Report: Construction contract with president’s forged signature will cost Bethune-Cookman $300 million

REPORT-CONTRUCTION-CONTACT-Report: Construction contract with president’s forged signature will cost Bethune-Cookman $300 million

A controversial dormitory project which has landed Bethune-Cookman University (B-CU) in the crosshairs of angry alumni in and around Daytona Beach will apparently cost the university more than $300 million over a 40-year payment agreement and was executed with the forged signature of school President Edison Jackson.

The residence hall, which some graduates criticized for its $72 million publicized sticker price, actually cost more than $85 million to build and will eventually amount to $306 million with financing requirements, according to the Daytona Beach News-Journal.

Among the more startling elements of the report:

The deal is structured so that B-CU’s monthly payments on the dorm will increase by 1.5 percent annually over the life of the lease from a low of $470,000 a month to a high of about $840,000 — or about $10 million a year. Financial documents also suggest that the school is already struggling to make these payments and has been deferring some.

  • B-CU, meanwhile, is scrambling to find money to keep its operations going. Last year, the school’s operating cash flow was a negative $7.8 million. And just last month, Jackson thanked the board for approving a drawdown of $10 million from earnings on its endowment, a restricted investment account.

The story also outlines de-tails of the school’s lease and sublease agreement with TG Quantum, which was selected over proven vendors without a history prior work, and was cleared to buy land from B-CU for the purpose of leasing it back to students at more than $450,000 in monthly rent. The costs were to be covered by student housing fees, which were approved for a three percent increase last fall, and by an approved three percent tuition increase set for the 2018-19 academic year.

University officials confirmed the numbers but also suggested that the school is on sound financial footing despite a credit downgrade and the $10 million drawdown on its endowment.

“Under President Edison O. Jackson’s leadership, the university has materially improved operating results in 2017,” B-CU Chief Operating Officer Albert Mosely said, pointing to the most recent Fitch ratings report that downgraded its credit rating but also said the school had a stable outlook going forward. “We expect to maintain and slowly grow our financial resources over time.”

 

 

About Carma Henry 24363 Articles
Carma Lynn Henry Westside Gazette Newspaper 545 N.W. 7th Terrace, Fort Lauderdale, Florida 33311 Office: (954) 525-1489 Fax: (954) 525-1861

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