Lake College in Redding has done a great job helping many....thanks for being part of our community...and here is to hope the new Technology Institute can carry on as Lake has...
Denver firm takes over Redding's troubled Lake College
The college closed Friday and promptly reopened as the Institute of Technology. Students arrived on the Redcliff Drive campus Friday morning to find a large banner announcing the school's new name covering the Lake College logo on the white, two-story building.
Lake College students were told Friday they will be able to complete their certificate programs at the Institute of Technology through a "teach out" program under an agreement approved by the federal Department of Education and the national Accrediting Commission of Career Schools and Colleges of Technology (ACCSCT).
The Institute of Technology has its headquarters campus in Clovis with branches in Modesto and Roseville. The school seeks federal permission to open a branch in Redding at the former Lake College campus.
Jim Haga, CEO of Brightstar Education Group, the firm that owns the Institute of Technology, said there are "big plans" to expand program offerings in Redding once branch approval is granted.
Brightstar will first swap out all of Lake College's computers for new machines. Soon, crews will start remodeling the Redcliff Drive building to create 5,000 square feet more of classroom space inside, said Haga, a former Kaplan Higher Education executive.
The firm intends to hire more instructors and staff as it boosts enrollment from the current 140 students to about 250 students over the next year, he said.
Brightstar hopes eventually to add associate degree programs in criminal justice, accounting and human resources at its Redding branch. The firm also plans technician certificates in pharmacy and heating, air conditioning and ventilation (HVAC).
The Institute of Technology has gotten state Board of Vocational Nursing permission to offer a licensed vocational nursing program at the Redding location, once the branch is approved, Haga said. Brightstar would pay for students to take their nursing boards, he said.
Richard Schofield, who was vice president at Lake College and will continue in a similar capacity at the Institute of Technology, called the Brightstar takeover a "step in the right direction."
"For a long time we had limited resources," Schofield said. "This will allow us to offer a much higher quality of education."
Lake College students are relieved they're going to be able to finish the programs they started, said Kathi Daily, student services adviser. She described the change in the college as "exactly what Redding needs."
Nursing student Rick Ortega said he initially had questions about the teach-out agreement forms students received Friday. Students have been asked to sign and return these forms within 10 days.
Ortega said he was suspicious after a long silence from campus administrators about what was happening with the college. Instructors had gone weeks without pay during the transition and no adequate explanation was given, Ortega noted.
But Ortega said he's confident the teach-out agreement with the Institute of Technology is legitimate after further conversations Friday with administrators, who were finally free to talk openly since the federal Department of Education had approved the takeover.
"It looks like maybe things really worked out," Ortega said. "Hopefully it will turn out to be a big success. I feel extremely good about it, but I'm still really upset the transparency wasn't there, especially since no sale went through."
Haga confirmed Brightstar never actually bought Lake College, although the firm tried to strike a deal with owners Jim Koenig and Gary Armitage.
Koenig, a Redding real estate investor, and Armitage, a former Santa Rosa-based financial planner, are named in multiple lawsuits claiming investor fraud. The two men also face possible indictment by the state Attorney General's Office for an alleged Ponzi scheme involving $250 million and some 2,000 mostly elderly investors.
The Redcliff Drive building was headquarters for Koenig's firm, Asset Real Estate Investment Co. (AREI), until it moved in late 2006 to a new building less than a mile away on Hemsted Drive.
Koenig owned the Red- cliff building until February, when it transferred to Lakeside Mortgage Fund LLC through a trustees deed foreclosure, according to Shasta County Assessor records.
Lakeside has been another Koenig-related corporation, and Koenig at one point earlier this decade briefly took over the firm. But Koenig has no current control of the Redcliff Drive building, Haga said.
Brightstar will lease the building from Lakeside and remodel it with that firm's permission, he said. There are no plans for Brightstar to own its Redding campus.
Brightstar made the first overture to Koenig and Armitage to buy the Lake College business, which was struggling financially. The Institute of Technology had three central valley campuses and a fourth made sense from an operations standpoint, Haga said.
Haga declined to comment on his negotiations with Koenig and Armitage or describe the deal with the federal government in detail.
"Lake closed and we partnered with the U.S. Department of Education to conduct a teach-out of their students at our expense," Haga said in an e-mail.
The Institute of Technology will keep "the majority" of Lake College instructors through the teach-out period, he said.
Lake had laid off at least three employees in a restructuring before the takeover. Those employees could apply to work at the Institute of Technology, Haga said.
But any outstanding payment obligations of Lake to its employees stay with Lake College, he said.
"Whatever happened, happened in the past," Haga said. "Lake College is closed."
Jennifer Bare, a Clinical Medical Assisting and Medical Office Administration and Billing instructor, has filed a wage claim against Lake College with the state Department of Industrial Relations for $4,137.86 in back pay owed since early January, records show.
Bare was the only Lake College employee to file a wage claim as of Thursday, said Erika Monterroza, public information officer with the state Department of Industrial Relations.
Martha West, a University of California at Davis law professor, said the Institute of Technology teach-out agreement with the federal government sounds like it's designed to protect tuition-paying students but not necessarily school employees.
"These people are just left high and dry," West said of instructors. "They have to get in line with the other creditors."
Brightstar Education Group, founded in 2004, plans to expand in California and other states with a $50 million capital investment from parent company Arlington Capital Partners, a private equity firm, according to the firm's Web site.
The three Institute of Technology campuses are ACCSCT-accredited and offer medical, business, technical, culinary and other vocational programs.
Lake College was also ACCSCT-accredited.
Reporter Scott Mobley can be reached at 225-8220 or at smobley@redding.com.
This was in the Record Searchlight today....thanks, Scott.
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