Watkins-Belmont Merger Controversy Continues

When Gerald Mattis, a process server, attempted to deliver a legal summons to a Watkins College of Art commissioner, he was allegedly threatened with a gun.

Mattis arrived at commissioner Susan Basham's home at 7 p.m. on Tuesday night and was met at the door by a man who he believed to be her husband. The man pulled a pistol out of his waistband, held his hand out to the side of his body and said, "I'm not doing this tonight. You leave my property now and get on the street," according to an affidavit Mattis filed.

Brandishing a weapon is class-C felony in Tennessee.

Mattis was delivering a summons for Basham to appear in court today at a hearing in response to a complaint filed by two students and an adjunct professor. The complaint asks for a temporary injunction to halt a merger between Watkins and the nearby Belmont University until the court can review the deal.

Tensions were already running high between the Watkins board, which approved the merger in January, and Save Watkins, a group of students, staff and alumni rallying to keep Watkins independent. Mattis's police report only fuels the fire. Save Watkins is now calling on Tennessee governor Bill Lee to remove Basham. A college spokesperson did not respond to a request for comment on the incident.

J. (Joseph) Kline, president of Watkins, announced in January that the boards of Watkins and Belmont had voted “enthusiastically and unanimously” to merge by August of this year. The merger would save the land-rich, cash-poor Watkins from closing its doors permanently as it struggles to increase enrollment and maintain a healthy endowment.

Since, the deal has been plagued with criticism.

Kline was removed from his role overseeing the merger, and Cary Beth Miller, interim vice president for academic affairs, was appointed to coordinate the transition. Belmont, a Christian university, said it would not consider hiring Watkins’s non-Christian faculty and later walked back that stance.

Events outside the institutions' control have made moving forward with the deal even harder. Nashville, Tenn., was hit by a tornado that wiped out power on campus for a week earlier this month, and the new coronavirus outbreak is sending students home from Saturday until early April at the soonest.

"These students have been through hell, and they’re exhausted," said Mark Schlicher, an alumnus and adjunct film professor at Watkins.

Now, the board is chugging silently forward with the merger while Save Watkins implores the college to consider other options.

Part of the deal involves selling the Watkins campus and donating that money to Belmont to create an endowed scholarship fund for future students. The campus is estimated to be worth between $15 million and $20 million.

“It’s not a merger in any common understanding of the word -- it’s a giveaway,” Schlicher said.

The college maintains that it considered other offers before announcing the Belmont deal, though a college spokesperson would not say which colleges it spoke with. Neighboring Tennessee State University and Fisk University were not approached, according to a letter by State Senator Brenda Gilmore.

Recently, Somera Road Inc., a commercial real estate company based in New York, offered to buy the Watkins campus for $17 million.

Somera would lease the property back to Watkins free for one year, and then charge future rent at 30 percent below market rate -- $17.50 per square foot, compared with another Somera property down the street, which pays $26 per square foot. Upon closing the deal, Watkins would receive a $1 million escrow fund “to cover any short-term financial needs,” according to a Save Watkins press release.

“Our offer is to effectively hand them $17 million, which they can use for operating shortfalls, which will include rent, endowment, fundraising,” said Joe LeMense, vice president of development for Somera. "All to spur enrollment growth so they can break even​."

LeMense said the board was reviewing the offer, but the board did not say when it would respond. On Wednesday, a college spokesperson said the board had "received multiple proposals that it will consider in due time."

Meanwhile, Save Watkins is taking its efforts to court. The group filed its complaint last week in Davidson County Chancery Court asking for a temporary restraining order and a temporary injunction that would prohibit the merger from moving forward until the court can review it.

Save Watkins’s complaint asks whether the Watkins board can "unilaterally extinguish the Watkins public Trust and transfer its associated property to a private religious institution​" and "whether the dissolution of Watkins College violates the clear terms of Samuel Watkins' 1880 will and associated State law​," among other things. The group is scheduled to appear in court today.

Watkins's position relative to the state is highly unusual for a private institution. It was established by an act of the Tennessee Legislature using a public trust created "by the last will and testament of Samuel Watkins." The board's “management is at all times to be subject to inquiry by the authority of the state, under the protection of which the affairs of the institute are placed.”

The college is audited in accordance to government auditing standards that are rarely, if ever, used for private institutions, according to Anne Ogilby, a partner at Ropes & Gray LLC.

In these ways, Watkins is treated like a public institution. However, in 1974 the college became a Tennessee nonprofit corporation through the filing of a corporate charter, according to a college spokesperson.

The Tennessee attorney general and governor sit on Watkins’s board as nonvoting members, so “they will presumably do whatever is required under the statute,” Ogilby said. “It’s not as if the board is trying to cram this through under the cover of darkness without any interaction with state.”

The attorney general’s office said it received notice of the Save Watkins complaint and are working on a response. A spokesperson for the AG would not comment on whether the college is required to get legislative approval for the merger.

“We have not received formal notice of a merger between Watkins Art Institute and Belmont University," a spokesperson for the attorney general said. Such notification is required under Tennessee code.

The Watkins board has been tight-lipped about its process leading up to and in finalizing the merger. Gilmore, the state senator whose district Watkins is housed in, wrote twice to the board asking the board to suspend the merger until the community has a chance to learn more about the deal.

“As an educational institution that was established by the legislature, and, by state law, is overseen by Commissioners appointed by the Governor, it is troubling that I was not informed, nor consulted, prior to a deal being announced between your Board and Belmont’s Board on January 28,” Gilmore wrote.

A college spokesperson said the board is planning to meet with Gilmore next week.