The other side of the story? U of L’s academic trends from 1998 to 2012. (Click to see full size.)

A few weeks ago, University of Louisville President Dr. James Ramsey gave his annual “State of the University” speech.

During his talk, Ramsey attacked elected state and local officials for budget cuts to higher education and to funds that provide indigent care at University of Louisville Hospital.

Several weeks earlier, the same Dr. Ramsey had given a speech bragging about the university’s investment in Nucleus, an “innovation park” with no tenants built on prime downtown real estate at the old Haymarket site.

Those two speeches were remarkably different in tone. The former was gloomy and disastrous. The latter was all puppy dogs and ice cream.

We wanted to talk with university officials about this, but no one wanted to go on record.

So, since Ramsey was the one who brought this up, maybe he should answer some questions.

Dr. Ramsey, in your annual speech on the state of the university, you had some strong words for unnamed elected officials who you say are responsible for U of L’s failures. You say the failures are because of budget cuts in higher education. Talking about more money for education is a popular theme in these desperate days, but it seems like the money allocated by the state for “education” isn’t necessarily being spent on “educating.”

Would you mind answering a few questions?

  • The “do nothing” state  you are complaining about has funded a $31 million dollar road project directly benefiting the university. U of L kicked in $6 million. Where did you get the six million, and why didn’t you mention that state outlay in your speech?
  • Discuss the $18 million for Nucleus and explain the Tax Increment Financing district the “do nothing” state granted you there.
  • Talk about the $1.1 billion for a “research park” at the old Kentucky Trailer property on South Third Street. The property was purchased in December, 2008 for $19.5 million dollars by KYT Louisville LLC,  an affiliate of the U of L Foundation. At the time of the purchase, U of L Foundation vice chairman Burt Deutsch told Business First there were no immediate plans for the site. But six months prior to the purchase, you released a statement saying the property had been included in the school’s “master plan” for several years. Which is it? And would you agree that  – just maybe – you guys are moving a little too quickly here? Tell us about the other TIF the state granted the university for this project.
  • Give us your thoughts on TIFs. U of L seems to have so many of them. Are they a good deal? Do they work? Do you think it is working for the downtown arena?
  • How much money has the university put into MetaCyte? (MetaCyte is a private company.)
  • How much will U of L spend on ShelbyHurst? Beyond the $1.1 million spent for roads/sidewalks on the property, what is the construction plan? Another TIF?
  • Explain in detail how the school can afford to fund a campus in Panama while pretending it cannot afford to operate at home.
  • Talk to us about the University of Louisville Foundation, its income, and the alleged 20.8-percent return on its investments. How much does that make up for in the loss of state cuts?
  • U of L Athletics is one of the top three richest sports programs in America. Would you support a new state law that would require the university to dip into the massive athletics budget before coming to the state with monetary demands?
  • Tell us about money spent on acquisitions like Cardinal Station.
  • To the average Louisvillian, it looks as though the university places a higher priority on building things than educating students. Tell us how U of L can afford to invest in real estate schemes while whining about not getting $77 million from the state for a “badly needed” classroom.
  • Speaking of classrooms, U of L claims it has a 68-percent deficit in classroom space. How can you justify dumping money into ventures like Nucleus and MetaCyte while ignoring the needs of the students with regard to classroom space?
  • What effect does indigent care funding at U of L hospital and the failed hospital merger have on the average student? If there is no direct effect, why did you bring it up?
  • The university’s statement to the Courier-Journal regarding the number of Fulbright Scholars in the past year is incorrect. Fix it, then tell us how the correct number of Fulbright Scholars compares with the state’s other universities and outside competitors.
  • U of L’s  Swain Student Activities Center opened in 1990. Tell us why you are building another student activities center. What happens to the old one? Will you lease it out? Also, is it fair to be nailing students for another $100 per semester to pay for another rec hall when you were allowed to sell $37.5 million in tax-exempt bonds to pay for it in the first place? And really? Six more basketball courts? Here’s a tip for your “research university”: BUILD A DAMNED LIBRARY!
  • Do you accept full responsibility for what you have deemed to be the university’s failures? What is the proper remedy?
  • You have been quoted as saying, “The goal of higher education is to make the world a better place.”  Why are you building so many basketball courts while turning out so few graduates?
  • Has it ever occurred to you that if you weren’t spending tons of money on this bullshit that you could have funded and built everything you said you needed, regardless of state cuts?

