McNally Smith president says financing failure forced music school's closure

The president of McNally Smith College of Music says a last-minute failure to secure financing doomed the St. Paul school, which is set to close next week.

Students and staff at St. Paul's McNally Smith College of Music were in shock Friday after an unexpected announcement the night before in which administrators said the school ran out of money and would be unable to even pay its employees.

"The timing, of course, seems like it couldn't be worse, and the reason is that as recently as last week we thought we had a plan in place that would keep us moving forward," said college president Harry Chalmiers.

McNally Smith was in the process of converting from a for-profit to a non-profit as part of a plan to turn around its struggling budget. Chalmiers said the process was long and costs were high.

Enrollment at the school had fallen — more than 30 percent from 2012 to 2016. Chalmiers said to attract students the school needed to increase scholarship offerings, which further strained finances.

"We essentially were seen as, I suppose, too big a risk as far as banks investing in an organization that appears to be struggling," he said.

McNally Smith has become known for a contemporary music program that included degrees in hip-hop, production and music business.

Chalmiers says McNally Smith has been contacted by some schools wanting to help students transfer and has transfer agreements with others, although he did not specify which schools.

Spokespeople for the University of Minnesota and the Minnesota State system say McNally Smith does not have agreements with those systems.

The school's employees are in just as precarious a situation as its students. And they had no more notice.

"I couldn't believe it," said Chris Osgood, McNally Smith's vice president of community relations. He had signed off email earlier in the afternoon and heard the news from a former colleague, he said.

"After you've been at a place for nine and a half years, and you do the things we do and are part of a community where really everyone is truly beloved to me ... it's really been a wonderful run," he said.

Employees were asked to stay on without pay until the end of the semester, which ends next Wednesday, to ensure students receive credits and degrees earned.

The most recent data available shows a school staff of 84, the majority of whom are part-time employees.

Board chair Jack McNally wrote in an email Thursday night that the school is "committed to making good on the wages owed" to employees as soon as possible.

Employment lawyer Justin Cummins said hourly employees who don't get paid for their work can take action on their own, but it can be a long process.

"Employees that are owed money, compensation of some sort for work that they've done, can pursue legal claims either through an enforcement agency of some sort like the department of labor or they can go to court," Cummins said.

Still, talking in his office in a mostly empty building, Osgood said the emotions he hears from staff are less combative. He has mostly heard sadness, at the end of an institution they love.

"There have been other people that have left the school in the last year or so, knowing this was an outside possibility, but we stayed knowing it was an outside possibility because just the day to day is so enjoyable," he said.

Osgood said he expects the majority of staff will stay until the end of the term, paycheck or not.