, which President Julie Sullivan said would not negatively affect staff and faculty’s compensation.

Vangsgard said the university also has been working with Ryan Cos. on pursuing a portion of the old Ford Motor Co. plant at Highland Bridge.

“We are still pursuing a land option at Highland Bridge,” Vangsgard said. “It’s prudent for us as an institution to look at all of our options and understand what they might be.”

Vangsgard said St. Thomas would pay for this through donations, borrowing money from the tax exempt bond market and through $5 million rolling off of the university’s books from “older debt issuances” over the next two to three years.

A participant asked if new land purchased by St. Thomas would be strictly for athletics.

“Athletics might be the short term driver, but it triggers a real long-term strategic evaluation of what we need,” Vangsgard said.

Other town hall questions focused on enrollment and other staff and faculty concerns.

Sullivan emphasized employee prioritization, saying there will be no mass layoffs, compensation or benefit cuts. Leadership is also analyzing potential lower priority activities that can be eliminated to save and reduce workload that employees had taken on due to layoffs in the past two years.

“We are planning to ask our board of trustees to help us with some stopgap funding to ensure that we never take the eye off the ball of rewarding our current employees,” Sullivan said. She went on to say, “we are strong and we will continue to be strong, and we’re going to do it together. But we have to be realistic about the world we’re operating in, and come up with the solutions together.”

The committee also noted the nursing program, the Schoenecker Center and athletics will bring in more revenue to the university.

“Our investments in these priorities are primarily funded through philanthropy and designated funds from our quasi endowment that our board of trustees designated,” Sullivan said. “Our donors are increasingly investing in our priorities. Just since this beginning of this academic year, so since July 1, 2021, we have raised $66 million towards our $90 million goal for this year.”

While the university is on track to have its largest fundraising year ever, the biggest driver of revenue for the university is tuition, which directly correlates to enrollment rates, Sullivan said. The university has been seeing a steady decline in enrollment due to changes in student behavior, such as a decrease in study abroad and an increase in fall semester graduation, officials said.

“This year’s projected total net tuition revenue from all of our sources, grad and undergrad, after our discount rate is $10 million less than it was in the 2018-2019 academic year,” Sullivan said. “The revenues that we thought we would have for the year and the revenues that we built our expense base on have fallen short of what we projected.”

In an effort to patch the wound of decreased net tuition revenue, Sullivan said the university would reduce some non-compensation expenses, delay some capital projects and “sometimes” postpone staff hires but the budget committee has not identified what these things will be.

The university still plans to increase pay for employees but can’t base it on the current inflation rate, Sullivan said.

“We at St. Thomas are currently budgeting a 2% increase for fiscal year 2023 budget,” said Kathy Arnold, vice president and chief human resources officer. “Going forward, our plan is that, as our budgetary position improves, we will continue to invest in our people in total rewards and our retirement plan and tuition remission and our health care benefits and, of course, in our salaries and our pay.”

Because the main problem arises from tuition, Executive Vice President and Provost Eddy Rojas said the university will prioritize boosting enrollment and will hire a new vice president of strategic enrollment management.

“We also engaged a consultant who is a nationally recognized expert in enrollment management,” Rojas said. “His message was: ‘You have a gem with St. Thomas; you just need more people outside of the Twin Cities to know about it.’”

Rojas emphasized that the new two-year residency requirement will lead to higher retention rates and more revenue.

“Over the next five years, our goal is to grow undergraduate enrollments by 21% and graduate enrollments by 15 to 20%,” Rojas said. “Hope is not a strategy. We are not hoping for larger enrollments. We are working towards achieving larger enrollments.”

Scout Mason can be reached at maso7275@stthomas.edu.
Angelica Franaschouk can be reached at fran8528@stthomas.edu.