Oakland and lender seek “win-win” rescue for Holy Names University
Holy Names University in Oakland might remain an educational institution if a "win-win" remedy is found to cure the college's financial maladies.
OAKLAND — Holy Names University in Oakland might remain an educational institution if a “win-win” remedy is found to cure the college’s dire financial ailments, city officials and a lender for the property believe.
Several Oakland city leaders have released a letter that urges school officials to work with the municipality and the lender for the property to craft a solution to ensure the site continues as an education center.
“We request your collaboration with us, Preston Hollow Community Capital and other stakeholders to preserve Holy Name’s current site use for the purposes of higher education,” the Oakland city officials wrote in the letter.
Deputy Oakland Mayor Dr. Kimberly Mayfield, Councilmember Rebecca Kaplan, Councilmember Carroll Fife and Councilmember Janani Ramachandran signed the letter.
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“Holy Names University provides vital community needs by expanding access to jobs for underserved communities, providing career opportunities within the university itself, and helping remedy the labor shortage for essential workers, including teachers and nurses in Oakland,” the four city leaders stated in the letter.
The most recent among numerous brutal financial challenges that face Holy Names University was a filing on Feb. 23 that stated the college had defaulted on a mortgage whose collateral is the school’s property, including the land and the buildings on the site.
A $49 million loan for the university site was in default, according to the notice that lender Preston Hollow Community Capital filed at the Alameda County Recorder’s Office. A notice of default starts a process that can lead to the lender seizing the property through a real estate auction and foreclosure on the loan.
Preston Hollow, however, states that its primary goal isn’t to gain ownership of the university property. Lenders often seek to avoid foreclosures because they would prefer not to be the owners of real estate.
“We are currently exploring next steps for the campus, and still believe the highest and best use for the space is to operate as a world-class university,” said John Dinan, general counsel for Preston Hollow Community Capital. “We look forward to collaborating with the city of Oakland and community stakeholders to make this a reality.”
In recent months, Holy Names reached out to about 70 educational institutions to determine whether they were interested in taking over the university’s operations — and financial and debt obligations.
Ultimately, the school narrowed down the field of prospects to four likely candidates, according to Sam Singer, a spokesperson for Holy Names University.
“None of them could take on the challenge,” Singer said.
The financial difficulties for Holy Names University extend well beyond the pressure to cope with the mortgage default on the school’s 56-acre site, according to Singer.
The Oakland hills university campus, which is 65 years old, faces the cost of considerable deferred maintenance and regulatory compliance issues.
“The upgrades could cost more than $200 million,” Singer said. “That means someone would have to come up with about $250 million. No one that we contacted was able to make that pencil out.”
The university’s options have narrowed drastically, especially if another institution doesn’t emerge to take over the school’s operations.
“If another school or partner isn’t found, the property could be put up for sale to the highest bidder,” Singer said.
The four Oakland officials noted that the general plan for the site designates its uses as educational. This sort of designation would mean that a buyer for the property couldn’t simply attempt to build uses such as housing, a shopping center, or an office building on the site.
“We have learned that a variety of stakeholders and other universities have expressed interest in preserving this site for educational purposes and that the lender is ready, willing, and able to support such efforts,” the four officials stated in the letter.
Despite the stated common goals to ensure a top-notch education center continues to operate on the Oakland hills property is a top priority, neither the group of city leaders nor the lender offered precise details for how that might be accomplished.
At present, the primary certainty is the looming shutdown in May of Holy Names University, which began operations more than a century and a half ago in 1868 in Oakland before moving to its current Oakland hills site in 1957.
“We are confident that there is a win-win, amicable solution where we can work with you and your lender to find a successor university and absolve Holy Names University of the debt while providing a better future for the workforce and vital educational programs,” the deputy mayor and the three councilmembers said in the letter to the school.