Layoffs, Budget Cuts and Aloha Tower: What’s Next for Hawaii Pacific University?

A change in leadership, job cuts, a sharp jump in tuition, and faculty and staff job cuts have shaken Hawaii Pacific University, even as it embarks on an ambitious plan to develop Aloha Tower Marketplace as its new core.

Former president of Hawaii Pacific University, Chatt G. Wright, joined the school in 1972 while it was still a fledgling business college.

Photo: Courtesy of HPU

In the years leading up to Chatt Wright’s 2011 retirement as president of Hawaii Pacific University, he spoke about his new vision for the university. It included a move away from an urban-centered campus and instead focused on a $100-million expansion of the university’s 130-acre Hawaii Loa campus in Kaneohe. He envisioned a quaint hillside residential university not unlike that of Chaminade University or University of Hawaii-Hilo.

After 35 years at the helm, Wright left the university in the hands of new leadership: New Zealand-raised Geoffrey Bannister, the former president of Butler University and Schiller International University.

Three and a half years later, against the backdrop of steadily declining enrollment, budget shortfalls, and layoffs of faculty and staff, Bannister is forging ahead with a new plan for the school, one that, at first glance, appears different from the one Wright left behind. The plan, which includes a $54-million acquisition and redevelopment of Aloha Tower Marketplace, could revitalize a university riddled with challenges. For HPU’s new leader, Aloha Tower—not Hawaii Loa—will become the new hub of student residential life, activity and learning.

Try to convince Bannister the school’s new strategy is a departure from Wright’s final vision of a hillside campus and he won’t buy it. Instead, Bannister sees it as remaining true to Wright’s original plan for the school, as an urban professional university with global reach.

“One thing I’ve had to do a little bit was try to get the university back to that founding view that he’d put in place,” Bannister says. “It was a stroke of genius for Chatt to have come up with this 35 years ago. It is really what the world needs more of from its private universities. So many of the small liberal-arts colleges on the hills, all across the country, are going out of business. But it’s the urban-centered, regional, comprehensive university that is doing well.”

Simultaneously, the university is experiencing its share of transition pains.

For starters, a host of administrators who served in Wright’s inner circle have since left the university, with new executives selected by Bannister, many of them from Mainland universities, now occupying offices overlooking the school’s current home along Fort Street Mall.

As a private university, HPU isn’t required to tell us much about its current financial situation (unlike its public counterparts). But recent signs point toward trouble. Enrollment has been steadily declining, with last year’s head count down by as much as 10 percent over the previous year. To confront the financial shortfall, the university has cut staff, pared back the number of classes offered and cut down on part-time lecturers. Faculty who qualified were offered early retirement packages and, at the end of the spring semester, administrators chose not to renew the contracts for 18 additional faculty and about 40 staff, sources say.

With these challenges front-of-mind, some have been quick to criticize the university’s administration for investing millions in a new campus at Aloha Tower, while simultaneously cutting its faculty and staff. Administrators, however, point to Aloha Tower as central to the university’s plans for future student recruitment and retention—and renewed financial prosperity.

Aloha Tower’s Promise    

Bannister arrived quietly on campus three-and-a-half years ago, spending the first few months of his term listening to faculty, students and alumni about what they’d like to see from their university. From these talks, his vision, which would eventually include Aloha Tower, began to emerge.

Students talked about a lack of gathering spaces on upper Fort Street Mall, which serves as the main campus for the university, and the nearly nonexistent university-provided student housing. Faculty lacked offices and spaces to meet with their students. And alumni didn’t feel they had a place to come home to. All talked about the less-than-desirable elements of Fort Street Mall, including a visible and sometimes confrontational homeless population.

Janessa Canilao recently graduated from HPU in May with a degree in psychology. Upon transferring to the university in September 2012 from the San Francisco Bay Area, Canilao discovered HPU was good for some things—small class sizes, caring professors with connections to the professional world, and an emphasis on real-world experience and internships. But it wasn’t good for feeling like part of a larger student body.

“A lot of students feel like there’s not really a community within HPU. Everyone just goes there for class and then leaves. No one wants to hang out in the area, it’s hard to make friends. That made my first year kind of hard,” she says.

Fort Street Mall itself is part of the problem. “There are a lot of homeless people. The area is sometimes just uncomfortable,” she says.

