Hebrew College will be posting a ‘for sale’ sign on its Newton Centre, Mass., campus soon due to $32.1 million of debt.

The decision was made to sell the campus as part of a deal with creditors to release the school from its debt. The school will begin leasing space from Andover Newton Theological School as soon as creditors set a move-out date, said Rabbi Daniel Lehmann, the president of Hebrew College.

The debt arose from its inability to pay back a $32 million tax-exempt bond the school took out in 2001, Lehmann said. Although the school has been successful at getting the operating budget within reasonable expectations in the two years Lehmann has served as president, the debt was looming from the beginning of his term, he said.

The tuition revenues and philanthropic donations were not enough to carry the school, Lehmann said.

‘From the time I came here, we weren’t going to be able to resolve that amount of debt in any reasonable way,’ Lehmann said. ‘We were convinced we had to get rid of the debt, and we knew we wouldn’t be able to get near that amount in the near future.’

Hebrew College does not carry an undergraduate program. The college is a small, specialized graduate program, in addition to being a community education center for residents. The college educates about 1,500 students and includes a graduate school of Jewish education and a rabbinical school.

The campus consists of one 72,000-square-foot building and was built in 2001 using the funds from the $32 million bond. Hebrew College relocated from Brookline, Mass., and constructed its current campus after buying about eight acres of land from Andover Newton, Lehmann said.

‘We came into a situation where the college grew and moved to a new campus. With the growth in programming and the expense of the new campus, the operating budget and payment of debt exceeded the resources of the college,’ Lehmann said.

Hebrew College recently reached a deal with its creditors that will release the campus from the debt when the building is vacated, either in August 2011 or August 2012. The creditors will decide the exact date, Lehmann said. The college is responsible for marketing the building to sell, but the deal is not dependent on selling the campus.

‘We don’t know who will buy it, we don’t know when, and we don’t know how,’ Lehmann said. ‘Our debt resolution isn’t dependent on the type of buyer or the price of sale.’

When Hebrew College vacates its campus, it will not be traveling too far for relocation, as it has signed a short-term lease with Andover Newton.

‘Andover Newton is about 20 feet away from us,’ Lehmann said. ‘They have extra space now. It’s the easiest thing for us to do. It is not necessarily a permanent movement. We will likely be there for at least three years, during which we will determine whether it’s a permanent solution.’

The Rev. Nick Carter, president of Andover Newton, said he is sad Hebrew College is selling its campus, but he is looking forward to having a closer relationship with Hebrew College.

‘We have joint classes that are co-taught between their professors and our professors. There’s a close working relationship between the schools,’ Carter said. ‘The prospect of them leasing space from us is a natural and easy evolution of our partnership.’

More commuter and online students than previous years have permitted extra space on the Andover Newton campus to be leased to Hebrew College, Carter said. Carter also said the school would be very open to having Hebrew College stay for longer than three years.

‘For us, it’s not just a temporary adjustment, it fits naturally into the evolving vision of our school,’ Carter said.

Although Lehmann said he is sad Hebrew College will have to give up the building, this is a new chapter for the university.

‘My hope is that this sale is going to bring credibility to the school in terms of our taking responsibility for our financial standing,’ Lehmann said. ‘We are now going to move forward with a stronger financial foundation. This is another chapter, and we’re now ready to move forward.’

medelane@syr.edu

Published on December 7, 2010 at 12:00 pm

Contact Meghin: medelane@syr.edu | @meghinwithani