Lender Seizes NYC Private School’s Classrooms After Debt Talks
(Bloomberg) -- The Blue School in Manhattan, a private academy that missed a debt payment in September after the pandemic cut enrollment, is losing some of its real estate.
The school, founded by members of the Blue Man Group performing-arts troupe, said in a statement Friday that it has agreed to relinquish the two Financial District condominiums that house its upper-elementary and middle-school students to its Dallas-based lender, Preston Hollow Capital. Those grades would be shifted back to its original campus downtown.
“This redesign of operations and financial structure will help ensure Blue School’s financial health and long-lasting success,” the school said in a statement.
Representatives for Preston Hollow did not respond to requests for comment.
The Blue School sold $39 million of bonds in 2016 to expand its footprint in the Financial District, joining a debt-fueled building boom among schools vying for the children of New York City’s elite. The Blue School charges tuition as high as $52,200 for the 2020-21 school year and emphasizes values like the importance of play and creativity.
The pandemic, however, has hurt enrollment as parents rode it out elsewhere or questioned the high price tags at a time when instruction was shifting online. The Blue School has been offering a mix of online and in-person instruction during the pandemic.
Before Covid-19, the school said it had been on an upward trajectory.
“In January 2020, Blue School was in the midst of the highest admissions and fundraising year in its history,” the school said in the statement. “However, with the arrival of the COVID-19 pandemic in New York, the school faced numerous challenges, including financial headwinds associated with increased operating costs and decreased enrollment.”
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