Claremont merger called off, Willamette affiliation still on
The planned merger between the Claremont School of Theology (CST) and Willamette University has been called off, representatives from both schools have confirmed. However, the institutions are continuing their affiliate relationship: none of the joint programs already in place are slated to be cut, CST’s Vice President for Communications Steve Horswill-Johnston said. CST now aims to establish a “branch campus” at Willamette while maintaining its campus in California. The two-campus model will be evaluated throughout the 2021-22 school year for its financial sustainability.
The [CST merger fell through because CST was barred from selling its California property at its market value] by the California appellate court system. In 1957, CST moved from the University of Southern California and bought its current property from [Claremont Colleges], entering into an affiliate relationship. The 1957 agreement allows Claremont to buy back CST’s property for a fraction of its market value (around 10 percent). Claremont offered CST $14 million for its entire campus. CST sued Claremont over this agreement, arguing that a 1980s California law invalidated the old agreement and allowed CST to sell its property at market value. While CST won in the lower court, Claremont appealed and won in the appellate court. According to Horswill-Johnston, the Supreme Court of California declined to hear CST’s case, as they only hear around one percent of all cases. While there is more litigation to come, CST does not see its legal situation changing.
Since it is “not advantageous for CST to sell its property for a tenth of the market price considering its financial situation,” [CST is no longer trying to sell its California property], Horswill-Johnston confirmed. CST President Jeffrey Kuan and CST leadership didn’t know about the restrictive aspect of the Claremont agreement prior to attempting to sell their California property. “The ruling is unjust and it’s especially unjust of Claremont Colleges, considering they have a 4.4 billion endowment compared to CST’s current financial straits,” Horswill-Johnston said.
By 2013, CST had [used up most of its endowment and operated under a deficit] for several years in a row. Under President Kuan, CST established a new strategic plan, of which one goal was to achieve long-term institutional stability. CST’s leadership decided that the only way to achieve that goal was to sell its largest remaining asset, its property, and partner with a university. Beyond reducing expenses, CST saw that a merger would pave the way for dual academic programs and increased student services, which they hoped would boost enrollment. Willamette and CST announced that they were [exploring the possibility of a merger in 2017] and entered into an affiliate relationship, through which the current dual programs were built.
While the merger is now off the table, CST is “moving forward with their plans to locate many of their programs here [at Willamette],” Willamette President Stephen Thorsett said in a statement to the Collegian. While the long-term sustainability of the two-campus model rests on CST’s ability to cut costs, meet an enrollment goal of 400-500 students and raise funds, Horswill-Johnston said that CST and Willamette’s partnership is still strong, and that joint programs might be expanded in the future. CST President Kuan declined to interview when contacted by the Collegian.
“Even though a merger can't be completed at this time, CST's presence here has already led to rich scholarly collaborations and expanded opportunities for students at both CST and Willamette,” Thorsett said.