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Saint Leo University plans to take on Marymount California’s $3.7 million debt.
Courtesy of Saint Leo University
Saint Leo University’s planned merger with Marymount California University hit a roadblock Wednesday when the Southern Association of Colleges and Schools Commission on Colleges, Saint Leo’s accreditor, denied the plan.
The accrediting agency rejected the prospectus for the acquisition because Saint Leo “did not provide an acceptable plan and supporting documentation to ensure that it has the capacity to comply with” SACS’s financial responsibility standard, according to a SACS report.
The denial doesn’t necessarily spell doom for the merger. Saint Leo will try again in March, according to a statement provided to Inside Higher Ed Wednesday.
“While the Southern Association of Colleges and Schools Commission on Colleges did not accept the university’s initial plans for the merger with Marymount California University, Saint Leo leadership remains optimistic that the plans will be accepted once resubmitted in March,” the statement read. “The university is focused on continuing to build a strong case for the value of this partnership, and this news presents a minor delay in our timeline for moving forward.”
Brian Marcotte, president of Marymount California, provided a nearly identical statement Wednesday, adding that Saint Leo will continue "supporting Marymount in its enrollment efforts."
Jeffrey Senese, president of Saint Leo, in an email called the decision a “total surprise,” The Tampa Bay Times reported.
“While the university waits to resubmit the plan, we will use this time to redouble our efforts on growing and strengthening our university, while also supporting Marymount California University in its enrollment work,” Senese wrote.
The university will receive a full explanation of the denial in January, the Times reported. Senese also wrote that the accreditor did not express concern about the university’s financial health.
Saint Leo first announced its intention to acquire Marymount California in July. The two institutions had hoped to close the deal by January 2023; it’s unclear if the setback from SACS will delay the merger or prevent it outright.
Marymount California will effectively donate its land to Saint Leo in exchange for Saint Leo taking on the university’s debt. The California university currently holds about $3.7 million in debt, and the institution is valued at $60 million.
The future of Marymount California may depend on the merger’s success. The small liberal arts university in Rancho Palos Verdes, Calif., experienced significant enrollment declines in recent years and had sought a buyer for some time before coming to a deal with Saint Leo. The pandemic only hastened the search.
“I’ll just be very blunt—[the pandemic] caused some damage in terms of enrollment,” Marcotte told Inside Higher Ed in July. “We know and knew then that we would have to do something definitive to help rebuild after we started back up again.”
Saint Leo has also spent several years looking for a merger opportunity. The Florida-based university previously talked with Iowa Wesleyan University and Wesley College about potentially acquiring those institutions, but neither deal panned out.
