Drew University’s new nursing school opens under financial cloud

Even as the doors open this month on a new $43-million building to house the inaugural nursing class at Charles Drew University of Medicine and Science, the university’s interim president warned that the long-struggling institution is already in danger of losing the facility.

Beginning in September, the university will be forced to begin burning through a reserve fund to make loan payments, Dr. Keith Norris said in an interview with The Times. Without assistance from a government agency, foundation, charity or some other organization, Norris said, within six months the school could run out of money to pay for the 120-student nursing school building.

Losing the building could put the entire university at risk, Norris said. The collateral for the loan is the university’s remaining assets, meaning that if Drew defaults on the loan, financial institutions could be in a position to seize the university.

“It’s a big struggle,” Norris said.

The university, based in Willowbrook, south of Watts, educates health professionals such as medical students, scientists, public health experts and X-ray technicians.

For years, the school was closely tied to neighboring Martin Luther King, Jr./Drew Medical Center, the Los Angeles County-run hospital where Drew’s resident physicians got their training. The hospital closed its emergency rooms and inpatient units in 2007 after it repeatedly put patients in danger of injury and death.

By then, the hospital’s struggles had already put Drew University on tenuous ground. In 2006, the county divorced itself from Drew, cutting the university off from the hospital.

Enrollment quickly fell from 700 to 350. By 2008, Norris said, Drew was losing almost $1 million a month. It was not until six months ago that the school once again operated in the black after the university laid off 70 of 400 employees, eliminated many contract workers and instituted salary cuts.

“It’s no secret. The university has had big financial concerns for years. It is very tight, and we took on a big obligation,” Bart Williams, chairman of Drew’s board of trustees, said Friday, after a ribbon-cutting ceremony at the new red-and-white two-story nursing building,

Discussion about creating a nursing school had gone on for many years at Drew. Even though the university knew in 2006 that it would take a financial hit from the loss of its residency programs, officials decided to forge ahead anyway with the nursing school.

“There was hope that even with reduced revenue, there would be other ways to pay for it,” Norris said.

Drew’s financial instability comes at what should be a proud moment for the institution. Drew was established in the South Los Angeles area after the 1965 Watts riots, and the opening of a nursing school meets the institution’s longtime mission of educating healthcare professionals to serve in areas lacking medical care.

A walk inside shows the promise of the 62,000-square-foot building that houses the Mervyn M. Dymally School of Nursing.

The academic area is centered at a nursing station equipped with screens monitoring beds of fake patients. Branching out from it are a birthing room, an operating room, intensive-care units for adults and babies, and three patient wards filled with four beds each that double as classrooms.

Each bed is equipped with a mannequin patient, ranging in age from infant to elderly. Some are hooked up to heart monitors; others have breathing tubes in their mouths.

Eventually, the mannequins will be set up to breathe and can even be set up to talk. One mannequin is ready to simulate giving birth.

The incoming dean, Gloria McNeal, said the set-up will allow a group of nursing students to practice running a ward on their own. Instructors can push buttons on computers to trigger a mannequin patient’s heart attack, and see how the students react.

If a student gives a patient the wrong medication, the mannequin’s monitors will show the patient’s decline and possible death.

“Here,” McNeal said, “you get to make mistakes and no one is harmed.”

Nursing school students at Drew will get master’s of science degrees in nursing, a higher level than a regular associate’s or bachelor’s nursing degree, putting them on track to become clinical nurse leaders, managers or public health experts. Students must already have a bachelor’s degree to enroll.

The inaugural class begins Aug. 23 with about 40 students, McNeal said, and eventually 120 students will be enrolled.

There is still much to fix at Drew.

Its previous president, Susan Kelly, who ended a tumultuous three-year term in 2009, presided over unstable finances and was disliked by many professors for her top-down management style.

Shortly before she left, the campus turmoil was noticed during a visit by an accrediting body, the Western Assn. of Schools and Colleges, which put Drew on a two-year probation, Norris said.

Norris said the immediate problem is figuring out a way to restructure debt payments.

The problem is not the loan itself, which Drew can afford to pay, Norris said. But because Drew’s creditworthiness is low, the university must make additional payments to financial institutions that are acting as insurers for the bonds sold by the state to raise money for construction.

Out of every $10 Drew pays, $1 goes to pay back California for the loan used to build the facility, and $9 goes to the financial institutions that insure the state in case Drew defaults on the loan.

Norris said the university is seeking donors or a partner who can help renegotiate the debt payment plan. One possible source of funds, he said, is the naming opportunity for the new nursing building.

Despite perilous finances, Norris expressed hope for the future and excitement at opening a nursing school.

“California [has] many pockets of rural and urban underserved communities. And being able to play a major role in graduating health professionals … dedicated to serve in those communities is important,” Norris said. “It is our mission.”

ron.lin@latimes.com