National News

Rider Reaches Deal to Sell Westminster Choir College to Chinese Firm

Posted June 21, 2018 11:26 p.m. EDT

Rider University on Thursday signed a controversial deal to sell Westminster Choir College, a renowned but struggling institution in downtown Princeton, New Jersey, for $40 million to a Chinese company with little experience in higher education.

But when, or even if, the choir college changes hands remains unclear. Two lawsuits have already been filed by alumni, donors and others challenging any potential sale, and additional lawsuits are likely, according to people involved in the litigation.

With 439 students honing their vocal and music skills on its 23-acre campus, Westminster has a storied history, going back more than 80 years, featuring students who had worked with Leonard Bernstein and Arturo Toscanini and had sung on the original “Fantasia” soundtrack. But financial pressures have always loomed large at the college, which became part of Rider, in nearby Lawrenceville, in 1992.

In recent years, though, Rider, one of the most expensive private colleges in the region, has dealt with its own fiscal stress, with the university relying more on tuition than its peers do. So last year, the university moved to sell Westminster, prompting protests.

Under Thursday’s agreement, the buyer, Beijing Kaiwen Education Technology, would rely on a nonprofit entity to maintain the choir college’s programs and staff in Princeton for at least 10 years, as well as affiliated programs that offer music lessons to children and adults, and on-campus summer programs. And while the $40 million price tag is “subject to transaction adjustments,” Rider announced, Kaiwen, a publicly traded company on the Shenzhen stock exchange that runs two international K-12 schools in Beijing, has pledged to spend another $16 million on capital expenditures over five years.

The agreement was approved by Rider’s board of trustees Tuesday, and a closing date was set for July 1, 2019.

In a statement, Gregory G. Dell’Omo, Rider’s president, praised the agreement for preserving Westminster. And Robert S. Schimek, chairman of the board of trustees, said that the agreement would transfer Westminster to “a partner that can make the necessary investments to continue its legacy, and more strongly positioning Rider to pursue its strategic plan for long-term financial stability and growth.”

Some Rider and Westminster professors have questioned Kaiwen’s credentials, citing the company’s high debt and negative cash flow.

The agreement also faces legal challenges. A group of Westminster alumni sued Rider in U.S. District Court in Manhattan 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.

“All Rider has done is enter upon a Bleak House of 30 years of litigation,” said Bruce Afran, a lawyer who is representing Westminster alumni. “There has never been an incident anywhere in the country where a nonprofit college has become a division of a for-profit company, so we doubt the courts or the New Jersey attorney general will allow a raid on a nonprofit in this fashion.”