This story has been updated to include additional information from a spokesperson at Averett University that was not initially provided in time for publication.
Averett University’s new president says he has a plan for financial recovery that includes repaying the school’s vendors and endowment, and could include further limiting academic options and selling more real estate.
But the school’s ongoing financial issues are “not fatal,” and Averett will not close, Thomas Powell said.
“As I meet people in town, the first question they ask me is, ‘Are you closing?’” Powell said. “Well, we are so far from closing.”
The Danville school has been consumed by financial issues since last spring, when it revealed that financial mismanagement had led to a budget deficit. The university instituted summer furlough days for some employees, phased out several academic programs and put a few properties up for sale, including the president’s house and the university’s equestrian center.
Powell’s tenure as president began May 1. He said he is working on a short-term plan for financial recovery to present to the university’s board of trustees.
The plan includes a process for repaying the school’s vendors and endowment fund and an evaluation of the current academic offerings and tuition costs.
After that, Powell would like to work on a four-year plan focused on making that recovery sustainable and realistic, he said.
“We need to let everybody know what’s happening, be very open about it, not embarrassed about it,” he said.
Powell is Averett’s third president in the span of three months.
Averett selected Powell to lead the university in April, just two weeks after former president David Joyce announced his resignation due to a medical diagnosis his wife received.
Joyce was named president in December after Tiffany Franks, who had led the university since 2008, stepped down.
Averett did not provide an exact figure for Powell’s salary, but Dan Carlton, chair of the university’s board of trustees said:
“The board is very appreciative of Dr. Powell’s understanding of Averett’s financial position and his willingness to accept a significantly reduced salary from his previous presidency and what Averett paid in recent years.”
Carlton also said that Powell had a palpable energy and enthusiasm for the role, which made him stand out among other candidates.
Making repayments
To begin the process for paying back larger vendors, Powell said he is meeting with the senior vice presidents or CEOs of those companies to “explain the situation.”
He specifically mentioned Aramark, a food service provider that operates Averett’s dining services. Averett has a month-to-month contract with Aramark through July 2032, according to the latest university audit available.
The university spends about $1.7 million annually on student food services, per its most recent tax return available.
Averett had no comment when asked about the amount owed to Aramark.
Powell said he’s developing a two-year plan to pay back Aramark that will be included in the upcoming budget, which he will present to the board this summer.
“There will be line items in the budget for Aramark and how much we’ll be paying them,” he said. “Aramark has a strong belief that they are partners with us, and they’re with us in the good times and the bad. And this is a bad time for us right now.”
Smaller local vendors may not be able to wait that long, Powell recognized.
Danville-based construction company Clay’s Home Improvements has not yet been paid for a reroofing job it did on a campus building last year, said owner Billy Clay.
Clay said he’s been waiting about six months for around $20,000 from Averett. In the meantime, he has had to pay some of his employees out of his own pocket.
He hasn’t heard anything from Averett about when the payment might be made, he said. But he also hasn’t pushed the university on it, partly because he knows of other contractors that are waiting on “a lot more” than he is.
“I’m just trying to wait it out,” Clay said. “I would think they’d do what they can … but I don’t know if I’ll get it or not.”
Several other local contractors who have done work for Averett over the last three years, including Poole’s Plumbing and CRB Electric Inc., said they had never had an issue getting paid by Averett.
Another vendor, Triad Aviation, which sells aviation supplies, declined to comment on its current relationship with Averett, which is the fixed-base operator at the Danville Regional Airport.
But in emails obtained by Cardinal News, former FBO manager John Earl told city officials that Triad, which is based in Burlington, North Carolina, had “cut the FBO off” in spring 2024. Earl’s only option for purchasing parts for aircraft repairs was a credit card, according to an email.
In an April interview, Earl said that it took three or four months for Averett to pay down about half of the thousands of dollars that it owed so that Triad Aviation would restart its business with the FBO.
Powell said he is “very sensitive” to how late payments may affect local vendors and is “committed to getting that cleaned up.”
His budget presentation will also include a plan to pay back the university’s endowment in an effort to rebuild trust with donors.
The withdrawals from Averett’s endowment totaled almost $20 million, according to a lawsuit filed by the university in April against its former chief financial officer and an investment firm, who the school claims colluded to hide the budget problems.
“We want to make sure that the money that was borrowed by another administration to pay bills is paid back,” Powell said.
In the suit, the university claims that the endowment had shrunk to 25% of its value because of these withdrawals.
According to Averett’s last audit for the fiscal year ending June 2023, the endowment was worth $24.7 million.
Powell said the school is waiting on the defendants to file a response to the lawsuit. The suit is not about blame, he said, but rather about “making a commitment to recover what was used in inappropriate ways.”
Averett is a defendant in three other lawsuits.
