A few weeks ago, officials at Morris Brown College announced that the school had entered into an agreement with Hilton Hotels for a $30 million investment in its hospitality management program, with the construction of a new hotel as the capstone of the agreement.
To the layperson, the announcement gave the impression that the school would receive a large financial benefit. Incomplete impressions are on-brand for MBC, which in November announced its successful application for accreditation with the Transnational Association of Christian Colleges and Schools and created a public stir that led many HBCU supporters to believe that the school had received actual accreditation.
Fast forward to this week, when investment management firm CGI released its own details about the partnership which were different from the original announcement, and nowhere to be found on the Morris Brown website or the Hilton corporate portal.
CGI Merchant Group, LLC (CGI) — a minority-owned global investment management firm with a focus in real estate and private equity — announced today it will make a $30 million investment in the historic Morris Brown College to convert existing facilities into a 150-key upscale hotel and hospitality management training complex. Construction of the 90,000-square-foot state-of-the-art facility is expected to begin later this year…
It continued:
The hotel will join the Tapestry Collection by Hilton, adding to the hospitality industry leader’s portfolio, consisting of more than 6,400 properties in 119 countries and territories worldwide. The 150-key property will offer two food and beverage outlets, an outdoor terrace and instructional space for the school’s hospitality students…
In addition to the development of the hotel and training complex, CGI has committed to the establishment of an endowment to fund several initiatives including financial aid to students, future expansion goals, and assisting minority and women-owned businesses in the surrounding community, with the objective of creating the number one hospitality management program at a HBCU in the U.S.
Hilton intends to play an active role in the project, going beyond the proposed franchisor and operator. The hotel industry giant will serve in an advisory capacity for Morris Brown’s hospitality management program, providing guidance on how the curriculum can best prepare Morris Brown students for any number of careers in the hotel business. Hilton also looks forward to contributing guest lecturers and facilitating job shadowing at local Hilton properties for Morris Brown students, creating pathways for internship and post-graduation career opportunities.
In so many words, the CGI release tactfully tries to make clear that Morris Brown will not receive $30 million, the hotel will be a franchise under the Hilton umbrella of properties and built through a purchase or leasing agreement of an existing MBC facility, and that the school’s revenue gains from the project will be through increased enrollment and in the form of a scholarship endowment.
These are facts made clearer by an FAQ Morris Brown released close to CGI’s release, suggesting that both sides really wanted to be clear about what exactly the partnership is, and how it differs from what the public may have been led to believe that it is.
Morris Brown misrepresenting its gains is not the subject here, because a lot of organizations, including HBCUs, do the same thing. Last January, officials at Morgan State University announced that the school would be bringing a medical school to the campus and the first school of osteopathy at an HBCU.
In reality, the deal is a leasing agreement for Salud Education LLC to construct a school on the MSU campus and to give select Morgan graduates preferential consideration in admissions for its doctoral programs. Graduates will not earn a Morgan degree, Morgan will not have to be approved by state higher education oversight processes to develop a medical school, and it will not join the collection of historically Black medical institutions.
The lies aren’t the lead. The real headline is about HBCUs increasingly entering into public-private partnerships with private companies to bolster student access and graduation.
Dozens of community, technical and small four-year schools have shuttered in the last five years. Three years before the arrival of a global pandemic and accompanying economic crisis, I wrote that 50 HBCUs would likely survive the next decade. Last year, a research study showed that 47% of all HBCUs faced financial stress factors that could lead to closure.
Earlier this week, a higher ed tech executive predicted that 25% of all colleges and universities could go out of business, even with infusions of federal assistance and record-breaking philanthropy.
These trends compel schools like Cheyney University, Saint Augustine’s University, and other Black colleges to more aggressively pursue corporate partnerships for leasing and profit-sharing deals. HBCUs of all sizes and missions understand that revenue will no longer be driven by tuition and philanthropy, but rather, acreage and proximity.
Businesses are redefining what office space and talent acquisition look like. There’s no longer a need for metropolitan appearance or even business park affordability; colleges that are scrambling to adjust to freefalling enrollment and endowment instability are land rich, cash poor, and open to making deals.
The key for HBCUs is that their leaders can’t lie about it. They have to be open with stakeholders about what is at stake in building such relationships, and how they can work for a more stable economic outcome for their institutions.
There is no reason to exaggerate the value of a partnership designed to diversify revenue if the alternative is to cut personnel and faculty, shutter athletic programs, or take buildings off-line.
Words matter, especially when survival powers the intent behind them.
