Boston Business Journal Story on Montserrat’s Turnaround

September 16, 2013

Stephen Immerman is helping to turn Montserrat’s finances around as its president. Photo Cred: Stuart Garfield

Montserrat draws a path to a solid turnaround
Sep 13, 2013, by Reporter-Mary Moore
Boston Business Journal 

Montserrat College of Art has come a long way from its near closure in 2006 when it was saddled with debt and struggling with declining enrollment.

Montserrat’s enrollment has risen significantly, an expanded board of trustees has added new expertise and deeper pockets, and the college has taken a series of measures to cut expenses and pay down debt that once topped $8 million.

The result of Montserrat’s turnaround efforts is a $72,000 surplus in the 2012-2013 fiscal year, with projections of a $350,000 surplus in the current year, said Stephen Immerman, the Beverly college’s president. As recently as 2009, its deficit was $826,000. “I’m incredibly excited and optimistic,” said Immerman, who joined the college as president in 2009. “That is not to say that I’m not mindful and attentive of the challenges that every small college and university in the U.S. faces.”

A funky art school that started in the 1960s, Montserrat appeared on a watch list of institutions whose federal financial aid was in question due to shaky financials. The U.S. Department of Education data showed that Montserrat was considered not financially responsible in the 2011 and 2010 fiscal years.

Immerman said those scores do not tell the story of a little college that is turning things around. A key part of Immerman’s plan is to grow total enrollment, which has risen to nearly 380 today from 281 in 2008. Immerman has also raised tuition: The school currently costs $35,620 a year for tuition, fees, room and board, up from $30,450 in 2006. And the addition of a new dorm hall in 2009 has boosted Montserrat’s total room and board revenue by about $600,000 a year, Immerman said.

Lee Dellicker, president of Montserrat’s board of trustees, was among those who pushed for the building. Dellicker’s company, North Shore developer Windover LLC, built the project. “I realized that, if Montserrat goes away, my property values don’t go up, so I got involved for selfish reasons,” Dellicker said. “But then you realize there’s something special about (Montserrat). There were a lot of people who said that there’s so much good here — a committed faculty, great programs.”

The dorm hall has been a saving grace and a stumbling block for Montserrat, which took out an additional $6.5 million in debt for the construction. Montserrat had launched an $8 million capital campaign in 2007 for the project, and raised $4 million in the first year, Dellicker said.

Buoyed by that success, Montserrat, which had $4 million in existing debt, took out the construction loan. Then the recession hit. “We felt the second $4 million would be just as easy to raise, but the economy didn’t cooperate,” Dellicker said.

When Immerman arrived in 2009 from MIT, he helped negotiate a lower interest rate on the college’s debt, dropping it to 4 percent from a rate of more than 5 percent. (The college has $6.7 million in debt today.) Immerman also led the consolidation of much of Montserrat’s leased academic space into a People’s United Bank building in downtown Beverly, taking 36,000 square feet there — more square footage than the previous spaces but at a lower cost. Montserrat’s academic, administrative and housing spaces are clustered in buildings in downtown Beverly.

Immerman has increased career services, invested in technology upgrades and asked the faculty and staff to help shave $1 million from the college’s budget, he said. The cuts include a handful of administrative staff positions, he said, but Montserrat also simultaneously hired two professors.

Immerman is focused on what makes Montserrat unique: its small size and personalized attention. Though the plan is to grow enrollment to 500 over the next several years, Immerman realizes there is a delicate balance to be struck. “I’ve never … worked at a place that’s as committed to a set of ideals and outcomes — and one that’s as good at beating the odds,” he said.

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