The College of New Rochelle in New York's Westchester County is trying to raise funds to keep its doors open in the face of mounting debt.
The Catholic college in New Rochelle, N.Y. discovered $31 million in unmet obligations following the retirement of its former controller, according to a spokesman for the school. The debt includes $20 million in payroll taxes not paid starting in early 2014.
Moody's Investors Service withdrew the College of New Rochelle's Ba1 underlying rating in 2014 on $57 million of civic facility revenue bonds issued through the New Rochelle Industrial Development Agency and the Dormitory Authority of the State of New York. Moody's said the withdrawal was based on the college having "insufficient or otherwise inadequate information to support the maintenance of the rating."
Moody's cut the college's rating one notch to Ba1 in 2013 citing "very low" monthly liquidity that provided just 78 monthly days of cash on hand.
In an effort to combat its financial challenges, the College of New Rochelle is auctioning five single-family homes it owns located adjacent to the campus. Real estate firm Madison Hawk Partners LLC has scheduled a one-day live auction on Dec. 14 to try and raise the needed capital. The private school tapped Grassi & Co. to oversee the restructuring efforts.
"We're taking this step to help strengthen the academic institution's financial footing," Ron Eagar, chief restructuring officer and partner at Grassi & Co., said in a statement. "These are non-core assets of the College and we'd rather sell these properties to a user or developer than keep them on our balance sheet at this time."
In addition to the real estate auction, the college announced on Nov. 23 that "generous" donations from alumni and friends of the school will allow it to remain open "for the next semester and beyond." The school's president Judith Huntington stepped down in October, with provost Dorothy Escribano then tapped as interim president.
