Tuesday, 17 September 2013

Family Dollar offers 20 Million to bail out bankrupt Negro College

A business with a precarious relationship to the Southwest Atlanta community it serves is ready to save one of its most storied, but dying, institutions.
Yep, Family Dollar has made Morris Brown College an offer it can't refuse. FD LLC, the discount store's parent company, wants to bankroll the bankrupt institution. And not for pennies on the dollar, either. But for $10 million more than Atlanta taxpayers - by way of Mayor Kasim Reed's office - offered the troubled black college last month.
The Atlanta Journal-Constitutution's Ernie Suggs reports that Morris Brown has submitted to courts a $20 million plan that would make FD LLC a partner in the school's recovery by purchasing some of its property and settling its outstanding debt while it seeks re-accreditation. [Subscription required to view story behind the AJC's paywall.]
The deal, which will be defended in court on August 1, would pay off Morris Brown's creditors to the tune of $7.5 million. Another $7.5 million would be used to pay bond holders of the properties FD LLC plans to purchase - including Middleton Twin Towers dormitory; Jordan Hall; a portion of Herndon Stadium; and a parking lot located between Mitchell Street and Martin Luther King Jr. Drive. The other $5 million would go toward the school's operating costs after bankruptcy, which is key in the school's quest to secure new accreditation from Transnational Association of Christian Colleges and Schools. (Morris Brown lost its accreditation in 2002 from Southern Association of Colleges and Schools due to gross financial mismanagement.)
The proposed deal "means that Morris Brown will be able to get accredited and survive," attorney Anne Aaronson, a spokesperson for the school, told the AJC's Suggs. But apparently Mayor Reed isn't exactly overjoyed, Suggs also reports.
While Mayor Reed says he supports Morris Brown's "best interest," it amounts to a lost opportunity for the mayor's office to wield further control over the redevelopment of the area in proximity to the new Falcons stadium, including the MLK Jr. Dr. corridor. When placed in context with the stalled purchase of Friendship Baptist Church for a proposed $15.5 million, the mayor's rejected $10 million offer to Morris Brown adds up to $25.5 million.
Those who have been waiting to see what would become of the prized, bankruptcy-protected property on the campus of Morris Brown can rest assured that, if this deal is approved, the gentrification of the area will be sponsored, in large part, by the daddy of discount stores. The FD LLC deal could result in the construction of hotels and restaurants, Suggs reports. No word yet on whether an actual Family Dollar would be constructed.
The only thing that could make this proposition more ironic is the protracted battle that many Southwest Atlanta residents have been engaged in to keep Family Dollar from building any more stores in the 'hood.
On the same day the AJC broke the news of Morris Brown's $20 million FD LLC proposal, Fox 5 reported on the growing opposition to a new Family Dollar store proposed for Northwest Atlanta, located only one mile away from one such store already under construction.
While Family Dollar certainly has its share of critics who feel the stores lower the residential property value and attract crime, there must be somebody shopping there, if only for the lack of other viable options. Economic disparity tends to breed such contradictions.
The real question to ask is could this be the new model to sustain America's embattled higher education system? Though Morris Brown is an extreme case, the growing fiscal pinch isn't limited to historically black colleges and universities. Last year, two credit agencies (Moody's Investors Service and Standard & Poor's Ratings Service) downgraded the credit ratings of a combined 35 institutions, including Alabama A&M, Wellesley College, Amherst College, Morehouse College, and Yeshiva University. For 2013, Moody's changed its forecast for the whole sector of higher education (including major research institutions) from stable to negative, the New York Times reported in April.
It's hard to say what a deal like this will do to the cultural cache Morris Brown has left. The former office of celebrated 20th century intellectual W.E.B. DuBois sits on the campus. The ornate home of Atlanta's first black millionaire, Alonzo Herndon, is also located there. And films such as Spike Lee's School Daze were shot on the school's grounds. Morris Brown supporters feared some of that heritage might be lost on the auction block as a result of bankruptcy. Considering its current status as an unaccredited school with only 35 students, a bailout of this magnitude certainly couldn't hurt the institution's rep. But any hope that Morris Brown might return to its former glory without being forced to cave in to creditors, city investors, or corporate interests is pretty much a wrap.


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