Mountain State University is planning to sell the 555,000-square-foot mall it owns in Martinsburg and to get rid of buildings at its Beckley campus to stay financially afloat in the upcoming months, the school’s interim president said during a court hearing Tuesday.
“The board of trustees has approved the general concept of downsizing MSU’s physical plant and using the assets to sustain core activities,” said Richard Sours, interim president at MSU.
“We haven’t put any buildings up for sale yet, but that’s a legitimate possibility. If necessary, we will sell assets as long as they don’t impact the university’s core mission,” Sours said.
Sours spoke during an emergency injunction hearing Tuesday in Kanawha County Circuit Court. Lawyers representing 12 Mountain State University nursing students who are suing the Beckley-based school for breach of contract asked Circuit Judge Tod Kaufman to immediately ban MSU from liquidating its assets and selling its property.
The plaintiffs argued that if Mountain State begins selling off its property, by the time its case goes to trial in February, MSU wouldn’t have any money left to dole out to students suing the school.
The judge ultimately struck down that argument and said MSU could continue to sell its assets.
The university is in dire financial straits following the loss of its accreditation earlier this month. The Higher Learning Commission withdrew MSU’s general accreditation in early July for systemic breakdowns in leadership, program oversight, integrity issues and failing to provide accreditation information to students.
MSU has said it plans to appeal the HLC’s decision on the grounds that the ruling was “arbitrary, capricious and not based on substantial evidence.”
In the meantime, however, Mountain State is facing a tough financial situation and is in the early stages of liquidating some of its assets.
Among those is the Martinsburg Mall, a building MSU owns in Berkeley County.
“If a buyer comes along and offers us a fair price for the mall, we’d be willing to sell that,” said Sours.
MSU bought the 79-acre Martinsburg Mall property at 800 Foxcroft Ave. in 2010. MSU has a Martinsburg campus about a mile away from the Martinsburg Mall off Viking Way.
Mountain State took out a $7 million loan from City National Bank in 2010 to acquire the Martinsburg Mall.
The next year, MSU struck a new loan agreement with City National Bank for $10.2 million to pay off the original bank loan and fund improvements to better equip the Martinsburg Mall to house students, according to records from Berkeley County Clerk John W. Small’s office.
On Monday, the university announced that it was slashing half of its staff as the university braces for a major financial hit through the fall as students transfer and leave the school. No new students will be admitted to MSU, which will significantly impact the university’s bottom line.
Sours also said Mountain State was considering selling off university buildings, including the president’s mansion, “a very big nice house,” that used to belong to ousted MSU president Charles Polk.
Mountain State has a direct debt of $27 million and an overall debt of almost $34 million, which includes operating leases and pension obligations, according to a Moody’s Investors Service report.
In its letter revoking MSU’s accreditation, the HLC said MSU’s financial future was “at great risk” because of the university’s long-term debt, declining student enrollment and revenue, and its loss of accreditation.