Girard Estate pays down debt, boosts cash

Girard Estate, the city-controlled charity that operates the free, residential, K-12 Girard College on Girard Ave. in North Philadelphia, has paid off $47.5 million in debt, including both its 1998 bonds, and its 6.78% mortgage loan from JPMorgan Chase & Co. on the Aramark tower.

The money was paid with income from real estate rents, hard-coal sales, and other Girard assets, plus a new $20 million, 3.95% loan from SunLife of Canada, Joseph Martz, executive director of the Board of City Trusts, told me. The board oversees the legacy estate of immigrant Philadelphia trader-financier-industrialist Stephen Girard, along with Wills Eye Hospital and other city charitable assets.

The Girard refinancing, noted by Moody's Investors Service as it withdrew the bonds' former A3 credit rating, frees $750,000 in yearly cash that was formerly paid Wall Street bankers and bondholders, Martz said. 

(Girard had planned a new, cheaper bond financing two years ago, but that was derailed, first by volatile markets, then by a lawsuit by Cumberland County, Pa., challenging Girard's tax-free status, based on a position the school's lawyers had taken in a 1950s desegregation case but later repudiated. That case is awaiting a decision by the PA Supreme Court.)

The extra money won't go into hiring back staff laid off during recent budget cuts, restoring weekend residential programs, or adding students at Girard School, which, under new headmaster Clarence D. "Clay" Armbrister, plans to admit 24 first-graders this fall. Total enrollment is 430, down sharply from the mid-2000s.

The estate spends close to $20 million a year running the school programs, and almost as much on building maintenance at the school and Girard investment properties.

Martz says plans to restore enrollment are on hold while consultants review capital improvement and maintenance needs and prepare a "strategic review" of education programs. He said the school expects to make the review public after talking with its constituent groups this winter.