Faced with a cash flow problem and potential foreclosure on its property, the San Francisco Art Institute is raising funds to continue operations. (James Chan/Special to S.F. Examiner)

Faced with a cash flow problem and potential foreclosure on its property, the San Francisco Art Institute is raising funds to continue operations. (James Chan/Special to S.F. Examiner)

SF Art Institute restores degree classes, seeks subtenant for Fort Mason campus

The San Francisco Art Institute will once again offer degree classes and keep tenured faculty after experiencing an existential financial crisis at the start of coronavirus, it announced Wednesday.

Running short on funds, the 149-year-old art school told students and faculty in March that degree programs would not be offered in the fall, spurring questions about its ability to stay open.

But after “very aggressively fundraising” and receiving about $2.25 million from the federal stimulus package, the Art Institute found about $6 million within two months to bring online degree classes back, said board member Pam Rorke Levy. It still must raise another $4.5 million to round out the fiscal year, which will be helped by a second $100,000 matching grant from Rorke Levy and her husband.

The college has maintained that it isn’t closing and planned to offer continuing and public education classes, including summer camps, though it’s not clear how many students they have served. How many degree classes it offers, which will be online until further notice, depends on student need.

“We will still live on,” said Rorke Levy. “We have a job to do now, which is to be able to confidently assure the students that we are going to do right by them and get them their degrees.”

Degree course offerings come shortly after Boston Private & Trust Company filed a foreclosure notice earlier this month against the art school for defaulting on its $19 million debt. Rorke Levy said the default was due not to missed payments, but to not having enough cash reserves. If the foreclosure goes through, the Art Institute stands to lose its prized campus at 800 Chestnut St.

Still, the school won’t be returning to Fort Mason, where it leased space in 2015. The expansion caused immense financial strain, and with another 55 years remaining on the lease the college is now looking for a subtenant.

When the Art Institute moved into Fort Mason, it had about 700 students. It only had 300 students enrolled in the past academic year, and that number may further dwindle.

“We don’t need two campuses if we have 300 students,” said Rorke Levy. “It might be a three-year, a five-year, or a 10-year lease. Another large nonprofit could come or an arts-related company could come in and basically buy the lease for us.”

The Art Institute’s departure from Fort Mason marks the second impending higher education vacancy at the arts-focused center. Despite great resistance from students and faculty, the City College of San Francisco board voted in May to end that school’s 40-year run at the waterfront location to help close what was then projected to be a $12.8 million deficit for the past academic year.

City College is relocating its kilns and other equipment by September, to the tune of $245,000.

Fort Mason Center is working to fill the space left by City College and SFAI. It will be a nonprofit or arts-focused entity, as required by the complex’ lease with the National Parks Service.

The Art Institute has tapped a real estate team to find a fitting subtenant in collaboration with Fort Mason.

“It’s obviously sad that they’re shutting down this grad campus but we wanna work with them to find [tenants],” said Nick Kinsey, Fort Mason director of external affairs. “I think they’re aligned with us, we’re excited to work with them.”

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