It may take Providence – and appeals between the city of Oakland and a major lender – to save the 155-year-old Holy Names University in Oakland.
After the Catholic college defaulted on a $49 million loan as it prepared to close its 56-acre campus at 3500 Mountain Boulevard, Oakland leaders are urging the school to work with the lender to keep it open, the San Jose Mercury News reported.
The appeal came after the Oakland Hills school announced in December it would close after the spring semester, then defaulted on a mortgage loan last month from Preston Hollow Community Capital, based in Dallas.
“We request your collaboration with us, Preston Hollow Community Capital and other stakeholders to preserve Holy Name’s current site use for the purposes of higher education,”Oakland Councilwoman Rebecca Kaplan, Councilwoman Carroll Fife, Councilwoman Janani Ramachandran and Deputy Mayor Dr. Kimberly Mayfield, a former Holy Names teacher and dean, said in a letter to the school.
They pointed to how Holy Names University has boosted access to jobs for underserved communities, provided career paths at the college and helped remedy a labor shortage for essential workers, including teachers and nurses in Oakland.
The loan default notice, filed on Feb. 23, was tied to the 56-acre Oakland Hills campus that Holy Names has occupied since 1957. A notice of default can lead to the lender seizing the property through a real estate auction and foreclosure on the loan.
Preston Hollow, however, says its primary goal isn’t to gain ownership of the university property. Lenders often seek to avoid foreclosure because they would prefer not to own real estate.
“We are currently exploring next steps for the campus, and still believe the highest and best use for the space is to operate as a world-class university,” John Dinan, general counsel for Preston Hollow Community Capital, told the Mercury News. “We look forward to collaborating with the City of Oakland and community stakeholders to make this a reality.”
In recent months, Holy Names reached out to about 70 schools to see if they were interested in taking over the university’s operations — and financial and debt obligations. Ultimately, the school narrowed down the field to four likely candidates, Sam Singer, a spokesperson for school, said
“None of them could take on the challenge,” Singer told the newspaper.
To compound its financial woes, Holy Names faces more than $200 million in deferred maintenance and regulatory compliance upgrades at its 66-year-old campus. According to Singer, no one contacted by the college could make that pencil out.
“If another school or partner isn’t found, the property could be put up for sale to the highest bidder,” Singer said.
What’s certain is the looming shutdown in May of Holy Names University, which began operations in 1868 in Oakland before moving to its Oakland Hills site in 1957.
The four Oakland officials said that the general plan for the site designates its use as educational. That means a buyer for the property couldn’t simply attempt to build housing, a shopping center or an office building there.
They say they’ve learned a variety of stakeholders and other universities have expressed interest in preserving the campus for educational purposes, and that the lender is “ready, willing and able to support such efforts,” as stated in the letter.
“We are confident that there is a win-win, amicable solution where we can work with you and your lender to find a successor university and absolve Holy Names University of the debt while providing a better future for the workforce and vital educational programs,” the deputy mayor and the three councilmembers said in the letter to the school.
— Dana Bartholomew
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