Spending Millions to Get Colleges to Relocate Isn't Playing Well in Peoria
Trine University's Peoria campus, as seen on Google Streetview
On Friday, KJZZ broke the news that Trine University abruptly had decided to close its campus in Peoria.
If you haven't heard of Trine University, it's a nonprofit private college based in Angola, Indiana. According to Wikipedia, it has a grand total of one notable alumni, who was the co-founder of Food Lion.
So what was it doing with a campus in the suburbs of Phoenix?
Well, according to the Goldwater Institute, which recently sued the city of Peoria over a similar deal made with Indiana-based Huntington University, it was busy collecting a whole bunch of dubious taxpayer subsidies.
Back in 2012, the city of Peoria agreed to pay Trine $960,000 after the school opened. If the student enrollment turned out to be lower than expected, the city would give them an additional $1.5 million, according to the terms of the agreement.
And by anyone's standards, enrollment has been waaaaay lower than planned. Currently, a spokesperson for the school said, 168 students are enrolled at the Peoria campus for the 2016-17 school year. The anticipated enrollment was 2,180.
The Goldwater Institute's response: We told you so.
“Trine’s decision to shut its doors demonstrates perfectly why the City of Peoria should not be investing taxpayer money into any private business, let alone private post-secondary education,"Christina Sandefur, the lead attorney on the lawsuit, wrote in a statement. "The City simply isn’t qualified to determine which business models may or may not flourish."
It's been well-documented that "eds and meds" — universities and hospitals — have a positive effect on cities' economic development. But getting obscure yet expensive private schools to open up satellite locations in seemingly random communities located miles from their home campuses is not a proven recipe for success.
Last year, Chicago-based Saint Xavier University closed down its Gilbert campus less than a year after it opened, and after the city spent $36 million to finance construction of its downtown building.
Peoria doesn't seem to get this distinction. The specific deal that the Goldwater Institute is suing over also involves a private school from Indiana — Huntington University, which is associated with the evangelical Church of the United Brethren in Christ.
In 2015, the city of Peoria agreed to spend nearly $738,000 to renovate a building that would be used as the school's campus, then give the school an additional $1.875 million for doing things like receiving accreditation, offering coursework, and enrolling students.
As the Goldwater Institute put it: "Essentially, taxpayers will pay nearly $2 million for the privilege of making sure Huntington does what it must do anyway."
Sandefur argues that this violates the Arizona Constitution's gift clause, which states that taxpayer funds can't be used to subsidize to a private entity.
It'll be up to a judge to determine whether that is the case. But in the meantime, it seems pretty clear that offering to pay schools millions of dollars to relocate in Peoria in hopes of establishing an "innovation economy" there is not the best bet.
Peoria city officials have yet to comment on Trine's closure, other than to say that Peoria "values higher education and the opportunities it brings to our residents" and wishes the school "continued success." The city does not comment on ongoing litigation.
And it doesn't just suck for taxpayers, Sandefur points out.
"The students who put their faith in the institution are forced to either move to Indiana — impractical at best — or finish their degrees online, something they could have done in the first place without Peoria wasting taxpayer funds on a local campus," she says.
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