SUPPORTERS OF SAU CONCERNED
ABOUT TERMS OF ‘PREDATORY”
$7 MILLION LOAN
By Cash Michaels
Contributing writer
What was at first seen as a financial lifeline, is now being criticized as anything but, by supporters of St. Augustine’s University, as the troubled private historically black institution continues to battle back to solvency.
At issue are the terms of a $7 million loan SAU officials secured last May from a Durham-based venture capital group, Gothic Ventures, which, according to critics, reportedly required SAU to pay a 24% interest rate and 2% loan management fee, in addition to a $75,000 “due diligence and documentation fee.”
And what did SAU have to provide as collateral for the loan? Its main Raleigh campus, and at least 40 other pieces of property on more than 11 acres around the SAU campus. If the school defaults on the loan, which comes due on June 30, 2025, those properties are forfeited to Gothic Ventures.
SAU reportedly has the right to extend the maturity date of the loan until December 31, 2025, and can secure up to $30 million in total.
To say that the terms of the $7 million loan outraged SAU supporters would be an understatement.
Several SAU alumni, along with civil rights activists from ONE Wake, Durham CAN, the Center for Responsible Lending, Save SAU Coalition and members of the clergy, held a press conference in downtown Raleigh Nov. 20th to protest the loan agreement between the school and Gothic Ventures.
Those SAU supporters demanded that Gothic Ventures reduce the 24% high interest rate to just 9%, or waive the pre-payment penalty so that another lender can take over the loan with more favorable terms.
“Saint Augustine’s University’s continued existence rides on achieving an equitable resolution to financial challenges and problems facing the historically Black university that could jeopardize its ability to serve current and future students,” a news release from the protesting supporters stated.
Kip Johnson, founded of Gothic Ventures, said his company reached out to SAU once their financial problems became well known, and officials there responded.
“The interest rate was based on the financial challenges facing the university which included its most recent audit report indicating concerns about the university’s ability to continue operating as a going concern, the lack of audited financial statements for the last several years, historical losses because revenues exceeded expenses, significant outstanding debt, IRS liens on the university’s property, and the suspension of the university’s accreditation,” Johnson wrote in an email to WRAL-TV.
“While we hoped that the government or a foundation or a bank would provide the funds necessary to keep the university open, that did not happen,: Johnson added.
According to published reports, $3 million of the $7 million loan went to satisfying past due and upcoming payroll taxes; almost $2 million to the U.S. Dept. of Education; and the rest to pay off student refunds, several outstanding audits, property insurance and appraisals, among other expenses.
With an upcoming meeting about maintaining its accreditation scheduled for next month, SAU has reportedly instituted deep cuts to its operation to cut expenses by $17 million, including eliminating 67 staff positions, ending under-enrolled programs, and “settling outstanding balances with vendors,” according to a press release.
“While we recognize the seriousness of these financial adjustments, these decisions are essential for safeguarding the future of Saint Augustine’s University and the students we serve,” the release continued.
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WILMINGTON POLICE CHIEF DONNY WILLIAMS
BLACK LEADERS IN WILMINGTON
DEFEND BLACK POLICE CHIEF,
BELIEVE HE’S TARGETED FOR OUSTER
By Cash Michaels
Contributing writer
Black leadership in Wilmington, including the local NAACP chapter and the New Hanover County National Black Leadership Caucus, gathered last week to defend the port city’s first African-American police chief, Donny Williams Nov. 19th, after two former command staff officers of the Wilmington Police Dept. (WPD) alleged harassment and mismanagement by Chief Williams and the department.
Reportedly, a damning third-party investigation confirms some of those allegations, but that report has not been made public as of press time.
Wilmington Black leadership isn’t buying it though, stating that they see a pattern of moves being made to oust African-American officials, beginning with the firing of Dr. Charles Foust, the first black superintendent of New Hanover County Public Schools several months ago.
"Wilmington has not socially (nor) politically healed from 1898," Sonya Patrick, chair of the NHC National Black Leadership Caucus said, . "This is ... racially motivated at the expense of the taxpayers and it shouldn't even be tolerated."
“1898” is a reference to when white supremacists, in an effort to take back Wilmington from African-American economic and political leadership on Nov. 10th, 1898, violently attacked blacks, taking over the city in a coup that has lasted, many say, to present day.
Patrick also noted the resignation of William Buster, the former president of the NHC Endowment.
"We don't want history to repeat itself and we see a pattern here," she continued.. "This is not coincidence. This is a national agenda that is definitely happening here in New Hanover [County] with an attack on our Black leaders."
LeRon Montgomery, president of the New Hanover County Chapter of the NAACP, echoed Sonya Patrick’s warning.
“The NAACP calls for an end to these unwarranted claims about the integrity of Chief Donny Williams’ leadership,” Montgomery said, noting that he has spoken with Chief Williams, and the allegations are not true.
Both Montgomery and Ms. Patrick lauded Chief Williams, and the positive changes, they say, he’s brought to the police department since being promoted to chief in 2020.
One of Chief Williams first actions was to dismiss three white officers who were heard speaking negatively about Black protesters on a recording.
Reportedly, one of the complaining officers about Williams, a retired police captain, received a letter from Wilmington City Manager Tony Caudle, telling him, "the appropriate steps are being taken to address the substantiated claims you brought forward.”
For his part, Chief Williams denied the charges against him, documented where he has been the target of racial slurs by some of his fellow officers, and white officers who resist seeing African-Americans in leadership roles.
“Do we have pockets of racism? Yes. Absolutely. Any large organization is going to have people with different views. I said this back in 2022, and I’m going to say it again: judge our officers by the color of their hearts, not by the color of their skin,” Williams told reporters in his office Nov. 20th.
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