Similarly, Bannister recalls his first two weeks on campus, looking onto the mall from Wright’s former office across from the Cathedral of Our Lady of Peace. Potential students and parents were being led on a walking tour of Fort Street Mall. The reactions convinced Bannister HPU had a real problem.

“I would watch the faces of people on the tour. You could see mothers and fathers looking around like, ‘I’m not leaving my kid here,’” Bannister says.

It was then-Honolulu Mayor Peter Carlisle who first recommended in 2011 the university take over the struggling Aloha Tower. At that stage, the state had already signed an agreement with a California developer, who then approached HPU about participating in the redevelopment. The university agreed, but required a buyout provision in case it didn’t agree with the direction of the project. Together they acquired Aloha Tower for $14 million.

For Bannister, Aloha Tower held the promise of finally realizing a permanent and identifiable location for HPU in the heart of downtown Honolulu. For decades, the university has been the largest leaseholder downtown, renting space in as many as eight different buildings.

“It was a very smart idea to lease space in the downtown area, but it’s meant that we couldn’t afford to invest in creating specialized facilities that a university needs,” Bannister says, citing the university’s need for student common spaces and facilities for its athletes.

In addition to filling the university’s needs for student facilities, “we also see (Aloha Tower) as a gathering place for the city. We see it as a center for the university, but it’s also a spot to see athletic events, community events, attend children’s events on the weekends—all sorts of activities that will connect HPU to the city,” Bannister says.

Soon after acquiring the marketplace, though, the university was forced to ditch its partner. The developer, Bannister says, planned to use the space as a live concert, nightlife and events venue that would include “heavy alcohol consumption.”
“In our view, (those plans) were not consistent with our interests or the neighborhood’s interest, compared to something more family-oriented,” Bannister says.

For HPU, the Aloha Tower redevelopment is a coup, more than doubling its dormitory space by adding at least 270 beds to the second floor of the marketplace. The university currently has 210 beds in its aging dormitories on the Hawaii Loa campus, which are primarily used for first-year Mainland and international students. Without available housing, HPU students rent university-sponsored apartments downtown or at the edge of Waikiki, or otherwise fend for themselves in Honolulu’s tight rental market. Bannister readily admits Aloha Tower doesn’t solve the university’s housing problem, but it represents a step forward.

The 160,000-square-foot, redeveloped Aloha Tower would also include a fitness center, auditorium space for concerts and public lectures, classrooms, a student center and common areas for HPU’s student organizations. More than 84,000 square feet would be dedicated to retail and entertainment vendors, which would include current tenants Gordon Biersch Brewery Restaurant and Hooters Restaurant. The university has announced at least one new tenant, Barnes & Noble, which will serve as both the university bookstore and a mass retailer for the general public.

John Hart, professor of communications at HPU, the only faculty member who was willing to comment on the record for this story, says he believes Aloha Tower will usher in a new era for HPU, after years of status quo under former president Wright.

“A lot of people thought an upgrade in physical plant wasn’t necessary,” Hart says. “But if you think about walking a parent onto Fort Street Mall and saying, ‘Your child is going to go to school here,’ versus walking that parent into Aloha Tower, I think you’re going to get a very different reaction. And it’s one we need to have in order to stay competitive.”

The university has long had an issue with providing space for its athletic teams. Part of the university’s original plans for Aloha Tower included renovating space at Pier 10 to create an athletics facility for the university’s NCAA Division II men’s and women’s teams. But NCAA space regulations forced the university to scrap its plans.

Vince Baldemor, executive director of athletics, says the university’s teams borrow and rent space across the island. “We go everywhere from Waipahu to Waikiki to Kaneohe for practice. For games, we rent everywhere in-between,” Baldemor says.

“Ideally, one of the things we would like to build is a home base, somewhere student athletes can call home and train and practice.”

HPU is hoping its new model for Aloha Tower, as part university campus, part community gathering place, and part shopping and entertainment center will finally mean success for a development that has struggled since its inception.

When Aloha Tower Marketplace was first conceived in the 1980s under then-Gov. George Ariyoshi, it was envisioned to include a retail marketplace, an office building, condominiums, a hotel and underground parking. But, in the early 1990s, only the marketplace was built. Because the rest of the development was not fully realized, many say Aloha Tower Marketplace struggled and foundered.

