A Texas lobbyist whose son was "enthralled" about the prospect of attending the College of Santa Fe next year has a proposal he says could save the financially troubled school.

According to Jeff Heckler, Inland Public Properties, based in Austin, is interested in buying the property from the state — should the New Mexico Legislature approve a state takeover of the college — and then leasing it back over a 20-25-year period.

Inland, Heckler's client, is part of a $19 billion family of real-estate investment trusts, or REITs. It specializes in designing, building and financing capital improvements, he said, particularly essential government assets such as courthouses and prisons.

The transaction would immediately wipe out the debt that the private college built up over a period of years, but could tie down the surviving institution to annual multimillion-dollar lease payments over two decades or more.

Heckler has broached the idea to a College of Santa Fe trustee, the Governor's Office, members of the Santa Fe Chamber of Commerce and to state Rep. Lucky Varela, D-Nambé, sponsor of a measure to authorize a state takeover of the campus. But nobody has embraced it thus far.

Heckler said he never heard of CSF until a college consultant recommended it to his son, a student at the McCallum Fine Arts Academy, located at McCallum High School. In late 2008, Heckler and his son, who participates in visual arts, film, music and theater, visited the campus, after a snowstorm. "I've never seen my son so thrilled about anything," he said.

Later Heckler began reading about the college's financial problems, talked to Inland's CEO and started calling around New Mexico proposing its model as a solution to the problem.

For the idea to work, New Mexico Highlands University, The University of New Mexico or another public university would have to acquire the college. Then IPP would buy the property, liquidate the debt and provide some operating capital. It could even put money into campus energy savings that would drive down operating costs, Heckler said.

Then it would lease the property back to the state over an extended period. The state would have no out-of-pocket expenses other than lease payments of $3 million to $4 million, he said, depending on the purchase price.

The state entity would continue to operate the college. "We build things. We don't run universities," Heckler said. "All we need is a public partner."

He said the deal could be done in a matter of weeks, in part because Inland has plenty of cash. He said the group raises millions a day from private equity investors. "We could (write) the check and no one has to close the school," he said.

Ultimately, the state could buy the campus back from Inland. "The economy is not going to be bad forever," Heckler said. "Maybe it could buy the whole thing back in five to 10 years."

This is not a model that fits every struggling institution, Heckler admitted. Normally, universities issue revenue bonds, which have lower borrowing costs. In fact, a financial-rescue plan by Highlands contains that feature. "Inland cannot compete with that," Heckler said.

Another REIT could also come to the rescue, Heckler pointed out, adding, "I'm getting the impression that they (the community, Legislature) are almost ready to let this beautiful college go by the wayside. That would never happen in Texas. They would throw themselves in the Red River first."

Heckler also said that Inland has no interest in developing the property. "We would own it and lease it back. Operations would continue as they are."

The virtue of his idea, he said, is that it would clear the college's debt until the economy improves. "There's a lot of creativity in this model," Heckler said. "That's all we bring, plus a lot of money."

Rep. Varela said Friday that he's focused on getting his bill through the Legislature. (It might be heard on the House floor within a matter of days.) He pointed out that Highlands already has a plan to issue bonds to pay the debt and there is $3 million in operating funds in the appropriations bill to pay expenses the first year. "At this point I haven't even thought of alternatives," he said.

Fred Cisneros, a 1987 graduate of the college and member of its board of trustees, called the proposal an "interesting opportunity," and said it would take a "daunting number off the state's books." But he said he thought the real challenge for the school was not in issuing bonds to retire the debt but in financing the school down the road.

"This is kind of a tickler out there," he said. "Nobody knows what to do with it."

Jim Fries, a former president of CSF and currently the president of Highlands, said there are two primary problems with the concept. For one thing, a public university would still have to secure approval from the Legislature to establish the campus.

A second problem, he said, is that if the university sold the property and leased it back, it would not be eligible for a portion of the state funding formula that provides for maintenance, utilities and plant operations. At Highlands, that is more than $2 million a year.

The idea is probably not financially viable, Fries said, because it would reduce revenues — from the funding formula — on one hand and increase expenditures — from the lease — on the other.

Highlands has had "significant meetings" with CSF's creditors and is "well along with the refinancing plan." If the bond ratings are adequate, he added, "My understanding is there would be a market" for selling the bonds.

Tuition and fees would be lower if the college were to become a state school, he pointed out.

Time is running out, Cisneros acknowledged. He hopes there's enough momentum to carry the Varela bill but said, "My biggest fear is that we will close for a year or a semester and then try to rebuild." Meanwhile, the college is keeping lights turned off as much as possible and trying to find the cash to carry it through May, he said. "We are at a shutdown pace," he said, "unless we can find somebody to step in with a miracle."

Contact Anne Constable at 986-3022 or aconstable@sfnewmexican.com.