Rider University has announced that it and a Chinese company have abandoned a plan to sell Westminster Choir College and its Princeton campus to the for-profit company. Kaiwen Education Technology also announced that its board voted unanimously on June 28 to cancel the deal, which would have been an unprecedented transfer of a nonprofit higher education institution to a foreign for-profit company.
The failure of the deal means that Rider is returning to an option it explored in 2016 — only to be met with resistance from students and faculty: moving Westminster Choir College to Rider’s main campus in Lawrence. Around the same time, Rider, trying to rein in costs amid budget shortfalls, also floated the controversial prospect of selling the Westminster campus.
“As an alternative, Rider’s Board approved a plan that would integrate Westminster Choir College into the university’s existing Lawrenceville campus beginning in September, 2020. Rider will continue to operate Westminster Choir College, the Westminster Conservatory, and the Westminster Continuing Education programs in Princeton during the upcoming 2019-’20 academic year,” Rider stated in a press release.
Rider and Westminster have been linked since 1992, when Rider agreed to operate the financially struggling Westminster Choir College. But by 2017 Rider wanted out of the merger, saying the institution had been consistently losing money. Rider began a search for buyers, but found no other institutions of higher learning willing to take over Westminster.
Instead, in the fall of 2017, it struck a preliminary deal with a Chinese company to buy the school for $40 million plus a promise to invest $16 million in educational programs and infrastructure. Kaiwen, which operated two for-profit secondary schools in Beijing, formed a subsidiary nonprofit group that would operate Westminster. As part of the deal, Kaiwen promised to operate Westminster for 10 years and continue its academic programs for the next five years.
The agreement, however, was controversial and entangled in legal disputes from the start. Two lawsuits, one by the Princeton Theological Seminary and another by a group of Westminster alumni and donors, sought to block the sale.
The sale also met with complications from regulators. The New Jersey Attorney General’s office, which had the power to either approve or block the sale, raised questions about aspects of the bargain. In a June 20 letter to Judge Paul Innes of New Jersey Superior Court, assistant attorney general Jean Reilly said the buyer was not providing basic information about the transaction that they had requested.
According to Reilly’s letter, the AG’s office could not even obtain the names in Chinese characters or biographical details of the trustees of the nonprofit group, despite repeated attempts.
“While the buyer said who the trustees are not (e.g., stating that trustee Lingfen Wu did not hold any position at Kaiwen Education), the buyer did not provide any affirmative information regarding who the trustees are,” Reilly wrote.
What answers the buyer did provide were inconsistent with previous answers, Reilly wrote. The buyer also failed to provide financial statements, conflict of interest forms, and information about accounting standards.
In March the attorney general’s office had raised questions about what would happen to Westminster’s $21 million trust fund, which was to be turned over to Kaiwen as part of the deal. The office issued an opinion that Kaiwen would have to go to court if it wanted to use the fund for any purpose other than education at Westminster, as the original donors had intended.
Another point of controversy was a part of the contract that allowed Kaiwen to shut down Westminster if it could no longer feasibly operate it as a college.
In a press release Rider president Gregory Dell’Omo did not state which if any of these factors led to the deal being called off.
“Given the enormous complexity of the transaction, it became increasingly clear that partnering with an outside entity, even one as well-intentioned as Kaiwen, was not feasible on a viable timeline,” he said.
A Rider spokesperson declined to answer questions from U.S. 1 about what would be done with the Westminster campus, and instead referred to the press release.
Rider said the new campus consolidation plan was more extensive than the one explored in 2016.
“The new plan envisions a fully integrated campus and robust Westminster College of the Arts that goes beyond the consolidation option proposed by the special committee in 2016. The Westminster College of the Arts encompasses Westminster Choir College in Princeton and the School of Fine and Performing Arts in Lawrenceville, as well as the Westminster Conservatory, which will continue to operate in multiple locations. The plan also proposes that Rider/Westminster explore the possibility of retaining a footprint on the Princeton campus — dedicated in part to the activities of the conservatory, with possible academic and artistic opportunities for students.”
The union that represents Rider and Westminster faculty, the AAUP Rider chapter, welcomed the news that Kaiwen had backed out, but criticized the decision to move Westminster to Rider’s campus.
“We are very concerned that given that the Lawrenceville campus lacks the specialized facilities that the Westminster programs require, such a move may entail the effective destruction of those programs. We therefore urge President Dell’Omo and the board of trustees to work with the AAUP and all other stakeholders to develop a plan that will insure the long-term survival of Westminster Choir College as the world class music school that it presently is,” the union wrote in a press release.
Although the sale of the college is off the table, Rider announced that it and Kaiwen will work together over the next three years on “academic and artistic initiatives.”
Westminster Choir College of Rider University, 101 Walnut Lane, Princeton 08540. 609-921-7100. www.rider.edu/westminster.