(This letter was sent by USPS mail to all alumni on our mailing list. If you did not receive the print version, and to confirm your contact information is current on our distribution lists, please email Jonathan Silver at email@example.com) February, 2012
Dear GTS Alumna/us,
We hope this finds you well and enjoying a productive and hopeful new year. As you will read later in this letter, we believe January 2012 was a significant turning point in the recent history of your alma mater and we are delighted to have this opportunity to explain why.
Before turning to our most recent developments, it is important to set these in historical context. In October of 2010 the Board of Trustees of The General Theological Seminary, responding to a financial crisis, took a bold step forward in approving a comprehensive financial initiative called the Plan to Choose Life. Not only was the initiative bold it was also risky! The Plan was designed to immediately create cash to continue the Seminary’s operations, to substantially eliminate debt for our 194-year-old institution, as well as to rebuild our endowment, create a balanced budget, and revitalize our mission.
We are pleased to say that, thanks to the hard work of so many, the first three phases of the Plan to Choose Life have succeeded. The result has dramatically reduced debt, which now stands at approximately $11 million and has significantly decreased our operating deficits. It has also increased our endowment which now stands at approximately $20 million. As importantly, out of a contingency we set aside, the Plan has built up an operating reserve of about $5.5 million.
Presuming we close on the final restructuring transaction, the leveraging of the “hotel” part of the Desmond Tutu Center, we can expect that the endowment will grow to be as high as $30 million (including the remuneration we expect to gain from the development of West Building). Moreover, all M&T bank debt will be eliminated and we will have dropped our annual cash loss from as high as $7 million annually to an expected $3 million for next year. With the other cost reductions (including offsetting investments to be made in our mission) our plan calls for a $2 million loss in 2013/14 and a $1 million loss in 2014/15. The good news is that with the planned cost reductions, our new operating reserve should be able to cover approximately three years of operating losses, which should fund enough time to allow GTS to formulate a new vision for the 21st century and to develop a plan to balance the budget.
While we have made progress, we do have one critical final transaction to complete. The last and very important financial component of the Plan to Choose Life is to eliminate debt and rebuild the Seminary’s endowment by leveraging of the “hotel” portion of the Tutu Center. A Letter of Intent has been signed that involves separating the hotel part of the complex from Hoffman Hall—with only the guest rooms and hotel being purchased by outside investors (with GTS retaining a beneficial interest in the ongoing profits of the hotel). Hoffman Hall itself, including the conference and breakout rooms, and the refectory are not being sold and will remain under the sole ownership of General Seminary. Since the buildings that are part of the present Tutu Center share infrastructures, it was far less expensive to divide ownership of the life safety and electro/mechanical systems through the creation of two individual property units. Accordingly, this is a very complex transaction not only needing extensive legal, architectural and engineering work but needing Attorney General approval. God willing, we expect a closing with the new hotel operator this summer.
It is very important to note that this arrangement will allow ongoing use of the hotel and conference center in substantially the same, if not improved, manner as GTS has used it in the past—improved because instead of being driven by the need for profits, Hoffman can now be used as a center for Seminary programs and continuing education. Income from our endowment will support the Seminary’s mission instead of relying on the ups and downs of hotel profitability. We will still be able to use Hoffman for events and meetings in conjunction with the hotel which will continue to generate revenue streams but we will not be beholden to this usage as in the past.
January 2012 marks not only a turning point in the Seminary’s balance sheet but the completion of the renovations to our campus. Within our Chelsea Square community and beyond, eliminating the demoralizing effect of debt and uncertainty about operating funds has had a tremendously energizing effect. Likewise, creating beautiful new Seabury administrative offices, the first the Seminary has had in 52 years, has brought renewed confidence and pride among our dedicated staff and faculty. The same may be said of the addition of three new faculty members this past year and the opening of the spectacular Keller Library. The Plan to Choose Life and even its early successes have also galvanized the commitment of our donors, taking our Annual Fund to a record-breaking $1.1 million in our last fiscal year. Your President and your new Associate Dean feel privileged to be serving the Seminary during this exciting period of change.
We are pleased to report all this positive energy is being effectively harnessed by a new strategic planning initiative being undertaken by our Chairman, Bishop Mark Sisk, the Rev. Dr. Bill Clarkson and their trustee, faculty and staff colleagues who serve on an ad hoc committee set up by the board to enlist the input of all stakeholders, alumni/ae included, in creating a new strategic vision for GTS, one that will take into account the rapidly changing landscape of theological education in the U.S. and will chart creative ways forward for GTS to address the needs of today’s Episcopal church in raising up its future leaders.
Because we believe it is so important to keep all our alumni/ae informed as we round this new bend in the Seminary’s history, in addition to our quarterly mailing and monthly e-news, you will be receiving a single-page update letter like this from GTS at regular intervals over the next few months. These letters are meant to insure that you can stay up-to-date about our emerging strategic plan and about accomplishment of the last financial objectives of the Plan to Choose Life, including the critically important goal of rebuilding our endowment. We want to be sure you are kept abreast of all these important developments. We hope you receive our print publication, GTS Quarterly as well as our electronic newsletter, GTS Update, which is emailed monthly. If not please email Jonathan Silver at firstname.lastname@example.org with your contact information.
We still have much work to do and challenges to face, but it is important that we celebrate all the work done by previous administrations and the work done by so many on the Plan to Choose Life. What a privilege we all share in being a part of the contribution The General Theological Seminary makes to the great enterprise of theological education in the Episcopal Church and beyond. Please know how much we appreciate your support and your prayers. You’ll be hearing from us again in the very near future.
The Rev. Lang Lowrey The Rev. Dr. Patrick Malloy President Associate Dean