Courtesy of Saint Augustine’s University
Itâs been a challenging few years for one of North Carolinaâs oldest HBCUs. In December 2022, Saint Augustineâs University was placed on probation after failing to meet accreditation standards. The Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) removed the HBCUâs membership following significant financial issues, including a $32 million debt and an IRS battle.
But the HBCU is inching one step closer to the light at the end of the tunnel after the Black-owned development company 50 Plus 1 Sports invested $70 million to save the university.
âWe were introduced to the University back in October, and from that very first moment, our first statement was that we wanted to help the university keep its land and be self-sufficient,â Monti Valrie, founder and CEO of 50 Plus 1 Sports, tells Black Enterprise.
Based in Miami, 50 Plus 1 Sports is one of the nationâs fastest-growing stadium and mixed-use development firms. Itâs the first national sports financing and development firm to require 50% minority and women participation in every project the company finances or partners in.
50 Plus 1 Sports and Saint Augustineâs University agreed on a ground lease: a long-term agreement between a landowner, in this case, the university, and the tenant, which is 50 Plus 1 Sports. The agreement allows 50 Plus 1 Sports to develop on the university.
Valrie says his company invested the ground lease payment upfront, enabling the university to clear its debt and move forward. For the first 10 years, there is a 65/35 split on revenue between 50 Plus 1 Sports and SAU. Years 11 through 99 include a 60/40 split on revenue.
âOur estimates at year 50 are over a billion dollars back to the university in revenue split,â says Valrie. âThis gives the university the opportunity to carry out their mission in the community.â
Valrie says while his company is based in Florida, the partnership with the university is a âhomegrown project.â This means an overwhelming majority of the workforce needed as development happens will come from the Raleigh area.
An Uphill Battle With Raleigh Business Leaders
The investment from outside of North Carolina comes after what Board of Trustees Chairman Brian Boulware says have been roadblocks from Raleigh business leaders.
The investment from outside of North Carolina comes after what Board of Trustees Chairman Brian Boulware says have been roadblocks from Raleigh business leaders.
In February 2024, Boulware says the school asked for financial assistance from Durham-based Self-Help Credit Union, a national financial institution on a mission to âcreate and protect ownership and economic opportunity for all, especially people of color, women, rural residents, and low-wealth families and communities.â
âAt that time, we talked to them probably for four months, asking for their assistance and helping with finance donations and a loan opportunity,â Boulware says. âThey said they didnât really have an appetite for it.â
Boulware says the credit union changed its tune after the universityâs land, which sits within one mile of the Governorâs Mansion, was appraised for roughly $207 million. The credit union joined other local investors interested in loaning the university between $20 and $30 million, Boulware says.
The deal would have required the land be removed from the universityâs name and two board members removed. Business investors would also choose the president of the university and the board chair. The university, however, would receive no revenue share, according to Boulware.
Business Leaders Tell Saint Augustine To Merge With Other HBCU
In a June 2024 letter obtained by BLACK ENTERPRISE that Boulware sent to students and staff, he discussed the challenges SAU faced with leadership changes and financial status.
âOne example of our difficulties occurred during a business meeting with influential Raleigh business leaders,â he writes.
âIn attendance were a television station owner, a former editor of the local newspaper, a prominent local developer, and executives of another local higher educational institution. After exchanging pleasantries, the owner of the television station stated, âLetâs get to the bottom of this: Raleigh doesnât need two Black universities. We need the two to merge. I donât care what you call it. However, we need them both on SAUâs property because we need downtown land to expand the development footprint.ââ
(Boulware confirmed to BLACK ENTERPRISE that local leaders wanted Saint Augustine to merge with Shaw University.)
âAdditionally, the local developer stated, âYou have no leverage in this situation. You need to consider this as an option,ââ Boulware wrote in his letter. âThe developer informed us that the Raleigh business community shared similar sentiments, thus limiting our access to financial resources.â
University leaders rejected the proposal, according to Boulware, favoring an âimmediate short-term financial solutionâ to address payroll, student refund compensation, and more.
The short-term fix? Saint Augustine received a $7 million loan from Gothic Ventures, LLP to pay off its debts. The loans have a 24% interest rate and a 2% loan management fee. Martin Eakes, who leads Self-Help Credit Union, called the deal âabusiveâ and âpredatoryâ in a recent interview with WUNC.
âThe question I always had in my mind was, âWhy wasnât the university able to go out and secure a loan that covers some of the debt?ââ says Valrie. âWhen you look at it deeper, there wasnât anybody willing to help the university.â
Where Does Saint Augustine University Go From Here?
According to Board Member Sophie Gibson, the agreement between 50 Plus 1 Sports and Saint Augustine would resolve debt, provide critical operational funding, establish a revenue sharing model that secures universities financial sustainability for decades to come, and bring in opportunities for students, scholarships, community engagement, and economic development beyond the university and into Raleigh.â
The university is waiting for the attorney general to approve the 50 Plus 1 Sports agreement. The school received a letter from SACSCOC on Jan. 15 stating it has 10 days to respond on the sustainability of the university.