Friday, January 25, 2008

Can you buy a public Community College?

The first company I worked for right out of college was ARCO. At the time, R. O. Anderson was the chairman. He had an interesting attitude about company assets - for the right price, anything was for sale. For my division, that included ARCO's significant position in Oil Shale on Colorado's west slope.

Although everyone knew about Anderson's attitude about assets, it came as quite a shock when he suddenly sold our oil shale project to Exxon. Naturally everyone worried about what they would do once the division's largest project got sold. As it turned out, ARCO was about the only company to actually make any money on oil shale, and we did it by selling out.

I started thinking about this when I heard that SignificantPartners has offered to buy Rio Salado Community College from the district.

A California investment firm is offering at least $400 million to make Rio Salado College the first public community college in the nation to switch to a private, for-profit business.

The firm, SignificantPartners, wants to buy Rio Salado’s online academic operation. That accounts for roughly half of the college’s 62,000 students.

Michael Clifford, the firm’s chairman, said the transaction would provide the Maricopa County Community College District a huge amount of cash at a time when the state is grappling with a billion-dollar deficit.

SignificantPartners would receive an accredited — and growing — local online college that could soon enroll students around the world.

“I’m just a simple entrepreneur,” Clifford said. “When you have an asset that can attract hundreds and hundreds of millions of dollars in capital, why should the taxpayers have to pay?”

The Chancellor has since turned down the offer.

A California investor behind the purchase of Grand Canyon University has his eyes on Rio Salado College, one of the nation's largest online community colleges and part of Maricopa Community Colleges.

Michael Clifford, who grew up in the Valley, is leading a private investment group that has offered at least $400 million for the college's online operation, although such a transaction is highly unlikely. Maricopa Chancellor Rufus Glasper said late Wednesday that the school is not for sale.

Both Clifford and Glasper said they remain open to possible public-private partnerships.

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