Tag Archives: UT

State Lost $475,000 in Sale of Home to Steve Jobs’ Shell Company

The State of Tennessee took a bath when it sold the former University of Tennessee Health Science Center chancellor’s home to a shell company set up by Apple, Inc. founder and CEO Steve Jobs, losing $475,000 in the sale.
Further from Marc Perrusquia:
The loss had little to do with Jobs, however, and more to do with a decision to liquidate chancellor housing across the UT system – just as the biggest recession in 70 years was dawning.
“No corners were cut. No special deals were done,” said Chloe Shafer, real estate compliance director for the Tennessee Department of General Services, which sold the home at 36 Morningside Place on behalf of UT.
“I don’t know why they picked the worst time in the real estate market.”
More precisely, the decision came in 2007, shortly before the housing bubble burst. The UT Board of Trustees decided that providing homes to campus chancellors had become too expensive.
“There’s a better use for those dollars. That was the general feeling,” said Charles M. “Butch” Peccolo, UT chief financial officer.
In the process of trying to sell the chancellor’s home in Memphis, the market crashed. Yet the state stuck with the decision to liquidate the home even as bids failed to materialize and a series of appraisals showed its value plummeting, according to records maintained by the Department of General Services in Nashville.
The state bought the home for $1,325,000 in 2005 when Alice Owen, wife of then-chancellor Bill Owen, complained about a previous house that served as the chancellor’s residence.
After the Owens moved into 36 Morningside, they used more than $28,000 in tax dollars on improvements including $4,500 for an interior decorator consultation, $4,500 for a plasma TV, and $11,854 in shelving, lighting and rewiring. Much of the spending didn’t follow UT’s protocols, and Owen subsequently reimbursed the school.
An appraisal in October 2007 valued the home at $1.3 million. The home’s estimated value fell to $1.1 million in a subsequent appraisal in October 2008.
Over time, offers came in for hundreds of thousands less than the state wanted. Deals fell apart. And the market continued to plummet.
Then in early 2009 the state was contacted by George Riley, a Los Angeles attorney who represents Apple. In a span of eight days that March, Riley signed a sale contract with the state and helped set up a shell company, LCHG, LLC, that would protect Jobs’ privacy. On March 26, 2009, the firm closed the deal, buying the home for $850,000 “as is.”
“We always knew it was a law firm and they were buying the property for someone else. But we didn’t know who they were buying it for,” Shafer said.
Peccolo, the UT financial officer, said the decision to liquidate chancellors’ residences affected only the Memphis and Knoxville campuses. The home at UT-Martin was on campus and was converted to an alumni house, and the one at UT-Chattanooga is owned by a foundation, he said.
The state still is trying to sell the UT president’s home in Knoxville, an 11,000-square-foot home with a tennis court on 3.4 acres. Appraisals on the property have fallen from as much as $3.75 million in 2009 to $2.15 million this year.

Haslam’s Higher Ed Top-to-Bottom Review Begins at Top

Gov. Bill Haslam has sent an invitation to members of the UT Board of Trustee, the Board of Regents and others sheds for a meeting next week that will launch his planned review of higher education with an eye toward some sort of changes, reports Richard Locker.
“Governor Haslam is kicking off his review of post-secondary education in Tennessee by convening higher education and business leaders from across the state. The meeting will also feature presentations by three leading higher education policy experts and the Governor will moderate discussions after each presentation,” the invitation says.
The governor’s press office said Monday that the invitation list also includes the top administrators of the two college and university systems, the Tennessee Higher Education Commission, the Tennessee Independent Colleges and Universities Association (which serves 35 private, nonprofit institutions), the two speakers of the state House and Senate, the chairmen of the House and Senate finance and education committees, and officers of the Tennessee Business Roundtable and Tennessee Chamber of Commerce. The meeting will run from 10:30 a.m. to 2 p.m. at the governor’s residence.
Haslam has said that topics he wants to explore include higher ed financing, construction needs and “governance” — the administrative structure of the two college and university systems and the campuses themselves. That includes, he has said, greater autonomy for the University of Memphis within the Board of Regents system.
And while state appropriations for K-12 public education have steadily increased during the recession, they have actually declined for higher education, including another 2 percent cut in general appropriations for the upcoming school year. As a result, tuition and fees have steadily increased as students and their families have picked up an increasing share of the costs of their college educations. Through the mid-1980s, the state paid about 70 percent of what its public colleges and universities cost to operate. By the 2011-12 school year, the state’s share was down to 34 percent for the universities and 40 percent at the community colleges, according to the Tennessee Higher Education Commission.
From 1993, when many of last year’s college freshmen were born, through the last school year, tuition and mandatory fees paid by in-state students on the state’s public campuses rose by an average 340 percent. Over the last two weeks, the two governing boards have approved tuition and fee increases of 8 percent at UT Knoxville, 7 percent at the U of M and several other TBR schools, and between 4 and 5 percent at community colleges.

