Tampabay: Eckerd College raises millions

ST. PETERSBURG -- The chairman of the Eckerd College board of trustees announced Wednesday that $16.5-million in cash and pledges has been raised in the school's determined effort to step back from the brink of financial disaster.

"The endowment has been rebuilt," Miles C. Collier said during the college's 41st convocation, held in Griffin Chapel to mark the beginning of the academic year.

"Is it a done deal? No," Collier later said in an interview. "But we have either checks in hand or pledges that will mature in three years."

Asked how much cash the college has received, Collier said he did not know, but acknowledged that most of the $16.5-million was pledged. "But some of those pledges are maturing as we speak," he said.

In a related bit of hopeful news, the bond rating agency Fitch IBCA announced Wednesday that a review committee will meet today or Friday to consider raising the college's investment grade from the current low BBB-.

The agency put the college on "watch" recently after news that Eckerd's $34-million endowment had been depleted by about $21-million. The money was spent on various campus projects, including the construction of a new dormitory, but without board knowledge or approval.

Since then, Eckerd has kept Fitch apprised of its fundraising efforts in hopes that the agency will improve the school's grade. That would make it easier for Eckerd to sell bonds, which is also part of the strategy to replenish the endowment.

"We want to act," said Fred Martucci, a managing director for Fitch IBCA. "We don't want to leave them on a watch status for a long time."

News of the depleted endowment two months ago brought the swift retirement of Peter Armacost, who had led the college for 23 years, and J. Webster Hull, the school's chief financial officer. It also badly embarrassed the 52-member board of directors and forced an evaluation of the school's administrative policies.

Since then, the board has taken a much more active role overseeing Eckerd's management.

And it turned, apparently successfully, to its own membership for help in rebuilding the endowment.

"The trustees were responsible for the problem, and the trustees were responsible for the fix," Collier said Wednesday. "We had 100 percent participation by the board."

The college's relatively few and young alumni have not been targeted for fundraising yet, he said. "There was a modest outpouring" from alumni, he said, "but the board saw this as a problem the board needed to address."

He would not identify the large givers, at least not yet.

"When the time comes, we will laud them to the skies," he said. "But at this point they have chosen to share the credit together."

Collier provided this rough accounting of the endowment Wednesday:

$16.5-million has been raised in cash and promised in pledges.

An additional $9-million is expected to come from the belated issuance of bonds that were to have paid for the new dormitory, and from the sale of some or all of the college's real estate assets. He would not comment Wednesday on the timetable or prospects for a sale.

Eckerd has been looking for a way to divest itself of the College Landings real estate development and College Harbor retirement center. The two projects were expected to be moneymakers for the college but instead became financial drains.

The total of $25.5-million is more than was taken from the endowment. The additional $4.5-million, Collier said, is to replace the income that the endowment should have produced.

"It has been a challenging summer," he said. The board's "iron determination" to save the endowment and the school shows "that we believe in this institution. Job One was to save the endowment. I'm very pleased to tell you that we have."

Eckerd's faculty and students got their first look at the school's interim president Wednesday, a man Collier billed as "a change agent."

Eugene Hotchkiss III, 72, spent more than two decades running Lake Forest College in Illinois and will guide Eckerd for about 10 months while school trustees conduct a national search for a permanent president.

Giving the convocation address, he said he did not take the Eckerd job for the sunshine, money or ego, but because he was "excited by its people and traditions."

Eckerd should nurture its spirit of innovation, he said, "where the reputation of the college was built."

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