To: Dr. Steven Rosenstone, Chancellor of Minnesota State Colleges and Universities
From: Gary Gross, investigative reporter and concerned taxpayer
Subject: St. Cloud State

Dr. Rosenstone, It isn’t difficult to picture why being the chief executive of a major system of universities, technical colleges and community colleges is a challenging responsibility. With universities, tech schools and community colleges spread literally throughout the state, it’s virtually impossible to know all that’s happening on each campus.

With over 50 campuses statewide, it’s difficult to conduct proper oversight on each of these campuses. You have to rely on the presidents of each of these universities, tech and community colleges to be people of integrity and vision. In addition to those requirements, it’s a bonus when the presidents make smart business decisions. Unfortunately, That isn’t the case at St. Cloud State.

You already know that enrollment has declined dramatically each of the last 2 years and this Fall’s 5%+ decline means significant budget cuts to offset lost revenue. It is clear that the 2013-14 academic year will mark the fourth consecutive year of declining enrollment and declining revenue. Unfortunately, the enrollment and revenue declines are just the tip of a big iceberg.

I’m certain you’re aware of the renovations being done to the Herb Brooks Center, formerly the National Hockey Center. I’m equally certain you’re aware that the original plans called for the renaming of the building to the National Hockey and Event Center and a $30,000,000 dollar project serving as the southern anchor of a redevelopment project along 5th Avenue ending at an expanded St. Cloud Civic Center.

That’s proof of questionable judgment on President Potter’s behalf. At the same time President Potter was trying to raise $23,000,000 for the National Hockey and Event Center, St. Cloud Mayor Dave Kleis and civic leaders were pushing the legislature to expand the St. Cloud Civic Center. Though they didn’t get the projects included in that year’s bonding bill, they still expanded the Civic Center and Hockey Center.

Eventually, both facilities were renamed. The St. Cloud Civic Center became the River’s Edge Convention Center. With the entertainment-related enhancements dropped from the National Hockey and Events Center renovation, the word Event was dropped from the Herb Brooks Center.

First, it wasn’t realistic to think the University could raise millions of dollars to renovate and expand the Hockey Center. More importantly, it wasn’t wise to think the National Hockey and Event Center could successfully compete with the Rivers Edge Convention Center.

That’s because the Rivers Edge Convention Center has a substantial base of events and loyal clients. They have the flexibility to respond to a wide variety of event sizes and types. That’s before talking about the logistical disadvantages the Brooks Center has as a result of its location and the extensive commitments for hockey and other community events that raise very little in usage fees.

There are dozens of bars, restaurants and hotels within walking distance of the Rivers Edge Convention Center. The closest hospitality facilities to the Herb Brooks Center are over a mile away. With the entertainment-related improvements not being made, the enhanced revenue from events, a key part of the finance plan, won’t materialize. As a direct result of that change in plans, St. Cloud State will have additional expenses but without the revenue stream to cover debt retirement. That means the only option left is to take the money from the academic budget.

However, that isn’t the worst financial decision President Potter has made in support of 5th Avenue redevelopment. The worst financial decision President Potter has made was signing a contract with the J.A. Wedum Foundation for an upscale apartment complex near campus. During a Budget Advisory Committee meeting, a highly placed and reliable member of the SCSU administration admitted that the best that St. Cloud State could hope for was ‘only’ losing $50,000-150,000 a year.

Unfortunately, the first two years the contract was intact didn’t come close to that best case scenario. During the first 2 years of the contract, St. Cloud State paid the Wedum Foundation all the rent it collected plus an additional $2,250,000. Rumor is that the University will ‘only’ lose between $980,000-$1,000,000 this year on that contract.

Sadly, questions raised early in the planning stages about the viability of an upscale apartment complex for SCSU students were ignored by the University. Private property owners were and are furious with the University because they thought the project would hurt their rental income and their property values. These fears have become reality.

I’ve lived in St. Cloud over 50 years. It’s always been a blue collar town for the most part. Student renters aren’t people of great means. Why President Potter thought that he could fill an upscale apartment complex at any time is mind-boggling. It’s beyond puzzling why he thought he could fill the apartment complex with enrollment dropping. Now with declining enrollment, filling an upscale apartment complex is impossible.

That’s before talking about the price escalator clause in the contract, which included a 3% increase each year under the original contract. The renegotiated contract calls for ‘only’ a 2% increase per year.

I could write in detail about other questionable financial decisions (e.g. ISELF, Confucious Institute, Police Services contract, Great Place to Work) and could include discussion of the transcript scandal but I’d need another letter to talk about these fiascoes.

Suffice it to say that there are people who vehemently disagree with President Potter’s statement that the transcript scandal is mostly about late drops and withdrawals. It isn’t mostly about those things. It’s mostly about students’ participation in classes that they did poorly in being completely erased from the online transcript system.

In summation, President Potter’s administration has made many questionable financial decisions, leaving SCSU in a precarious financial position.

Technorati: , , , , , , , , , , , , ,

One Response to “Open letter to Chancellor Rosenstone”

  • Nick says:

    Great article Gary!! Students are looking for the cheapest rental options because most of them are living on student loans. Most students would look for a four bedroom apartment or in the case of houses, a four bedroom or higher (i.e. five, six, seven, ten) ranging from $275 pp/month to $350 pp/month. Potter and Rosentone don’t understand that.

    On a side note, the alumni board invited me to an event where Earl Potter was going to be there, which was close to my parents house. It was scheduled for this Thursday, but then they had to cancel because of low response, which doesn’t surprise me!!!

Leave a Reply