UT Students Want Chancellor to Forgo $22,000 Pay Raise

KNOXVILLE, Tenn. (AP) — An online petition from students is pressuring the chancellor of the University of Tennessee’s Knoxville campus to forgo a raise of more than $22,000.
The university president on Friday defended Chancellor Jimmy Cheek’s nearly $400,000 salary as below the median for leaders of similar colleges.
By midday Friday, there were 860 signatures on the petition at www.change.org, a website that allows people to create online petitions seeking social change. The petition was started by Andrew Doss, an electrical engineering student from Goodlettsville.
According to WVLT-TV (http://bit.ly/NcPgE8), the tuition increase to be paid in the fall will average about $289 while Cheek’s raise is $22,356.
Tuition went up 12 percent for UTK undergraduates in 2011, and trustees just approved another hike of 8 percent to take effect with the fall semester.
Brandon Brackman signed the petition and said he’s fortunate to have scholarships and grants to continue at UT for another year.
He added, “But I have friends who rely on loans and on the sweat off their backs. This is making me bitter and jaded about the state of higher public education. Something needs to be done.”
Lisa Dicker also signed and wrote, “As a student who works two part time jobs and maintains a 4.0 GPA, this increase in tuition as a benefit to my education is insulting. Jimmy Cheek accepting another pay raise just adds to my increasing loss of faith in our administration.”
UT President Joe DiPietro said in a statement that Cheek’s raise was based on performance and his compensation is appropriate.

Higher Ed to Get Haslam Top-to-Bottom Review

Gov. Bil Haslam told University of Tennessee trustees Thursday he wants to spend the coming months examining the cost of college and ways the state could help make it more affordable, according to the News Sentinel.
“This is a critical time around higher education. I think we all know the status quo will not hold,” Haslam said during his remarks to the board. “The old model of higher education, I think everyone is saying — from academic circles to business circles across the country — that it won’t look the same 10 years from now.”
His comments at the annual board of trustees meeting were followed with a unanimous approval of an 8 percent tuition increase in Knoxville and a plan to require full-time students to pay for an additional three credit hours each semester.
The new tuition model, which would go into effect in fall 2013, requires all new full-time students to pay for 15 credit hours instead of the current 12 hours.
Though Haslam reiterated the need to keep college costs reasonable, the governor also expressed support for Knoxville’s plan because it “makes sense” academically and financially.
“For parents and families paying for education, the sooner you get out the better it is for that family,” Haslam said before the meeting. “The longer you are in school the less chance you have at graduating. If we can keep people on that schedule to graduate in four years, that would raise graduation rates, which is one of our big challenges in the state.”
As part of a new initiative to zero in on higher education issues, Haslam said he also wants to look at workforce development, which would include touring the state to hold round tables with community, business and education leaders to ensure students are prepared for the jobs available.
Part of the task ahead, Haslam said, is creating a culture change in a state that undervalues education.
“We have to do a better job of defining what reality looks like. What does it look like now not to have a high school diploma? What does it look like not to have a two-year or four-year degree in terms of your future?” Haslam said. “I think the heightened awareness will be good for us as a state”
He also wants to hold a summit in Nashville next month with legislative leaders, the Tennessee Higher Education Commission and members of both the UT trustees and the Tennessee Board of Regents to “kick start” his initiative.
The governor indicated he wanted to work on the cost side of his plans in time for the legislative session.

UT Tuition Increases Will Range from 4% to 8%

Students in the University of Tennessee system may pay 4 percent to 8 percent more in tuition this fall, depending on their school, reports The Tennessean. The system’s board will vote Thursday at the members’ annual meeting in Knoxville.
President Joe DiPietro said the Tennessee Higher Education Commission recommended increases of 4 percent to 6 percent for UT-Martin and UT-Chattanooga and 6 percent to 8 percent for UT-Knoxville. Part of the increase will fund a 2.5 percent raise for faculty, who went four years without any pay increases until last year.
DiPietro told The Tennessean’s editorial board that UT-Knoxville lags far behind peer institutions in salary, and attracting and retaining the best professors will help it move toward the goal of being in the nation’s top 25 institutions as ranked by U.S. News & World Report. UT-Knoxville came in at 46th among public schools in the most recent issue. Its in-state tuition, $8,400 per year, is well under all but two top-25 schools, DiPietro said.

