Meet the Guy Who Turns Off the Lights When a College Closes

In April 2014, Virginia Intermont College was struggling to keep the lights on long enough to finish the spring semester. The 130-year-old liberal-arts college in Bristol, Va., owed well over $8 million to creditors large and small, including local banks and businesses and many employees. Staff members had to get the president’s permission for any expenditure over $10.

Kathleen O’Brien, an alumna who is president of the Tennessee Performing Arts Center, in Nashville, had recently joined the college’s board and then become its chair. She sought help from a consultant, Arthur J. Rebrovick Jr., who had worked with her on several occasions.

“At that point they had been working hard to accomplish a merger with another school, but they were all coming to the conclusion that they were not going to be able to make it happen,” recalls Mr. Rebrovick, president of Compass Executives, which provides consultants and interim executives, usually for businesses. “They were doing a lot of heavy lifting trying to make it through the end of the year.”

The college held graduation ceremonies — tinged with sadness and acrimony — the first weekend in May 2014. That Monday, Mr. Rebrovick became Virginia Intermont’s interim, and final, president. He was responsible for shutting the place down and paying off as much of the debt as possible, a process that took until this past December.

Mr. Rebrovick talked with The Chronicle about shepherding Virginia Intermont through closure, reckoning with deferred maintenance, and securing new colleges for hundreds of students and a home for 80 horses.

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How did you start?

We had a number of issues to look at. We had no cash. The first thing I did Monday morning, our banks met with us and met with the utility company and made an arrangement so we did not have an interruption of service. The utilities had been very supportive, and they had agreed to keep service on through graduation. But after that, they needed something.

The school was a couple of months behind on payroll. We were able through gifts to catch up for March and April. That did not catch everything up, and there were many ongoing arrangements that we were not able to catch up. And we had to shrink. We had 120 people, I think, when we got there. The first month we went down to 20, and then a couple months later we were down to 10. The first month it was critical that the cabinet members stay there to help transition the students. These people had been under a lot of stress, and they needed to be thinking about their own futures. But I can tell you that crew was incredible.

How many students were left?

There were roughly 300 nongraduating students. Five or six area colleges all worked with us and developed teach-out programs. The next part of that was we needed to get the records somewhere. We talked to the two closest schools, and it made the most sense to move the records to King University [in Tennessee]. There were also 130 years of student records that we weren’t in a position to manage. Over a period of time we went through a very methodical destruction process.

One of the big issues facing us in May was we needed to renew our insurance effective June 1. Through the support of the community banks, we were able to renew the insurance. The fiscal year ended at the end of June, and the board members remained through the fiscal year. The four executive-committee members agreed to stay on, and they’re still there.

One of the more interesting parts of that first month was we owned 80 horses. The equestrian team had just won their 17th national championship the week before, and we had no money to care for those horses. Fortunately, one of the executive committee members said early on, “I think I’ve got a place for them, at Emory & Henry College.” We moved 80 horses, we moved the entire faculty from the equestrian program and all the students, to Emory & Henry. It was a financial transaction. You never get as much as you’d like to have, but it was a fair price, and it allowed us to have some cash flow and cover some expenses. They won another championship in 2015, and they won another in 2016.

You were also working to recover student-aid money the Education Department had withheld because it had questions the college hadn’t answered.

It was about a million and a half. A lot of it was from the fall semester of 2013 and the winter semester. The fall submission had some challenges, so it was just sitting there. And then in the spring semester, other submissions were made, but they were all on hold because we had to go back and correct some earlier mistakes. I had never dealt with a large federal agency, so it was a learning curve.

In the spring of 2016, we received the majority of the payment. There are still a few items out there, and whether we’ll ever be able to complete those last few questions or not remains to be seen. But fortunately the work we put in we got the return on.

The other big asset was the campus?

We had a 30-acre campus. Many of the buildings are over 100 years old, and most of the rest are 50-plus years old. It’s a beautiful campus, but we’ve had a significant amount of deferred maintenance. Over the two and a half years, we probably had 15 serious visitors. We were never able to get them far enough along to make it happen. The biggest concern was the deferred maintenance, but also the front-end cost. That was driven by a couple of numbers. We knew what the appraisal was. We knew what the school debt was. We weren’t expecting to get the appraised value, but we were working hard to get all the debt covered. We put a great deal of effort into keeping the property in good shape, because we knew the only way that we could repay the debt was to sell the property at a fair price.

What’s happened now, there’s been a buyer [U.S. Magis International Education Center, which is owned by a Chinese businessman] who wants to re-establish a similar school there. It’s very hopeful for the community that they’ll have students and faculty back on the campus.

But the sale of the campus was forced by one of the banks?

The banks, and particularly the lead bank, had been very supportive all along. But sometime in the summer of 2016 they advised us that they wanted to try to have this property sold prior to the end of the year. And they had actually served us notice that sometime in December they would go ahead and foreclose.

A couple weeks before the planned foreclosure, we had two parties interested enough to provide us letters of intent. They were not at the price that we wanted, but they were at a price we thought significantly more than the school might bring at an auction on the steps. Just a couple weeks before the auction, we brought a purchase agreement for $5.6 million. It would take some time to close, due to its being a health-care organization that needed some licensing.

The bank, and they had every right to do this, went ahead and moved to foreclosure. I think we were all disappointed in the $3.3 million that they received. And the company that ultimately bought it was one of the two parties that we had been negotiating with. They were prepared to pay more than the bank actually received at auction.

The $5.6 million would not have been enough to retire all of the debt. It would’ve helped, but it was still going to be short. There’s going to be $5-plus-million that’s not going to be able to be paid — to big companies, small companies, community supporters, and many people that touched and supported the organization over the years. That’s the biggest disappointment.

Do you see lessons for other colleges?

When an organization begins to have challenges, it’s very important to understand what’s causing those challenges. Usually it’s not just one answer. Is it the market? Is it the way we operate? The best organizations can someday wake up and the world is upside down for them. It’s too easy to try to keep doing what you did before and try to do more of it, put more investment into it, when in fact it would be very helpful to think outside the box and figure out, What do we need to look like in a couple years?

Except for the emotional tug of not being able to find a buyer for the campus, this has been an enjoyable piece of work. I don’t want the reader to think this is something I would chase to do again, because I’ve been there long enough to where I became attached to the place. But it is a challenge, and we worked it as well as we could, and I think we did a good job.

The challenge was, we couldn’t find a buyer for the property at a reasonable price. That’s the luck of the draw. If we had this property in Nashville, we’d have sold it for a lot of money. Bristol is a great community, but how many people have a need for a 30-acre college campus?

This interview has been edited for length and clarity.

Lawrence Biemiller writes about a variety of usual and unusual higher-education topics. Reach him at lawrence.biemiller@chronicle.com.