Stockton halts expansion, holds raises and hiring amid aid freeze, revenue loss

{child_byline}CLAIRE LOWE

Staff Writer

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ATLANTIC CITY — Stockton University is putting a freeze on its plans to expand its campus in Atlantic City, among other spending, in response to the financial constraints it is suffering due to the COVID-19 pandemic.

After months of waiting, $4.6 million in additional state aid was finally released to Stockton this winter, allowing the college to move forward with plans for the second phase of its Atlantic City campus.

But the college only received one payment from the state when the money, along with millions of dollars in other state aid, was put right back into reserve in late March as the virus closed schools and college campuses and halted all nonessential business, resulting in record unemployment claims and bringing the state’s revenue stream to a trickle.

Stockton President Harvey Kesselman said the college’s expansion plans and many other capital projects have been put on hold to account for about $11 million, or 5% of the university’s operating budget, in lost and frozen revenue because of the pandemic.

“There really is no tabletop exercise that can prepare an institution for a pandemic like this,” Kesselman said in a video call Tuesday.

It wasn’t just the additional revenue that was frozen, Kesselman said. The state’s final three regular aid payments — totaling $6.9 million — were also put on hold. Then there is the $6.3 million in refunds and credits issued for students who were living on campus this spring and moved out in mid-March and an estimated $2.5 million in lost revenue from housing, parking and event fees, both of which add to the financial strain.

In response, Kesselman said the college implemented an immediate freeze on all nonessential expenditures — travel, professional development, overtime, temporary employees — and was able to save about $8.3 million. The remaining $3 million in savings was realized through hiring freezes and a hold on promotions or raises.

Stockton is set to receive $10 million under the federal CARES Act passed in the wake of the disease, $5 million of which will go directly to students, but how that will be distributed is still being worked out.

Nicole Kirgan, spokeswoman for the Office of the Secretary of Higher Education, said it is regularly communicating with institutions across the state to assess the financial impacts of the crisis.

“Currently it is too soon to forecast how the state budget will be impacted and shaped in the coming months. To that end, the Department of Treasury, in coordination with the Legislature, is preparing for next steps,” Kirgan said, adding OSHE has been regularly updating its COVID-19 Resource page, which includes guidance and other information.

However, the spending freeze has not stopped Christopher Paladino, president of Atlantic City Development Corp., which is developing Stockton Phase II, from moving ahead with permitting and planning.

“The Stockton Phase II project is critical to the future of Stockton expanding its mission in Atlantic City and it’s critical to the Chelsea neighborhood continuing to move forward,” Paladino said Wednesday.

A groundbreaking scheduled for the $64 million project, a 400-bed residence hall across from O’Donnell Park on the site of the former Eldredge building, was scheduled for March 27 but canceled due to social distancing regulations put in place in early March.

Paladino said AC Devco is still applying for its demolition permits, drawing up plans and getting cost estimates.

“We’re continuing to do everything that we would normally do during this time,” he said. “You just need to be ready.”

He is still hoping for financial closing this fall and being in full construction mode next year.

The college is also seeing a bright side — summer registrations are up slightly from last year. All summer classes will be online, as opposed to the 50% in normal years, and the college will still honor previously agreed to discounts for students who have already registered.

“Right now we are ahead in summer registrations, so I’m not ready to throw in the towel,” Kesselman said.

He said that last year, Stockton had the largest growth among its state peers for full-time students. He thinks interest in the college will continue to grow and is hopeful that students will return to campus in September.

“I’m an optimist. We’re going to plan both ways. I have hope. I hope, I really do, that we’re back to some sense of normalcy in the fall,” Kesselman said.

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