UT President’s Home Unsold, Even at $2.5M Bargain Price

The Knoxville house that five former University of Tennessee presidents called home has sat empty for more than two years since being put up for sale in March, 2010, reports the News Sentinel.
The listing price of the 11,400-square-foot house was cut nearly in half a year after the property was put on the market — from the original $5 million asking price to the current $2.9 million price tag.
The home is on the list for discussion during the University of Tennessee’s Board of Trustees Finance and Administration Committee meeting at 3:30 p.m. June 20 in the Hollingsworth Auditorium on the Agricultural campus. The full board’s meeting will take place the following afternoon at 1:30 p.m.
…The university spends $25,000 annually to maintain the home and its three-acre waterfront property.
Stafford said the university will continue to maintain the house and “any further determinations will depend on discussion by the committee.”
Real estate agent Jim Ford, with Coldwell Banker Wallace & Wallace, said he has shown the house to 24 interested “lookers” — most of whom were local to Knoxville — since the house went on the market. He has had two offers in the past two or three months, neither of which the university accepted.

Alexia Poe Deemed Distinguished

Alexia Poe, director of communications for Gov. Bill Haslam, will receive the 2012 Donald G. Hileman Distinguished Alumni Award at the spring commencement ceremony for the University of Tennessee College of Communication and Information.on May 10 in Thompson-Boling Arena.
The Donald G. Hileman Award is named for the first permanent dean of the College of Communications, the forerunner to the College of Communication and Information. The award was established in 1994 in celebration of the college’s 25th anniversary. It is awarded to college alumni who have made notable contributions to the field of communication and information.
(lifted from the News Sentinel)

UT Cuts 17 Athletic Department Jobs

KNOXVILLE, Tenn. (AP) — The University of Tennessee is eliminating 17 full-time positions in the athletic department as part of a reorganization designed to save about $2.5 million.
The school said in a news release Monday that the previously separate men’s and women’s athletic departments will be consolidated.
The 17 positions will be dropped effective June 1, saving $1 million. A school spokesman did not return a phone call asking how many full-time employees will be left in the department.
The university said it will also save some $850,000 by eliminating unfilled positions, resignations, retirements and other terminations. It said another $625,000 will be saved through reductions in the number of student employees: managers, graduate assistants and interns.
“It is important to note, however, that none of the financial decisions made will have a negative impact on the competitiveness of our individual sport programs,” the news release said. “If anything, an efficient and financially sound athletics department will rise to meet the needs and challenges of our sport programs and their student-athletes in a more effective manner.
“These decisions will not cut into the fiber of our pursuit of comprehensive excellence.”
The school said consolidating the men’s and women’s departments is designed to provide “a clear direction.”
The statement from the university said the school has more employees in the athletic department than those at peer institutions in the Southeastern Conference and elsewhere. It also acknowledged that some functions in the past had been duplicated.
The restructuring plan has been studied for several months.

House Signs Off on Secrecy in Selecting Higher Ed Presidents

NASHVILLE, Tenn. (AP) — The House has approved a bill to make the names of applicants to lead public colleges and universities confidential.
The chamber voted 79-12 on Thursday in favor of the measure that the bill’s sponsor, Republican Rep. Gerald McCormick of Chattanooga, said he introduced on behalf of the University of Tennessee’s board of trustees.
McCormick said the bill would encourage more candidates to apply for the jobs without fear of hurting their current employment. The names of the three finalists would become public at least 15 days before a decision is made about who gets the job, up from seven days in the original version.
The Senate would have to agree to that change before the measure can head for the governor’s consideration.

Applicants for Top University Jobs to Become Confidential

The names of those applying for the top jobs in Tennessee’s colleges and universities could be kept confidential unless they become a finalist under legislation poised for final passage today.
House Majority Leader Gerald McCormick, who is sponsoring the bill (SB3751) at the behest of officials with the University of Tennessee and Board of Regents systems, said that confidentiality could lead more highly-qualified people to seek jobs as university presidents and college campus chancellors.
But House Minority Leader Craig Fitzhugh said the present laws making the names of applicants public has worked well, as evidenced by the administrators now in place at state campuses.

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