In the past, haughty automobile analysts described General Motors as a giant health insurance company that “just happened” to make so-so cars on the side.

A similar analogy for what we have with the University of Louisville: A huge, tax-driven real estate developer that just happens to offer “ho-hum” degree programs on the side.

There’s an old saw often-repeated around my neighborhood: “Never trust a guy with a comb-over hairdo. He can’t even be honest with himself about being bald, so how can he be honest with you?”

How the university spends and receives money, handles assets and buys/leases real estate is a prohibitively complicated subject. There are many entities involved, making the process of tracking transactions needlessly mind-bending. Below is a list of acronym-crazy organizations that make up the U of L Foundation, copied from consolidated financial statements from 2008 and 2009.
University of Louisville Foundation, Inc. (ULF), ULH, Inc. (ULH), University Holdings,
Inc. (UHI), University of Louisville Development Corporation, LLC (ULDC), Nucleus:
Kentucky’s Life Science and Innovation Center, LLC (Nucleus), AAF-Louisville, LLC
(AAF), MetaCyte Business Labs, LLC. (MetaCyte), KYT-Louisville, LLC (KYT), and
Phoenix Place – Louisville, LLC (PPL) (collectively “Foundation”).
As directed by its Board of Directors, the Foundation transfers funds to the University in
satisfaction of donor restrictions. In addition, a portion of the unrestricted resources of the
Foundation provides support for a variety of University activities.
• ULH began operations on April 23, 2001 and is affiliated with ULF through certain common
management and trustees. ULH leases land and issues revenue bonds for student housing
purposes and receives, retains and disposes of real estate, and manages and operates the
student housing properties it owns.
UHI (originally named Cardinal Real Estate, Inc.) is a non-stock, non-profit corporation
created in September 2007 for the benefit of and to carry out the purposes of ULF. UHI
provides oversight and management support to various affiliated entities. UHI is affiliated
with ULF through certain common management and directors.
ULDC is a limited liability company formed in September 2007, whose sole member is ULF.
Its purpose is to develop and manage the real estate operations of the Shelby Campus of the
University. UHI is the Manager of ULDC.
Nucleus Healthcare, LLC was formed in February 2008 and subsequently renamed Nucleus:
Kentucky’s Life Sciences and Innovation Center, LLC (Nucleus). Its purpose is to integrate
University resources, including life sciences, with those of the region, specifically as it relates
to building and maintaining a research park in downtown Louisville. ULF is the sole member
of Nucleus and UHI is the Manager.
• In October 2008, ULF assumed substantially all of the assets and liabilities of the Louisville
Medical Center Development Corporation (LMCDC) and subsequently sold them to Nucleus
for no consideration. LMCDC was a discretely presented component unit of the University.
MetaCyte is a limited liability company formed in October 2008. Its purpose is to identify
and support commercially promising health science discoveries in the region. Metacyte was
a former subsidiary of LMCDC. ULF is the sole member of MetaCyte and UHI is the Manager.
MetaCyte Equity Holdings, LLC is a limited liability company formed in February 2006. Its
purpose is to hold the equity shares obtained by MetaCyte through development with start-up
corporations. As of June 30, 2009 no equities have been transferred and MetaCyte Equity
Holdings, LLC has had no activity since inception.
• AAF is a limited liability company formed in February 2008, whose sole member is ULF. Its
purpose is to develop and manage the real estate operations of Cardinal Station. UHI is the
Manager of AAF.
KYT is a limited liability company formed in November 2008, whose sole member is ULF.
Its purpose is to develop and manage the real estate purchase and development of property
adjacent to the University. UHI is the Manager of KYT.
PPL is a limited liability company formed in April 2009, whose sole member is ULF. Its
purpose is to develop and manage the real estate purchase and development of property near
the health sciences campus of the University. UHI is the Manager of PPL.