GREGORY SEAY | JULY 17, 2014 03:46 PM
HBJ PHOTO | GREGORY SEAY
Beneath a partly blue sky on July 9, moving day finally arrived for The Art Institute of Connecticut, the newest outpost in a national chain of for-profit degree campuses, and the two floors it leased in a twin office tower on Wethersfield's riverfront edge.
But rather than moving in, The Art Institute was pulling out. A work crew loaded dismantled wall panels and other hardware from its expansive third-floor into a semi-less Roadway trailer in Putnam Park's parking lot at 100 Great Meadow Road.
In all, The Art Institute of Connecticut (AIC), through its Pittsburgh, Pa., parent Education Management Corp., invested in cookware and appliances, desktop personal computers and wide-screen graphics workstations, phone sets, office furniture, a new elevator, wall art and other furnishings — expenditures estimated at more than $2.5 million. Much of it was brand new and apparently never used.
AIC and Education Management Corp. (EDMC), which operates 110 for-profit two- and four-year degree campuses nationwide, had intended their Putnam Park campus as a training ground for a new generation of culinary artisans, fashion, web and graphics designers, media animators and retail-trade pros.
But doors never opened to AIC's anticipated 400 students and 35 instructors and administrators, short-circuited by a shower of concerns from Connecticut higher-education regulators about shortcomings in EDMC's balance sheet, curriculum and student-loan default rates. Similar concerns already have prompted five states that host EDMC campuses to investigate its operations.
Regulatory roadblocks
After 10 months, beginning June 2013, of back-and-forth to try and address Connecticut's concerns, EDMC threw in the towel. Ironically, it withdrew its license application from the state Office of Higher Education (OHE) on April 2, one day after publicly traded EDMC announced the layoff of 200 workers across its U.S. campuses and at Pittsburgh headquarters. EDMC also put its flagship Pittsburgh campus on the sales block to raise much-needed capital.
EDMC's failure to win Connecticut's blessings affirms the state's mandate to protect consumers against the backdrop of rising U.S. student-loan default rates at for-profit degree and vocational schools. Defaults at EDMC's biggest unit, Argosy University, have trended upward in recent years, according to federal data.
It also is a cautionary tale to businesses in Connecticut and other states about overeagerly investing huge sums in fledgling operations before all the bureaucratic hurdles have been cleared.
Also left to pick up the pieces in AIC's wake is the town of Wethersfield, which spent months reviewing the institute's classroom-office site plan, even waiving its building-signage standards to accommodate the employer and approving installation of a new elevator. Then there is Putnam Park's owner, who in recent years invested millions in upgrades to attract tenants only to lose one of its newest and biggest.