The former operator of the FBO sued the university in Danville Circuit Court, claiming breach of contract for how the school took over FBO operations from it in 2021.
In a federal lawsuit, a former faculty member accused the college of racial discrimination and retaliation.
In another state lawsuit, a former faculty member is pursuing Averett for breach of contract. The plaintiff contends in part of the complaint that they shouldn’t have been subject to furlough days last summer due to their contract terms.
Selling real estate, cutting academic programs
Powell said he is open to continuing the strategies Averett has been using to financially recover, including selling off real estate and limiting academic offerings.
When asked if layoffs will continue, Powell said he didn’t know yet. The school announced in March that it was eliminating 15 positions, both part- and full-time staff and administrative faculty.
In April, Averett listed the university’s equestrian center for sale for $1.6 million.
A few weeks later, it listed the president’s home for sale for $699,000 and held an online auction for furniture, decor and other items in the house — things as big as an antique mahogany gentleman’s desk and as small as laundry baskets, faux plants and Brita pitchers.
Powell didn’t specify which, if any, properties would be sold in the future.
As far as academic offerings, he plans to evaluate each program offered at the university to assess whether it’s “central to the mission of Averett University,” he said. “Our contemporary mission, not our mission back in 1859.”
Powell mentioned several “star programs” at the school that will continue to be offered, naming aviation, nursing, business, hospitality, biology and sports management.
The aviation, business administration, criminal justice/law enforcement administration and nursing programs represent the most undergraduate degrees conferred for the 2023-2024 academic year, according to data from the State Council of Higher Education for Virginia.
Nursing had the most degrees conferred, with 78 graduates.
The programs with the lowest number of bachelor’s degrees conferred for 2023-2024 are accounting, English, equestrian studies, exercise physiology and kinesiology, history and political science.
Each of these programs had less than five graduates last year, with accounting having zero.
Five undergraduate programs are being phased out: art, chemistry, foreign languages, mathematics, and religion, as well as a master’s program in criminal justice.
“These disciplines will continue to be part of the core curriculum for undergraduate Averett students of all majors, but they just won’t be offered as a degree program. Current students in impacted majors will still complete the degree for which they came to Averett,” said university spokesperson Cassie Jones.
Averett has 1,200 undergraduate students and 200 graduate students, according to SCHEV.
Limiting academic offerings will help the university stick to what it does best, Powell said. “Averett can be anything, but it can’t be everything,” he said.
Reevaluating tuition
Powell said he also wants to reevaluate tuition costs to make attending Averett more affordable for local and regional students. He plans to suggest this to the board, he said.
Averett’s tuition, room and board, and fees for the upcoming academic year total $53,360.
Nearby schools generally cost less than this. In-state tuition, room and board, and fees cost about $25,600 at Radford University and about $30,000 at Longwood University, both public colleges. Among private schools nearby, the annual cost is about $37,000 at Liberty University, around $42,000 at Ferrum College and about $50,000 at the University of Lynchburg.
Prioritizing local students could include strengthening partnerships with Danville Community College. Powell said he’s met with Cornelius Johnson, who was just named president at DCC.
It should be “almost automatic” for students to start their education at DCC and then transfer to Averett for a bachelor’s degree, Powell said.
Powell, who served most recently as interim president at Frederick Community College in Frederick, Maryland, said that community colleges play a crucial role in a community and in partnership with four-year universities.
Before that, he led Mount Saint Mary’s University in Maryland from 2003 to 2015.
Enrollment numbers for the upcoming fall semester have not yet been finalized. But Powell said he expects them to be lower than the previous year, which had an incoming freshman class of about 256, according to SCHEV data. He’s preparing the budget to reflect that, he said.
Listening and learning
Being new to town, Powell said he plans to do a lot of listening.
At 72 years old, Powell “happily” came out of a brief retirement to lead Averett, he said. He moved to Danville from Gettysburg, Pennsylvania, where he lived with his wife.
“I don’t want to be like a carpetbagger coming in here and saying, ‘I know the answers,’ because I don’t,” he said. “I’m going to be listening to a lot of people.”
He met with Danville’s city council last week, he said, to learn about the city’s relationship with the university.
“We only have ourselves and our community,” he said. “If we were a public institution in this situation, it would probably be up to the governor or the legislature to help us out. But we’re not.”
He’s confident that the school will recover, he said.
“These are tough times, but are they the toughest? No,” he said. “Averett has been around for 166 years. … How about the Civil War? That was a tough time for Averett. In other times throughout the history of America, Averett has faced challenges, and we’ve always been able to come out of them.”
Powell said he wants to be accessible to the community. He is living in the house that serves as the president’s office on Main Street.
“They sold off the old president’s house, and I said, I’ll bring a tent,” Powell said.
Correction: This story initially included an inaccurate list of academic programs that are being discontinued. The story has been updated with the correct list.
