Resident urges council to vote down Cumberland donation

Jacob Smith • Apr 13, 2018 at 4:46 PM

Lebanon realtor and former member of the Cumberland University Board of Trust Greg Dugdale held a luncheon Friday at Sammy B’s in Lebanon to urge Lebanon City Council members to vote against a proposed donation of $850,000 to Cumberland University.

The council approved the first reading of a proposal to donate $850,000 to the university to buy about 3 acres of land for a development that would feature about 70 units of student housing and retail space, dubbed Cumberland Corner, despite hesitance from some city leaders. The council has a second vote planned for Tuesday before it’s either approved or denied.

Dugdale invited councilors, as well as Lebanon Mayor Bernie Ash, to the luncheon, along with about 25 of Dugdale’s colleagues, and gave each councilor time to speak briefly on where they stood. The only council member not present was Ward 5 Councilor Tick Bryan.

Ash spoke out against the project due to the amount of the donation, which he said is about four times the city’s donation budget.

“I’ve been involved in local politics for 20 years,” said Ashe. “This is the biggest issue I’ve seen come along in that 20 years. The most phone calls, emails that I have ever received.”

Councilor Rob Cesternino, who proposed the donation, argued for the donation to the people at the luncheon. He cited the economic impact study done, which estimated around $10,000 from new students.

“I was invited into and accepted into this community a decade ago, and these are some of the greatest people I know in this community,” said Cesternino. “The thing that I love about this is we all have the same intent, which is to make Lebanon the best place possible.”

Chris Crowell, Joey Carmack and Fred Burton all said they were open to listen to Lebanon residents, though Burton questioned the legality of the proposal.

 “I don’t have a problem with Cumberland University. I’ve had two granddaughters who have graduated from Cumberland,” said Burton. “The only thing is, we’ve got two legal opinions on this transaction, and they were very explicit. The one thing I do; I try to follow the law, to serve the law. So, I’m here to listen.”

Dugdale talked about the size of the donation in relation to donations made to other private organizations, such as the Wilson County Civic League, which received about $5,000 from the city last year.

“It’s not about giving to Cumberland; it’s about the scope,” said Dugdale. “Five thousand dollars versus $850,000, that’s over 150 times [the amount donated to the Civic League].”

In his argument against the proposal, Dugdale cited a 2006 study called “The economic impact of colleges and universities,” by John Siegfried, Allen Sanderson and Peter McHenry, who work at Vanderbilt University, the University of Chicago and Yale University, respectfully.

“We see two reforms for more transparent and useful college economic impact studies: presentation and substance,” said the conclusion of the study. “Regarding presentation, studies of public universities should stop claiming ‘For every $1 the state legislature spends, the university returns $X to the state…’ At best, such statements are meaningless. At worst, they may delude decision makers into thinking (incorrectly) that the marginal return on investment in higher education is several orders of magnitude more than returns on other public investments. If the returns to higher education were as high as these statement imply, states and the private sector would be building universities frantically.”

Dugdale also cited an email from Steve Osborne with the state comptroller’s office, which called into question the legality of the proposal.

“From the ordinance, and from media reports, it appears that the primary purpose of this proposal is economic growth for the city,” said Osborne in the email. “Although the university may be an economic generator for the city, I do not believe the city could rely on this being a year-round service benefiting the general welfare of the city’s citizens. I would recommend that the city confer with its attorney and its MTAS consultant to determine whether the proposed donation meets the statutory requirements of Tennessee Code Annotated 6-54-111.”

However, Lebanon’s charter authorizes the council to give donations to entities such as schools. 

“The charter expressly authorizes the city to donate to charitable organizations and educational institutions,” said Lebanon city attorney Andy Wright, who was not at the luncheon. “It does not set forth a limit. The same authorization exists in statutory law for general law chartered cities. The legal ability to do it is clear. Whether we should is up to the elected officials.”

Dugdale, who deals in real estate, said he had no desire to buy the land himself if the council didn’t approve the donation to Cumberland.

“I implore the council to reconsider this,” said Dugdale. “The relationship among us is at risk over this. Cumberland University’s is at risk over this. I’ve told everybody that would listen to me, you’ll thank me in a year, and the worst thing that could happen is if you pass this.”

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