McNally Smith came within 'hair's breadth' of reopening

While students searched for places to transfer and ex-faculty launched job hunts, a quiet move to reopen McNally Smith College of Music took shape.

The deal would involve reopening the downtown St. Paul school as a nonprofit, allowing access to financial resources and an ability to adapt to a competitive higher education world.

At the school's last graduation ceremony on Dec. 16, just days after the closing was announced, student affairs director Sue Brezny made a public plea.

"This is unorthodox of me to say, but if there's anybody who is a billionaire out there who could help us, pass the word please," Brezny said.

And that kind of happened.

For more than a year, the McNally Smith College of Music Foundation tried to raise funds and figure out a way to convert the college to a nonprofit. The move would help students access more federally backed loans and grants and allow for more fundraising.

But the foundation's board had a few hurdles. It needed approval from the U.S. Department of Education. And it had to figure out a way to transfer assets owned by the two founders of the 33-year-old school to the nonprofit foundation.

"When the bottom fell out, many came forward to try to help. We did have an anonymous donor who came forward," said Nina Archabal, who served on the board.

That donor could make financial aspects of the conversion happen. Over the next several weeks, the board worked with the donor to hammer out a deal with bankers, mortgage holders, the city, and owners Jack McNally and Doug Smith. They also got an extension from the Department of Education to submit their application.

"I stood up on Jan. 8 in front of faculty and said we were within a hair's breadth of getting there," Archabal said. "And I fully expected that the next day we would be announcing that the school would open as planned on Jan. 22. It looked like a miracle was going to happen."

Almost a month before, faculty and students received word that, due to financial constraints, the school would close in less than a week.

"It was pretty horrific," said Scott LeGere, the former head of the music business department. "None of us really saw anything like this occurring."

After the closing, faculty not only lost their jobs, but they weren't sure if and when they would get their last paychecks. More than 300 students had to scramble to find schools that might take transfer credits from one of the few contemporary music programs in the country.

Over the next few weeks, students, staff and others across the Twin Cities helped those who were stranded with days left in the school year. Food was donated, fundraisers were held and some people even opened their doors to students who lost housing provided by the school.

But after the meeting with Archabal announcing the donor's support, former faculty and staff said they anticipated a reprieve.

"We were ebullient," said Chris Osgood, the former vice president for organizational development. "We thought, 'Oh boy, here we go.'"

"Starting at 11:30 the next day it was sort of a constant agitation and nervousness — checking your phone, texting with friends and colleagues 'Have you heard anything?" said LeGere. "Then it was a day or two later that we finally heard that the effort had failed."

Co-founder and co-owner McNally said one iteration of the plan involved leasing the building that housed the school to the nonprofit, while he and his partner Smith continued to own it. McNally did not give specifics on sticking points but said the parties couldn't come to an agreement on all parts.

"We had 95 percent of it, and that last little 5 percent just didn't happen," he said.

U.S. Bank, which represents the anonymous donor, said in an emailed statement, "Our client had hoped to make a charitable donation to the school to enable it to remain in operation. Numerous nonprofit, governmental and private entities were involved, but unfortunately the parties could not come to an agreement on keeping the school open."

McNally said they are now trying to raise enough money to get transcripts out to former students and process other aspects of closing down. Staff still have not been paid for their last weeks of work, but some are still working on transfers for students.

McNally said he and Smith don't know if they will sell the building, which was sold to them for $1 by the city of St. Paul in 2001 and was assessed at $13.6 million in 2017, according to Ramsey county property records. The city of St. Paul has right of first refusal for any sale.

"We've not determined what the next step is," he said. "We're committed to making good on any back pay, any of our obligations. And if that plays a role in that, then so be it."

Some students have been able to enroll in other schools, like Augsburg College and Concordia University, St. Paul. Jax Ravel, who attended McNally Smith on a scholarship, is still waiting to find out where he will go. An international student from Madagascar studying bass, Ravel may lose his legal status to remain in the U.S.

"I have a small window, 45 days, from the official closure of the school. That's mid-February. That's not enough. So yeah, I need some help," Ravel said.