Woodfin calls Birmingham-Southern closing ‘heartbreaking’: Will it hurt Alabama’s economy?

The City of Birmingham had offered its share of requested funding to keep Birmingham-Southern College in business, but the college announced today that the college will be closing in May after the state never delivered on the $30 million loan the college requested.

Birmingham Mayor Randall Woodfin lamented the loss in a statement released today.

“Word of the decision to close Birmingham-Southern College is disappointing and heartbreaking to all of us who recognize it as a stalwart of our community,” Woodfin said.

“I’ve stood alongside members of our City Council to protect this institution and its proud legacy of shaping leaders. It’s frustrating that those values were not shared by lawmakers in Montgomery.”

He also offered kudos to Birmingham-Southern’s final college president, Daniel Coleman, who had served as a financial advisor to Woodfin on his first mayoral campaign.

“To President Coleman, you have our undying gratitude for your relentless pursuit of solutions during this difficult time,” Woodfin said. “Your dedication to BSC will not be overlooked. And to the many students past and present who call BSC home, know that you are part of the fabric of this city.”

Last year, Birmingham-Southern College touted its value to the state by issuing an economic impact statement.

Birmingham-Southern released a study by M. Keivan Deravi of Economic Research Services Inc. that asserts the college has an impact of $97.2 million annually on Alabama’s economy.

The private liberal arts college, founded in 1856, asked for $30 million in funding from the State of Alabama, $5 million from the City of Birmingham and $2.5 million from Jefferson County.

“Dr. Deravi’s study validates the fact that a $37.5 million investment by the public sector can return nearly a billion dollars in direct impact over the next 10 years to our state’s economy,” said BSC President Daniel Coleman in a statement released with the economic impact study. “That’s a great deal for city, county, and state taxpayers.”

Deravi based his economic impact statement on recent financial information from the college. BSC has 292 employees who were paid a total of nearly $21.7 million in salary and benefits in fiscal year 2022. It had 972 full-time students, 604 of whom were Alabama residents, with 40 percent from Jefferson County.

The impact statement estimates that each student spends $12,690 on retail, rental of real estate, utilities, recreation, gas and other expenses, a total of more than $11 million. Add in $19.5 million in in-state spending by employees and $15.1 million in in-state spending on goods and services, for a total of $45.7 million in direct in-state spending, the statement said.

On Nov. 28, the Birmingham City Council voted to offer Birmingham-Southern College two $2.5 million loans to stay open, with the first contingent on a fall reopening, and the second with long-term contingencies. Both those loans were paid out to the college and under the agreed-upon terms will have to be repaid to the city.

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