National News

For Sale: Small Music College, Beloved by Some, Future Uncertain

Posted May 7, 2018 10:16 p.m. EDT

PRINCETON, N.J. — Two decades ago, Rider College was hailed as a savior in the music world when it acquired neighboring Westminster Choir College, a beloved but struggling institution in downtown Princeton. It was vital, Rider officials said, to sustain a storied history replete with students who had sung on the original “Fantasia” soundtrack, and worked with Bernstein and Toscanini.

Rider’s latest plan for Westminster has struck a far more discordant note.

Facing what it says are daunting fiscal challenges, Rider, now a university, hopes to sell Westminster to a for-profit Chinese company for $40 million. Under the proposal, the buyer, Beijing Kaiwen Education Technology, would maintain the choir college’s programs and staff in Princeton, while seeking to franchise the Westminster name.

“It’s like passing on your child to the next parent and saying they can give them a better future than we can give them,” said Gregory G. Dell’Omo, Rider’s president. “Yes, it’s sort of a tough, sad decision, but it’s almost tough love.”

But some Westminster and Rider professors, armed with fresh financial data, question Kaiwen’s experience in higher education. Many have also lost confidence in Dell’Omo, a former human resources executive in the retail industry, who took office in August 2015.

“Rider is not in crisis: that is a pure scare tactic to justify what he wants to do, which is get a windfall of money,” said Jeffrey R. Halpern, a sociology professor and longtime official with the Rider chapter of the American Association of University Professors. “He really epitomizes what we’d call the corporatization of American higher education.”

The existential battle over Rider and Westminster, eight miles apart, comes as many colleges, especially those with only local or regional reputations, confront shrinking demographics and declining government support.

Outside Boston, Mount Ida College, a private college founded in 1899, closed in April. In Pennsylvania, the RAND Corp. just urged major changes or even consolidation at state colleges. In northern New Jersey, Drew University, reeling from credit rating downgrades, slashed tuition by 20 percent last fall, in hopes of boosting enrollment.

For Westminster and its 439 students, the next few months could be the most pivotal yet.

A group of Westminster alumni sued Rider in U.S. District Court in New York in June 2017, arguing that a sale would violate the Rider-Westminster merger. The Princeton Theological Seminary contended in state court in February that the sale would break a promise made by the original donor of the land, to which it could lay claim. Meanwhile, another group of alumni, faculty, parents and donors, concerned about the Kaiwen transaction, just established a new nonprofit, The Westminster Foundation, Princeton, New Jersey, “to ensure the continued existence” of Westminster.

The uncertainty has already chilled interest in Westminster, where annual tuition is $37,650: the incoming class of freshmen and graduate students is expected to be half the normal size of roughly 110, faculty members estimate.

“It’s tough — I know what the college is going through, and there are not a lot of alternatives right now,” said former New Jersey Gov. Thomas H. Kean, who served as Drew’s president from 1990 to 2005, and has been active in efforts to preserve Westminster. “This is one of the best schools of its kind — not just in the state, but the country and the world. To lose it would be a tragedy.” Founded in 1920 in a Presbyterian church in Dayton, Ohio, Westminster relocated to Ithaca, New York, before settling in Princeton in 1932. While it lacks the cachet of New York’s Juilliard School or Philadelphia’s Curtis Institute of Music, Westminster has trained many singers affiliated with the Metropolitan Opera, as well as scores of choral directors and music teachers.

In the early 1990s, though, the college nearly closed in the face of mounting debt, declining enrollment and deteriorating facilities. Along came Rider, a private college which hoped to expand into the arts.

After the 2008 recession, however, Rider’s enrollment fell by 12 percent, before rebounding slightly in 2016. Now, with 88 percent of its revenue coming from students, the university relies more on tuition than its peers, according to Moody’s Investor Service, which revised its outlook for Rider to negative in November, citing the potential effect of the Westminster sale.

“As part of our financials, and our strategy going forward, we cannot make the kind of investments that Westminster needs,” said Dell’Omo, who previously served as president of Robert Morris University, outside Pittsburgh.

Dell’Omo has pushed to incorporate more “higher-demand career” programs, such as computer science and sports management into Rider’s offerings. When he revived a proposal to move Westminster to Rider’s main Lawrenceville, New Jersey, campus, and sell the 23-acre Princeton parcel, irate faculty, students and alumni said the acoustics and intimate milieu could not be replicated.

Rider then approached other colleges — Princeton, Juilliard, Oberlin and the like — about taking over Westminster, but no offers materialized because the choir school may have been “too much of a niche market,” Dell’Omo said. The only viable offers came from overseas, he said, and Kaiwen, a publicly traded company on the Shenzhen stock exchange, had the most impressive plan.

Kaiwen runs two international K-12 schools in Beijing, and has partnered with the Manchester City soccer club and Major League Baseball on sports education. So the company was particularly interested in the Westminster Conservatory of Music, which gives music lessons to children and adults, and Westminster Continuing Education, which primarily runs on-campus summer programs.

“They understand the idea of branding,” Dell’Omo said. One thought is that Kaiwen would start new Westminster schools in other places.

Under the deal, Rider would still run Westminster for the next academic year, and Kaiwen, operating as a nonprofit locally, would honor Rider’s student aid packages. Two consultants based in the United States with experience in accreditation and music education are aiding the transition, and PwC, formerly known as PricewaterhouseCoopers, is vetting Kaiwen, Dell’Omo added.

One of Kaiwen’s top shareholders is Badachu Holdings, a state-controlled enterprise. One person listed as a director at both Kaiwen and Badachu is Xu Huadong, who held leadership positions within the Chinese People’s Liberation Army from 1978-2000.

Kaiwen declined an interview request, saying it was “inappropriate for Kaiwen Education to comment on any pending transactions.” But in an interview with Chinese media in March, Xu Guangyu, Kaiwen’s chairman, a choral singer in college, talked about how Westminster would be “an important part” of a globalization strategy to offer a broad “quality education.” Xu also said that “whether it is our music education resources or our sports resources, everything is shared.”

Chinese companies are increasingly eying education-related mergers following the early, though not sustained, success of Qtone Education Group in 2015. But for Kaiwen, “the prospects of profit are not optimistic” because of the company’s weak revenues,

Rider faculty are even more dubious. In a new report, three current and retired professors, relying on public data, flag Kaiwen’s high debt and negative cash flow, and criticize Dell’Omo and Rider’s board of trustees for “a failure to perform due diligence and carry out fiduciary responsibilities.”

“To claim that Rider is likely to fail or collapse is an absurd characterization of the financial situation of Rider University,” wrote Howard J. Bunsis, a professor of accounting at Eastern Michigan University, in a 28-page analysis of Rider’s finances, commissioned by the faculty union.

On campus, where Westminster’s motto is “spectemur agendo,” or “let us be judged by our deeds,” many students said that they were skittish, particularly if future enrollment plummets.

But Ingrid Clarfield, a longtime professor of piano, said she was cautiously upbeat. After attending a recent Music Teachers National Association conference, she was heartened by educators with experience in China.

“I said, give it to me straight, and they felt this would be a very beneficial move for both Westminster and Kaiwen,” she said. “I really need to believe strongly in this.”