Driven by Chrysler Building rent, Cooper U. is on road back to free

BY STANLEY WLODYKA | On Wed., March 14, The Cooper Union’s board of trustees approved a plan that would get the school back to full-tuition scholarships in 10 years.

This comes after the elite East Village college decided to start charging tuition in 2014 after 155 years of offering its courses free of charge. The switch was met by an outcry from the community at large — so much so that eventually New York State Attorney General Eric Schneiderman stepped in. Schneiderman brokered a deal that required the school to make a “good faith” effort to return to free.

The plan adopted by the trustees insists on building up a $152 million rainy-day fund before reinstituting full-tuition scholarships, a nod to the bruises Cooper got from running annual deficits for decades.

From a family fortune made in part from glue manufacturing, Peter Cooper’s descendants endowed The Cooper Union with the plot of land underneath the Chrysler Building in 1902. Photo by Stanley Wlodyka

All things being the same, how can an institution go from the brink of financial collapse to piling up a mountain of gold? The hope for a brighter tomorrow would not be possible if not for the saving grace of its most valuable asset: the land beneath the Chrysler Building in East Midtown.

Two years before the crash of 2008, when it still seemed like the real estate bubble would never burst, Cooper was able to renegotiate its lease with the Chrysler Building. As a result, this year, Cooper Union will receive an increase in rent from the Chrysler Building of about $12 million — going from $7.8 million in 2017 to $20.1 million in 2018. The rent then soars by yet another $12 million, to $32.5 million annually, from 2019 to 2027. The honeypot keeps getting sweeter, with additional increases scheduled thereafter.

Even with this new influx of Chrysler cash, it’s not enough to hit the $152 million mark. Cooper, under the leadership of its new president, Laura Sparks, has cut around $9 million a year in administrative costs. Additionally, the 10-year plan to return to free tuition sets increasingly ambitious annual fundraising targets: about $3 million this year, $5 million next year and all the way up to $18 million in 2029.

Critics argue that a decade is too long to wait to return to free, and lament the possibility of prolonging paid tuition, as mandated under the plan, should the school fail to hit the fundraising targets within a 5 percent deviation. Mike Borkowsky, a former trustee, believes that Cooper Union’s reputation is as valuable an asset as any it possesses.

“The longer we delay, the worse it is for the reputation of the school,” he said. “So, you’ve got to balance financial conservatism, the need for stability and sustainability, against the risk to the reputation and the quality of the school.”

Rachel Warren, chairperson of Cooper’s board of trustees, is confident in the plan.

“We are going to put ourselves back on the financial road because this is, at essence, a financial issue,” she said.

And if the fundraising goals are too ambitious, if the targets are too lofty, it is Warren herself, her fellow board members and Cooper Union’s administration that will have to bear the brunt of that burden. Warren believes it warrants the effort.

“This is something that is so uniquely important to the city and to academia,” she said. “We need to figure out how to get this institution back on its feet.”

President Sparks has championed the plan and the Cooper community seems to have heard her rallying cry. The night before the board vote, a new plaque was unveiled in Cooper Union’s historic Foundation Building honoring 1945 art school alum Irma Giustino Weiss. Sparks beamed, “She [posthumously] committed up to $4 million and for every dollar that we raised, we would get a dollar of that match. We had a year to do it. We met the challenge in four months.”

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