CAZENOVIA — During the Jan. 3 Village of Cazenovia Board of Trustees meeting, Mayor Kurt Wheeler updated the board on the ongoing discussions regarding the future of the community without its historic college.
On Dec. 7, Cazenovia College announced its decision to permanently close following the spring 2023 semester due to financial difficulties.
According to the college, the financial challenges facing the institution have included a shrinking population of college-aged individuals; skyrocketing inflation; decreased enrollment and increased expenditures during the global pandemic; and recent uncertainty in the bond and stock markets, which made it exceedingly difficult to refinance its bond debt.
The college defaulted on a $25 million bond after failing to pay the amount due in September.
“They had every intention of refinancing that bond debt and had hired highly qualified people to assist them through that process,” said Wheeler. “Right up until really a few weeks before that payment came due, they were being assured, ‘Oh yeah, no problem, we’ve got this; this is a routine transaction.’ Of course, in the past year, the US bond markets have just gone [into complete] turmoil. . . They went into forbearance, basically where they were given kind of a grace period to sort it out, and unfortunately [at the beginning of December] announced that they did not have a solution.”
Wheeler reported that the college has been proactive and a great partner and communicator since announcing its decision to close.
“They have been very transparent with us,” Wheeler said. “As soon as they get information, they have been sharing that with us. They are very attuned to the impact that this is going to have on the village and our broader community. I appreciate their partnership in working through this extremely saddening event.”
Two days after the closing was announced, a group of local leaders convened to begin working towards the goal of developing a clear vision for what post-Cazenovia College use(s) of the campus will have the greatest long-term positive impact on the community.
According to the mayor, who organized the meeting, the group’s membership includes local government officials and residents with expertise in finance, real estate, higher education, and other areas.
Wheeler said the committee met a second time right before the holidays and would likely meet again in a week or so. He also said he and Lauren Lines, executive director of the Cazenovia Area Community Development Association, were scheduled to meet with Cazenovia College President David Bergh on Jan. 5 to receive the latest update from the institution.
The mayor explained that the committee’s current efforts are focused on convincing the bondholders that it is in their financial interest to work with the village and the community to get the highest return on their investment.
“If they just have a fire sale and sell off the assets without a lot of forethought, they are going to get minimal return on that investment,” he said. “The college is worth far less piecemeal than it is obviously assessed as an educational institution. The investors are going to lose a lot of money if they do that. We are trying to convince them that their best return on that investment is to be a little bit patient and work with us and have us help them find the [best] use for those properties. It’s certainly good for the community, but they don’t think in those terms. They are investors; they are there to see a profit. We have to basically articulate to them that it is in their financial interest to work with the community.”
Wheeler also reported that Lines is doing research to help put together a planning document for potential investors that will lay out the key information on the current situation, including the assets, the zoning, potential uses for the properties and the impact of the college among other considerations.
“For someone who is a potential investor, all the information they’d need to make a good decision would be all in one place,” Wheeler said. “We are going to look at getting some professional help. A lot of the information is stuff that we already have, and it’s a matter of putting it together in a helpful way. We are also looking through a number of other scenarios of how to protect the community’s long-term interests.”
Wheeler also said he believes the bondholders would never want to “take the keys to the college” and own it, so they will likely want to have a plan in place for what they are going to do with it before the college ceases operations.
“It’s a fairly short timeline,” he said. “For them, this is an investment that is not returning anything, and as soon as it ceases functioning as a college, it becomes a detriment to them because now they are on the hook for maintenance, maybe for taxes, for who knows what.”
Wheeler concluded his update by stating that there has been a tremendous response from the community in terms of people reaching out, remaining positive, and offering their assistance and encouragement.
“Unfortunately, this is a situation that the village didn’t have any control over,” he said. “All we can really control is our response to it. I think, so far, the community has really stepped up . . . We are going to just do our best to work together as a team and see the best possible outcome for the community.”
In other news
The board officially permitted Cazenovia Children’s House (CCH) to hold the Chilly Chili 5K Run/Walk on village streets on Sunday, Jan. 22, starting at 1 p.m.
CCH is an early learning and childcare center that serves families in the greater Cazenovia area. The annual Chilly Chili race, which is typically held each January, is the organization’s biggest fundraiser.
Wheeler said the race will follow the traditional route beginning and ending on Liberty St.
The Village of Cazenovia Board of Trustees typically meets on the first Monday of each month at 7 p.m. in the Village Municipal Building, 90 Albany St.