Stephany Sofos, a Honolulu real estate broker and appraiser, says a college campus isn’t necessarily Aloha Tower’s “highest and best use.”

“You don’t put dormitories on oceanfront property,” Sofos says. “Its highest and best use would be retail, but it was never able to work because it was designed as a festival marketplace. Festival marketplaces need something to support them, something to feed them, like hotels or office towers.”

Only festival marketplaces with established feeders end up doing well, Sofos says. “This center never had a chance,” she says.

Chatt Wright University  

View from the university’s Hawaii Loa campus, formerly Hawaii Loa College in Kaneohe.

Photo: Courtesy of HPU

For decades, the state’s largest private university was synonymous with the man at its helm, businessman and San Francisco native Chatt G. Wright. He joined HPU, then known as Hawaii Pacific College, in 1972, when it was a two-classroom business college with 57 students, less than a dozen faculty and staff members and a $200,000 budget.

As he claimed his place as president in 1976, Wright began to shape a vision for the school that is still its hallmark today: international education. He and a handful of faculty members began to sell Hawaii and the school in Asia, on the Mainland and in local high schools.

Michael Chun, former president of Kamehameha Schools, has served on HPU’s board of trustees since 1989, including a recent stint as its chairman. He credits Wright for building the university up to where it is today.

“It’s unbelievable what Chatt did. How many people do you know who can look at their lifetimes and say, ‘I took a small business program and I created a university’? It’s astounding,” Chun says.

Chun credits Wright for some of HPU’s biggest milestones, including the historic merger with Hawaii Loa College in 1992, which added to the university’s liberal arts base, and its then-affiliation with the Oceanic Institute in 2003, which enabled the university to expand into comprehensive research. Chatt also left HPU with an endowment estimated at more than $80 million. When he became the university’s president in 1976, it had no significant endowment.

“He was a businessman. He relied on his business instincts to create a budget, an endowment, to convince the movers and the shakers in the business community to buy into this concept,” Chun says.

Unlike most university presidents, who spend an average of seven to 10 years at a school, Wright made HPU his permanent home, guiding the school for 35 years. In fact, Wright was at the university for so long, he cashed out on more than $873,000 in retirement-plan payments accrued from 1994 to 2008, according to the school’s federal 990 filings.

In a September 2005 interview with HONOLULU Magazine, Wright said, for him, HPU was part passion, part destiny. “This has been my baby, really. I have been fortunate enough to be involved with something I could be with for such a long time, and I love what I’m doing here.” He noted how he coincidentally joined HPU on Sept. 17, 1972, and how the university was chartered on Sept. 17, 1965. Sept. 17 is Wright’s birthday.

Chun says Wright was the right president for the right time in HPU’s history.

“In any organization, there is a time for different kinds of leadership. We can honestly look back and say, ‘Thank the Lord’ for putting him, not someone like him, but him in place. We would not have HPU if it had not been for Chatt Wright,” he says.

A Rocky Transition

Provost Matthew Liao-Troth joined HPU a year ago, enticed by Geoffrey Bannister’s vision to transform the university into a comprehensive, research institution.

Photo: Olivier Koning

Chun readily admits that Wright took a business approach to managing and growing HPU. When Wright retired, he says, the university began looking for a different kind of leadership, one that would solidify his vision of global education, while guiding the university’s academics into the future.

Enter Geoffrey Bannister, a Ph.D. in geography and the former long-time president of Butler University in Indianapolis, Ind., from 1989 to 2000. From there, he became president of Schiller International University and of Cultural Experiences Abroad, one of the country’s largest providers of study-abroad opportunities. In Bannister the university found the right mix of academic and international focus that could move HPU from its fledgling years into a period of academic excellence, Chun says.

In an interview with Pacific Business News in March of 2011, prior to his arrival in Hawaii, Bannister described a university “trending toward expansion.” He talked about continuing Wright’s vision of a multimillion dollar buildup of HPU’s Windward Hawaii Loa campus and hiring “at least 100 new faculty.”

The reality, however, was Bannister inherited a university that had already begun experiencing the effects of a financial decline. While the school would not reveal exact figures, it would say the university had been experiencing a downturn in enrollment—a drop of several hundred students a year—since 2008, when the national economy began to flatline.

