1. Mills College Is Worth Billions. Who gets the prize?

LATEST UPDATE: #2 - 135 Acres Worth Less Than $300,000?

Recently Mills College blindsided students, staff, alumnae and the Oakland Community when they announced that after 169 years they would cease issuing degrees - essentially closing as a college.

What will Mills be in the future? Who will be running it? What is their agenda?

The answers to these questions seem vague and undefined from President Hillman's media interviews with the SF Chronicle and NPR and her statements on the Mills College web site and Facebook page.

Mills College is beloved by all who attended and plays a vital role in developing the raw potential of young women from black, latinx, LGBTQ and other minorities into the leaders of tomorrow.

Whoever is taking it out is dealing a huge blow to Oakland's culture, history and diversity.

WHO BENEFITS? FOLLOW THE MONEY

There are three main assets at Mills College:

real estate
endowment
archives

REAL ESTATE
A contiguous parcel of land of this size very rarely comes on the market in the San Francisco Bay Area, which has some of the world's most expensive real estate.

Some of the real estate holdings are historic buildings, which can be expensive to maintain. Grants from government, foundations, alumnae and other funding options are available to deal with this, a problem faced by every college. As well as the just announced $1.9 trillion COVID stimulus package, the government is working on a $2 trillion infrastructure stimulus package. It seems reasonable that most of Mills capital maintenance needs could be covered by one or more of these funding sources. Or do the developers want to just knock down as much as they can and build condos?

Some of the real estate at Mills is relatively new and highly coveted, such as the music department and its crown jewel - the recently restored Littlefield Concert Hall, widely praised for acoustic quality and architecture.

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As the only large patch of green West of I-580, you can see that the Mills land parcel is of enormous ecological significance.

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We can come to a crude approximation of the value of the land by looking at the area it's in. Think of this as a worst case scenario - ignoring the land, improvements, million+ square feet of buildings, and premium for the uniqueness of the parcel. Residential development is worth more than commercial or industrial development; Mills College is already mixed-use. Is this grandfathered in with the property titles and rights, dating back to the 19th century?

Just assuming industrial use - the site is leveled, and used for a factory or parking lot - we can get the $/sq ft rent for the area, and with average yields calculate a capital value.

Campus size 135 acres
Square feet: 5,880,600

East Oakland commercial real estate
Industrial rent $0.97 / sq ft / month

=$5,704,182 / month
= $68,450,184 / year

at 4% yield=

$1,711,254,600 - $1.7 billion

If the land was to be developed for residential, average sale price per square foot for Oakland is $612 - which values the parcel at $3.6 billion

Lots in the surrounding area are approaching $1 million on Zillow. There is room on this massive site for many thousands of residential units.

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ENDOWMENT

Mills College's endowment was $191 million in 2018. Their accreditation review in 2020 rated their financial situation as healthy, with sufficient reserves to sustain deficits for several more years.

The Endowment draw-down was deliberately reduced from 7% to 5% several years ago. Could this be restored? The difference if it was increased to 7% is another $3.83 million per year.

There is a deficit of $3 million and a budget of $50 million. With an endowment of nearly $200 million, shouldn't they be able to cover that? It's 1.5% of the endowment and 6% revenue shortfall - many organizations have faced much worse due to COVID and stayed open.

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ARCHIVES

In 2020 Mills College set a new record for auctioning off their priceless archives. A Shakespeare Folio gifted to the College expected to fetch a few millions brought in $9.9 million. Another priceless archive item was also being sold to a private collector for an undisclosed sum: a “musical transcript" of Mozart’s five epistle sonatas created in the early 1770s.

Mills College also has the San Francisco Tape Music Center, an important part of the Bay Area's vibrant 60's cultural heritage and Oakland's musical legacy.

Who gets all these archives? Who will hold the digital rights for licensing this intellectual property in the future?

Who gets the endowment funds? What happens with Alumnae Donations?

What is the plan for funding the Mills Institute, if there is no longer tuition?

WHO SHOULD BE HELD ACCOUNTABLE FOR THE TERMINATION OF MILLS?

When their accreditor extensively investigated the college last year, they found the leadership team had failed to execute their Financial Stabilization Plan.

What happened with that plan? What was implemented? Has the Board of Trustees held anyone accountable for the dismal financial performance of Mills - which was happening for years before COVID?

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It appears that since that February 2020 report President Hillman and her team have continued to fail to financially stabilize Mills College. Rather than risk losing accreditation over it - and thus be called to account for her results as leader - she has announced the College will close. No accreditation review necessary!

Do stakeholders have a "clear picture" of Mills' financial status? Are the Board of Trustees asking hard questions about this? Or are they just there to rubber stamp whatever Hillman decides is best?

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WHO DARES, WINS

If the team keeps losing, change the coach - don't cancel the team.

History has many examples of teams that flourished under #NewLeadership.

Mills College is a prize that doesn't need to be given away to any other team.

REFERENCES

Commission Action Letter, February 2020 Action
https://wascsenior.box.com/shared/static/dhgmp2gqknmsd8ac7eqtqghn5zcvng96.pdf

Team Report, Reaffirmation Visit, February 2020 Action
https://wascsenior.box.com/shared/static/uyf83gz15endntryapq78qk6ztb3wlbz.pdf

SF Chronicle, St Patrick's Day 2021
https://www.sfchronicle.com/local/article/Mills-College-will-stop-granting-degrees-ending-16033236.php

Beth Hillman address on Facebook: https://www.facebook.com/millscollege/videos/3476691499104116/

Mozart Manuscript sold privately:
https://www.kqed.org/arts/13871311/mills-college-to-sell-shakespeare-first-folio-mozart-manuscript-amid-budget-woes

Shakespeare's First Folio sells for $10 million
https://www.finebooksmagazine.com/blog/shakespeare-first-folio-sells-just-under-10-million

Tape Music Center Becomes Center for Contemporary Music at Mills
https://hoodline.com/2014/08/the-san-francisco-tape-music-center/

SQ4 2020 East Bay real estate report, Cushman & Wakefield
https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/oakland-marketbeats

Oakland has some of the lowest real estate yields in the world (at 4%)
https://www.cbre.us/about/media-center/weight-of-capital-driving-global-industrial-and-logistics-prime-yield-compression

Oakland Residential Housing Market
https://www.redfin.com/city/13654/CA/Oakland/housing-market

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1. Mills College Is Worth Billions. Who gets the prize?

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