Hartford Business Journal

6 HARTFORDBUSINESS.COM | AUGUST 9, 2021 On The Record | Q&A Scheinberg makes big bet with $32M Univ. of Bridgeport purchase By Greg Bordonaro gbordonaro@hartfordbusiness.com M ark Scheinberg is a risk taker. Most entrepreneurs share that personality trait. Scheinberg, who essentially built East Hartford-based Goodwin University from scratch, has emerged as an authority on adult education and workforce development in the state. He's made several big moves recently including converting Goodwin College to Goodwin University in 2020 in an effort to raise the school's profile. His most recent big bet is leading Goodwin's $32 million purchase of the financially-ailing University of Bridgeport, a rare M&A deal in Connecticut's higher-education industry. The University of Bridgeport had been a money-losing operation for the last few years, even before COVID-19 created financial challenges for most colleges as they were forced to temporarily close campuses, send students home and launch virtual operations, almost overnight. In its most recently available financial disclosure, the University of Bridgeport posted an $8.8-million loss in fiscal 2019, while Goodwin posted a $3.2 million surplus, according to the National Center for Education Statistics. Goodwin currently has an enrollment of 3,317 students vs. 4,100 at Bridgeport. Scheinberg admits there is risk involved in the deal, but he's got a turnaround plan that includes launching more career-based and part-time programs — something Goodwin is known for — at the University of Bridgeport, which has traditionally positioned itself as a liberal arts school. Scheinberg said he expects Goodwin's new acquisition to lose money in the first year, but turn profitable by year two. Both schools are not-for-profit higher-ed institutions. Many people will be watching the deal including those with a financial stake in it. KeyBank and Liberty Bank helped finance the $32 million purchase of Bridgeport's real estate and academic programs. Meantime, state taxpayers also have a stake in the venture. The Department of Economic and Community Development will provide a $7.5 million low-interest loan, which will cover any first-year operating losses and help fund investment in the Bridgeport campus, said Scheinberg, who added Goodwin is matching that state investment. Scheinberg recently sat down with Hartford Business Journal for a virtual interview about the deal and other new developments at Goodwin University. Here's what he had to say. Q: Why did you want to make the University of Bridgeport deal and what's it mean for Goodwin University? This is something that will be transformational for both schools. University of Bridgeport is very much a STEM-based, career-based institution. They have doctorates in engineering and chiropractics and physician assistant programs. They have five doctoral programs and 23 master's degrees with most of them in technological subjects. Up until recently their engineering department was the largest in the state. I think about them like Goodwin University would probably look like in 20 years if we stayed on task and really worked hard. They have a lot of first-generation students. Goodwin University has much more short-term programming, workforce programming, we do have some graduate programs, but this is another level for us entirely. Goodwin is primarily a commuter school and so over the years we talked about whether we should open another spot somewhere. I liken us to a bank branch and you are only going to get a certain number of people to come to you within your geographic area. When we've done studies they've said we might want to look at the Bridgeport area. We thought about putting a satellite branch down there but we decided to partner with the University of Bridgeport instead. It was a smart deal but also a little risky in the middle of a pandemic. Everyone is running the other way and battening down. We have approvals for East Hartford to be a branch of Bridgeport and vice versa. We are separate institutions, we each have our own strengths and each have our own brands. We have a platform to open up all our most important and successful programs in the Bridgeport area with a brand new student population. It's a blue-ocean strategy. As an example of the synergies, Goodwin sits across from Pratt & Whitney and all of the University of Bridgeport engineers are going to be enormously attractive to Pratt. Q: How did the pandemic impact getting this deal to the finish line? First of all, Goodwin University wasn't really sidelined by the pandemic insofar as we have so much of our programming already designed to be done online. When the shutdown hit Connecticut last year we closed our campus on a Thursday and opened up virtually on Monday. We did get hurt because you have some students who are unsure about coming to school in the middle of a pandemic, especially in fields like health care. As an aside, Goodwin's student retention rate went up 6 points last year. Remember we have banking partners that had to lend to this deal. We asked them to do a couple of difficult things. Here's an institution that has lost a lot of money in the last few years and if we can't staunch that loss, it's going to drain us, at least that's what the banks are thinking in their minds. But more importantly higher education is not the place you want to invest in during the middle of a pandemic. So we had to have a very solid business plan to meet their underwriting standards. We had to have a really good sense of how this whole thing turns around and we've done that. We know that the number of graduate students at the University of Bridgeport is already more than it was last year. On the undergrad level we took a dip, largely because of the Goodwin University President Mark Scheinberg said he's got a plan to turnaround the financially-ailing University of Bridgeport. HBJ FILE PHOTO

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