Minutes from an April 6, 2009 Faculty Assembly meeting appears to bear that out. In it, the faculty assembly chair, assistant professor Dale Burke, at the time, described “disturbing enrollment numbers,” including a 10.3 percent decrease in continuing students for the fall 2010 semester. He also described cash-flow problems and a decrease of some $4 million in the university’s budget. “Endowments during this same time have gone down from $90 million to $60 million,” Burke writes. The minutes end with a final comment from the President’s Council: “The way out of our budget crisis … grow the student body!”

When Bannister arrived in 2011, enrollment sat at about 8,000 students. In the next year, the university lost more than 600. For a private university, which relies almost solely on revenue from tuition to pay faculty and keep the lights on, the decline put into motion a series of painful cuts and money-saving measures.

“Universities were in dire straits across the country. We brought in a financial consultant who conducted a forensic analysis of our long-term financial health. The outcomes were very sobering,” Chun says. “We made it clear to Geoff he needed to address these issues and come up with a solution to these challenges.”

Faculty members we spoke with were unwilling to talk on the record for fear of retaliation by the administration. (Speaking as a writer who has covered education in Hawaii for several years, it seems highly unusual for normally freethinking and opinionated professors—whether at public or private universities—to decline to speak to the media.) The faculty we spoke with described a culture of low morale and uncertainty, with many professors scared for their jobs. The university has drastically cut adjunct and part-time faculty, leading to a reduction in the number of course sections offered, they say. The university has also slashed retirement benefits from 11 percent contributions to 6 percent, sources say.

Until this past semester, the university had not touched any of its approximately 250 full-time faculty members. But, at the end of the school year, when 60 professors reapplied for renewal of their five-year contracts, 18 were let go. Among them, sources say, were theater professor Joyce Maltby, who ran the university’s Paul and Vi Loo community theater on the Hawaii Loa campus, and Joseph Ruszkowski, an assistant professor and the director of HPU’s Sea Warrior Band. Both worked in the university’s Arts and Humanities Department, and were seen within the community as the catalyzing forces in their areas. (It appears Maltby will be directing plays next school year, however.)

The university would not comment on individual cases, but a spokeswoman provided this statement: “The affected faculty members were provided an opportunity to request reconsideration, and President Bannister met with a number of them individually. The university, of course, made efforts to provide accommodations or provide transitional assistance as appropriate. HPU continues to hire part- and full-time faculty throughout the year, dependent upon student demand. Already, one or more of those faculty members has been rehired by the university as part-time faculty where student demands were shown.”

The university was also unwilling to say how many staff members have lost their jobs over the past two years, but one source estimated at least 40 were let go at the end of this most recent school year. By some accounts, the university gave little notice to dismissed employees and, in some cases, people heard they had lost their jobs through the grapevine.

According to minutes from a June 19 town hall meeting with HPU’s provost, Matthew Liao-Troth, an unnamed faculty member said, “It is degrading when staff, such as librarians and CAIT (Center for the Advancement of Innovative Teaching) staff are terminated in such a way that they are given one-hour notice, escorted off campus by security, and have their IDs photocopied and given to security so that they will no longer be admitted.”

Liao-Troth told faculty that some layoffs had not been handled well, and acknowledged that some staff members had heard rumors they would be terminated before they were officially notified.

During the meeting, Liao-Troth said the university had been planning for a 5 percent budget shortfall, “however, it turned out that we were much worse off than a 5 percent budget shortfall, which is what necessitated the urgent process that was followed,” according to faculty assembly minutes.

In an interview with HONOLULU, Liao-Troth said it is unfortunate that faculty members fear for retaliation from the administration.

“We’re constantly in contact with faculty to figure out what their needs and desires are. It’s sad that people feel fearful because that’s not the type of culture I’m trying to cultivate. I’m trying to cultivate a rich intellectual environment, where we can engage students,” Liao-Troth says. “As stewards of our students’ tuition dollars, we’re always looking at staffing, and we’ve been fairly upfront that we’ve eliminated some positions over the last year on the staff side. Faculty are in a different situation with long-term contracts. I can understand why they could feel this way, but it doesn’t affect them in the same way.”

The university’s annual tuition has increased by nearly $4,500 since Bannister’s arrival. Liao-Troth issued a statement to students at the end of last semester that tuition would increase from about $20,000 to $21,000, consistent with the university’s history of increasing tuition by at least $1,000 a year. Only in the transition from the 2011 to 2012 school years did tuition increase by more than that, by about $2,000.

