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Beckley likely to take big hit from MSU accreditation fallout

CHARLESTON, W.Va. -- The city of Beckley and much of Southern West Virginia stand to lose tens of millions of dollars in employment, business and economic revenue as a result of Mountain State University having its accreditation revoked last week.

"MSU is a very important part of the infrastructure of Beckley and Southern West Virginia," said Beckley Mayor Emmett Pugh. "MSU employs many people in the area, and we're not talking about minimum wage -- these are faculty salaries. You're talking about a major impact on the area."

 With its main campus situated in the heart of Beckley, MSU was a huge economic boon for the city. Kanawha Street in downtown Beckley is always adorned with blue and white MSU flags.

But as the serious problems at Mountain State University have mounted in recent years, Beckley's economic future -- and the economic future of the region -- has become increasingly tied to a university on the brink of permanent collapse.

  "MSU is our brick and mortar institution," said Pugh. "All the colleges and universities in the area provide a piece of the education puzzle, but as far as big infrastructure for Beckley, Mountain State was it."

The Higher Learning Commission, the regional monitoring agency that accredits MSU, withdrew Mountain State's primary accreditation last week, citing the school for debilitating breakdowns in leadership, failing to create a strong learning environment, and no proper oversight of academic program quality.

MSU was first warned of major problems at the school by the HLC in 2008 and was then placed on show-cause status in June 2011 for failing to correct some of the previous leadership and program issues.

MSU's Board of Trustees say they plan to appeal the Higher Learning Commission's decision in the upcoming weeks. MSU's accreditation loss is set to kick in Aug. 27. But once MSU appeals, the accreditation temporarily extends throughout the appeals process.

A five-member independent panel, chosen by the president of the HLC, would hear Mountain State's appeal. To win the appeal, MSU must show that the HLC's ruling was "arbitrary, capricious or not supported by substantial evidence."

MSU employs between 250 to 300 people in the Beckley area alone, said Ellen Taylor, president of the Beckley-Raleigh County Chamber of Commerce.

"When you have 300 employees who go out and buy cars and homes and eat in the area, it has a major influence on the community," said Taylor. "If MSU goes away, all those people don't have jobs and all that money they would have spent isn't here."

Mountain State University was the 99th-largest private employer in West Virginia last year, according to WorkForce West Virginia.

Unraveling the full impact of the university's potential collapse on the community of Beckley and on Raleigh County is difficult because the school is so interwoven into various aspects of the region's infrastructure.

For example, a 2008 university report said that MSU was instrumental in founding the Tamarack Artisan Resource Center and had provided 3,000 square feet of office space to the Tamarack Foundation for free. The staff of the Resource Center said in 2008 that they would "simply not exist" without the support of MSU.

The Tamarack Artisan Resource Center, funded by grants from the Appalachian Regional Commission, provides support for artisans in the Appalachian region by helping them to develop business plans.

A 2005 external survey by the West Virginia Independent Colleges and Universities attempted to put a total price tag on MSU's economic impact on Beckley and the Raleigh County area.

In terms of business volume, the study said MSU brought $78.5 million to the community in 2005. That same year, when MSU employed 1,050 people in the area, MSU employee compensation accounted for $26.7 million.

In state tax revenues, MSU generated $1.5 million in 2005, according to the study. 

The 2005 study is the most recent comprehensive estimate looking at MSU's impact on the area. Taylor said she expects the current economic price tag of MSU to be "significantly higher" than the 2005 numbers.

While legislators from U.S. Sen. Joe Manchin to state senators and delegates have said they will do all they can to limit the fallout of MSU's accreditation loss on the surrounding communities, the Beckley mayor says there's frankly not much he and the government can do.

"We can't cushion the economic blow," said Pugh. "Our job is to work with the current administration, and I have committed to [the MSU president] that the city is ready to do anything that they need. If this were a lawsuit, the city would file an amicus brief on behalf of MSU. But we can't really do much at this point."

Other local legislators say MSU and state officials must focus on appealing the HLC's decision rather than on steeling themselves for MSU to go under.

"We need to try and find a way to save Mountain State University, not just wave the white flag, give up, and try to find some other institution to come in here and take off," state Sen. Mike Green, D-Raleigh, told MetroNews on Monday. "I think we have to first and foremost fight this appeal process, and do what we can to help save Mountain State University."

In the past, the city of Beckley has done much to assist MSU in its growth and expansion.

The city of Beckley floated $11 million of bonds for MSU to refinance its debt and to build a multimillion-dollar, 200-bed student housing facility.

In the wake of MSU losing its accreditation, Beckley officials have said the city is not liable for any of the bonds issued for MSU. They are the sole responsibility of the university.

Reach Amy Julia Harris at amy.harris@wvgazette.com or 304-348-4814.


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