AMSL Balance Rises on AMF Loan
Sat, Nov25, 2006 - Category: School of
Law
A September 2001 AMSL press release quotes Dean
Bernard Dobranski as saying "It gives us great
satisfaction to be able to repay the Foundation for
its generous support..." and that "purchasing our own
building is an important step toward ABA
accreditation."
But the ABA might be interested to know AMSL's continued building-related liability to Monaghan's Foundation. In 2001, AMSL secured several loans from AMF at 4-6%. One loan for $1.7M was for "Building". In its last available IRS filing (2004), that balance was up to nearly $2M.
But the ABA might be interested to know AMSL's continued building-related liability to Monaghan's Foundation. In 2001, AMSL secured several loans from AMF at 4-6%. One loan for $1.7M was for "Building". In its last available IRS filing (2004), that balance was up to nearly $2M.
The ABA requires that an institution own, and not
lease, their campus. In 2001, thanks to the State of
Michigan, tax-exempt bonds repaid Monaghan's Ave
Maria Foundation for AMSL's Plymouth Road building,
renovation, and equipment.
But AMSL still owes AMF money. A review of AMSL's IRS 990 forms over the past three years shows three existing loans from AMF to AMSL, with AMF charging a rate of 4-6%. The two loans for "furnishings and equipment" total about $3 million, with AMSL making progress in the balance due each year for the past three years (about $1M total paid on principle).
The third loan, however, has had a balance increase for each of the last three years. This loan is for "Building", with an original loan amount of $1,714,519 (August 29, 2001). The balance now due is up to nearly $2M, an increase of over $260,000, with no payments made on the principle for any year since the loan's inception.
If institution ownership is so important to ABA accreditors, then why has AMSL made no progress in this "Building" debt to AMF? Luckily, for AMSL and AMF, the State of Michigan approved bonds for their use. It makes one wonder if this financial strategy is designed to benefit the Foundation more than the School (i.e. properties appreciate in re-sale/moving value while "furnishings and equipment" depreciate).
But AMSL still owes AMF money. A review of AMSL's IRS 990 forms over the past three years shows three existing loans from AMF to AMSL, with AMF charging a rate of 4-6%. The two loans for "furnishings and equipment" total about $3 million, with AMSL making progress in the balance due each year for the past three years (about $1M total paid on principle).
The third loan, however, has had a balance increase for each of the last three years. This loan is for "Building", with an original loan amount of $1,714,519 (August 29, 2001). The balance now due is up to nearly $2M, an increase of over $260,000, with no payments made on the principle for any year since the loan's inception.
If institution ownership is so important to ABA accreditors, then why has AMSL made no progress in this "Building" debt to AMF? Luckily, for AMSL and AMF, the State of Michigan approved bonds for their use. It makes one wonder if this financial strategy is designed to benefit the Foundation more than the School (i.e. properties appreciate in re-sale/moving value while "furnishings and equipment" depreciate).