Liao-Troth says HPU remains a good deal for private education. According to U.S. News and World Report, HPU is the third least-expensive university among private universities in the West.

When we sat down with Bannister and asked about the university’s financial troubles, he described a university that, under Wright, had grown too big to be financially feasible. Between 2004 to 2008, the university’s enrollment peaked at more than 8,000 students. At the same time, the university’s cadre of staff, part-time faculty, lecturers and full-time faculty had to grow to accommodate the increase in students, he says. When the nation’s financial crisis hit and enrollment began to drop, the university needed to bring its costs back under control.

“If you see a university today that isn’t adjusting its cost structure, they’re going to have to adjust it later,” Bannister says. “What happened in 2008 to 2009 was a fundamental change in the U.S. economy, and it’s not going back very quickly to where it was before.”

Bannister says the university had grown too big and should be below 7,000 students. “We either had to increase the cost or bring down the expenses, and we chose to do the latter,” he says.

Bannister’s current position of “right-sizing” the university does seem to contradict statements he made to the media early in his term. In September 2011, Bannister told Pacific Business News that he planned to grow the student body—not decrease it—to 10,000 students. Simultaneously, he said, he planned to expand the staff from about 1,500 to 2,000, over a five-year period, including the addition of 150 faculty.

The university has also adjusted its scholarship program and, on first glance, it appears to affect local students more than Mainland or international students. Since HPU’s tuition is double that of UH Mānoa, local students have come to rely on HPU to provide generous tuition waivers.

In a statement from a university spokeswoman, “The university adjusted its scholarship policy, not to decrease the amount of funds given to local students, but rather the opposite. The university wanted to provide financial assistance to more deserving and meritorious students.”

In addition, the university says it’s provided nearly $50 million in scholarships to Hawaii residents in the past six years. In fact, more funding is provided today, and to more students in Hawaii, than in 2008 to 2009 before the policy shifted, they say.

Moving Forward

Bannister’s long-term vision for the university includes bold and ambitious goals, notably for the school to increase its caliber of academics and eventually rank in the top 10 of the regional universities in the West, including Santa Clara University, Mills College and Loyola Marymount University.

HPU is currently ranked No. 71 out of about 150 schools in U.S. News and World Report’s college rankings of regional universities in the West. As a mid-tier school, HPU has a long way to go, but Bannister believes the transitions underway position the university to move in that direction.

“All day, every day, we’re working to make it a better university at every step by strengthening the academic programs, strengthening the credentials of the faculty and providing the facilities that a private university needs to succeed,” Bannister says.

Bannister points to HPU’s merger with Oceanic Institute, completed in January, as a major step toward becoming a comprehensive research institution. By some estimates, HPU’s Oceanic Institute brings in some $13 million in research money in aquaculture, sustainability and land-based agriculture. Oceanic Institute has been affiliated with HPU since 2003.

Provost Liao-Troth joined the university last year, attracted in part by Bannister’s ambitious vision for an academic- and research-oriented private university.

“Very rarely do you get to be involved in a university while it is going through a major transformation. Dr. Bannister has an audacious vision,” he says. “The university has evolved over many years and is taking some big steps right now to become a comprehensive master’s university.”

One of those steps is the university’s expansion to Aloha Tower, but it’s more complicated than that. Moving into the top tier will involve the university becoming more research oriented (already, outside of the Oceanic Institute, the university is bringing in some $3 million in research grant money, a vast increase from just three years ago). It also means having faculty who are renowned in their academic fields. Just a fraction of HPU’s students are enrolled in a graduate program, so part of the plan includes expanding the university’s master’s degree offerings.

To make HPU a “destination university,” it will need to build its reputation outside of Hawaii. “Instead of being the top private university in Hawaii, we want to be one of the top private universities in the West,” Liao-Troth says.        

A New Look

In spring 2013, the HPU administration sparked a mini social-media uproar when it unveiled new branding that retired the university’s long-time and iconic triple yin-yang seal for a more streamlined logo designed by the Jon Durante Design Group of Honolulu. The old seal—which featured the university’s motto, Holomua Me Ka Oiaio, meaning Forward with Truth—will continue to be used for diplomas, graduation and other official business, but the revamped logo has become the university’s new brand. The university could not say how much was spent on its rebranding efforts.