About 1:30 p.m. on June 30 a small group of administrators gathered in the office of University of Mobile (UM) President Mark Foley to thank God for what some called a miracle. Ownership of the Latin American campus of the University of Mobile in San Marcos, Nicaragua, had officially been transferred to Ave Maria College of the Americas.
That transaction completed promises made to Alabama Baptists two years earlier by Foley to resolve the problems related to the Latin American campus and to exit Nicaragua by June 30.
Foley inherited the campus and its financial woes when he filled the UM president’s slot in February 1998 following Michael Magnoli’s resignation several months earlier. UM was placed on probation in 1997 by the Southern Association of Colleges and Schools, a regional accrediting agency, because of financial difficulties brought on by the Latin American Branch Campus (LABC) and ventures by Magnoli. The university was removed from probation Dec. 7, 1998, a few months shy of Foley’s one-year anniversary as president.
One of Foley’s first goals as president was to resolve the crisis in Nicaragua, but completing that goal was not easy.
“You have a Baptist college president (Foley) and a Catholic college president (Nicholas Healy of Ave Maria) saying this could not have happened without the direct intervention of God,” Foley said during an interview June 30.
A month earlier Foley had called trustees of the University of Mobile to pray about the transfer. He wrote trustees that the school had “needs beyond our ability to provide.” Nicaraguan President Arnoldo Aleman initially indicated support of the transfer but as the deadline neared, he wavered, postponing necessary actions to complete the ownership change.
Completing the deal
To complete the deal, Aleman would, first, have to appoint trustees to fill vacancies on the Foundation of the University of Mobile for the Latin American Campus (FUMLAC). The Foundation held title to university property on the San Marcos campus even though the university purchased and paid for the property.
After Magnoli left UM, the Foundation became hostile to the university. Several members became inactive, and the Foundation ceased to function.
New trustees were necessary to transfer ownership of the property to Ave Maria College of the Americas.
Second, UM occupied the San Marcos campus under a deed of use issued by the government. Aleman would have to convey to Ave Maria a new deed of use for the property.
“We made it clear to President Aleman that the University of Mobile would not operate the San Marcos campus after June 30 with or without his actions,” Foley said. Ave Maria made it equally clear they would not begin operation without a clear title, he added.
“Instead of losing a strong economic generator, the president chose to support the transfer and sign the necessary papers,” Foley said. Last year, the San Marcos campus generated about $3 million in economic activity. At its peak, economic activity neared $4 million.
Foley said Alabama Congressman Sonny Callahan was instrumental in negotiations with the Nicaraguan leader. “Congressman Callahan has demonstrated that he is a real friend to the University of Mobile,” declared Foley.
Still the deed of use was not signed until the final day, June 30. A week earlier new trustees for FUMLAC had been appointed. They quickly met and took two actions. First, they voted to transfer ownership of the property to Ave Maria College of the Americas. Then they voted to disband.
Ave Maria agreed to pay UM $365,000 for all its sellable assets in Nicaragua. Two buildings comprise the majority of the assets, a faculty house valued at $120,000 and a student services building valued at about $240,000.
In addition, Ave Maria agreed to underwrite any operating loss suffered during the campus’s final year under the direction of UM, up to a total of $1 million. For the first two quarters, the operating loss topped $160,000. Figures for the last two quarters were not available, but Foley confirmed the campus operated at a deficit.
Employee severance
Selling the campus also proved costly in terms of employee severance. Nicaraguan nationals were paid severance benefits according to Nicaraguan law. Three suits, one involving seven plaintiffs, were filed against UM by American employees in Nicaragua. Two of the three suits resulted in negotiated settlements. The exact amounts of the settlements were not released because of privacy agreements, Foley said.
Also, accreditations requirements mandate that UM provide educational opportunities for students nearing the end of their study. Ave Maria has agreed to offer courses necessary for 19 students to earn their degrees with no additional cost to UM. The students will receive UM degrees. To date about 500 students have received UM degrees for study done on the LABC.
Also, UM has agreed to administer the summer school program that runs through mid-July. Foley said the agreement allows the current academic year to end under the auspices of UM. He said a change before the end of the academic year would complicate student financial aid transactions. All costs for the summer school were booked as of June 30, the end of the university fiscal year, Foley explained.
“The transfer of the Latin American campus completes a large chapter in the history of the University of Mobile,” Foley said. “Now we can get back to what we normally do and concentrate on building up the Mobile campus.”
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