Upheaval continues at UArts: Its president resigns, but Temple offers a possible merger

Upheaval continued at the beleaguered University of the Arts on Tuesday, including with news that president Kerry Walk had resigned — but the day also delivered a lifeline, as Temple University stepped up to offer a possible merger.

These developments came just four days after Walk, who had been president of UArts for less than a year, announced the school would close June 7 because of declining enrollment and an unspecified financial crisis.

Walk did not return a request for comment, but a university official confirmed her resignation, which had yet to be officially communicated to staff or students as of Tuesday evening.

The union that represents University of the Arts faculty and staff said in a statement that its members were “appalled” by Walk’s resignation, which triggered the cancellation of a bargaining session on the terms of the closure that was supposed to happen Tuesday afternoon.

Walk and the board of trustees’ handling of the university’s closure has been roundly criticized; elected and many top university officials had no inkling of the coming shutdown until Friday. Many faculty, staff, students, and families learned of the news not from Walk or board president Judson Aaron, but from an Inquirer article.

“This sudden resignation, announced via the media, continues the pattern of disregard and cruelty to which the University of the Arts has subjected employees and students,” the union said in a statement. “It has been five days since the abrupt decision to close with no answers or explanations: Employees do not know if they will receive paychecks for the work they have already completed, let alone what happens after June 7.”

Walk and the board of trustees “have behaved disgracefully and irresponsibly,” the union said.

The union called for Aaron to begin negotiations on severance and benefits immediately, as well as meet with students and the larger university community “to explain what has happened.”

Walk declined in a Friday interview to provide specifics on what specifically prompted the closure decision, but said “with a cash position that has steadily weakened, we could not cover significant, unanticipated expenses.”

One university trustee said Monday that while even she did not know the details of the crisis, it had been estimated that about $40 million would be needed to cover the university’s cash flow issues.

Amid the stunning news of Walk’s resignation, Temple’s board chair said he was exploring a possible way to save University of the Arts.

“I’m working with their chair to see if we can put this genie back in the bottle,” said Mitchell L. Morgan, the board chair and founder and chairman of Morgan Properties. “Can we somehow figure out some type of potential merger? If it’s a win-win, we are interested.”

Morgan said he has reached out to Gov. Josh Shapiro’s and Mayor Cherelle L. Parker’s offices to see what could be done. Temple president Richard M. Englert and provost Gregory N. Mandel also are talking with officials at UArts, and Morgan said he spoke with Aaron for a half-hour on Tuesday.

Manuel Bonder, a spokesperson for Shapiro, confirmed the talks.

“While many questions around this abrupt closure remain, our administration is focused on ensuring these students are protected — and we believe it is critically important for them to be able to continue their education,” Bonder said in a statement. “We appreciate Temple’s efforts to step up in this difficult moment and will continue working together as we move forward.”

A spokesperson for Parker declined comment; State Rep. Ben Waxman (D., Philadelphia) whose Center City district includes UArts, referred comment to Parker’s office.

Morgan said UArts’ curriculum fits in well with Temple and its Tyler School of Art and Architecture, Boyer College of Music and Dance, and School of Theater, Film and Media Arts.

He said he wished he had learned of the school’s struggles earlier, which would have allowed for more time to save the institution. The Middle States Commission on Higher Education, UArts’ accreditor, withdrew the school’s accreditation on Saturday after UArts notified the commission it intended to close.

“I’m interested in seeing how they can survive, how Temple can help them, but the most important thing is how can we help the student body,” Morgan said. “We are all in shock.”

Temple already has stepped up as one of the institutions that will work with UArts as a partnership school to help students transfer there seamlessly.

“We all want to ensure that the students, faculty, and staff at UArts are taken care of in any talks of a possible merger,” said Jeffrey Doshna, president of the Temple Association of University Professors, Temple’s faculty union. “We would insist that all of those voices are part of the process, both on the UArts and on the Temple side.

“If this does not move forward, we’d expect to join with our union siblings at UArts to negotiate over how to guarantee that everyone is protected.”

But while the high-level negotiations continued, the university’s rank and file felt adrift.

A group of about 20 students staging a sit-in stayed overnight Monday, catching catnaps on the marble steps of the grand building at Broad and Pine.

“We have heard nothing, so we’re staying,” said Rayne Smith, a recent UArts grad in directing, playwriting and production — a major she said exists nowhere else. “It feels like we’ve been completely duped. We don’t have any leadership at all beyond what we’re getting from the community.”

Bradley Philbert, a University of the Arts adjunct professor and vice president of the union, agreed.

“There’s just an overwhelming uncertainty coming from the top,” Philbert said. “For all the resources we can share with members, we can’t give them the answers they need. We don’t know who’s in power.”

Union officials said they would work with local, state and federal officials “to compel the University of the Arts to meet their legal and ethical obligations as events continue to unfold.”

A spokesperson for the Pennsylvania Attorney General’s Office indicated that it had oversight regarding the school and said that officials were “very concerned by the sudden closure of University of the Arts, which has impacted students, staff, and the community. We are reviewing the circumstances of the closure and any transfer or loss of assets.”

The financial community also weighed in Tuesday on the uncertainty at the university.

Fitch Ratings downgraded UArts’ credit rating on $46 million in municipal bonds to a rock-bottom “C.”

That is the last stop before a default, which Fitch considers inevitable. The next payment on the bonds is due on Sept. 15.

The municipal bond debt, issued in 2017, is secured by mortgages on three of the university’s South Broad Street properties. A private firm appraised their value at $36 million at the time. The city now says they are worth $80.7 million.

Staff writers Harold Brubaker and Peter Dobrin contributed to this article.