Agganis pulls $1m gift offer to Salem State on building name

Saying his alma mater deceived him when it named a former factory building after him, Ipswich businessman Michael J. Agganis has withdrawn a $1 million gift offer to Salem State College and demanded the school return a separate $500,000 donation he made eight years ago to its business school.

Agganis says the college reneged on a 1996 agreement when it placed his name on the side of the former GTE factory building instead of on the adjacent business school building. Even his recent offer to add $1 million to his initial $500,000 donation didn't sway college officials to move the name, leading to an increasingly bitter dispute between Salem State and one of its richest alumni and its largest donor ever.

With the college refusing to take his $1 million inducement, Agganis said he now wants the return of his earlier $500,000 donation -- the largest ever to the school. He said he will use the funds and the money representing the rejected $1 million offer to give to another educational cause or to the Boston Foundation.

Agganis's offer would have added significantly to the college's $6.2 million endowment.

He blames Salem's president, Nancy D. Harrington, saying she blindsided him by attaching his name to a building that houses start-up businesses, on the former GTE factory site on Loring Avenue. An agreement creating the Agganis Fund eight years ago states that a separate building that houses the business school would bear his name. The college offered to put his name on a building when he agreed to double his original $250,000 donation.

''I am greatly disappointed in the actions of Salem State College and its administration in how they deceived me, and more importantly they deceived the students," Agganis said. He said he does not care anymore about the naming rights of the building. ''I never asked for my name to be on the building. They came up with the idea. . . . All I want to do is help the kids."

College officials said they cannot respond directly to the allegations. ''We are in discussion about his gift and we pledged confidentiality," Harrington said.

She denied there was any wrongdoing involved. ''I don't think there is a right or wrong side of this," Harrington said. ''Mr. Agganis hasn't done anything improper nor has the college done anything improper."

Agganis is the nephew of the late Boston University athletic star Harry Agganis, for whom BU's Agganis Arena is named.

Salem State College's foundation has decided to return Agganis's $500,000 donation, and the college's board concurred in January, if the money can be returned legally. Both sides are locked in bitter negotiations over Agganis's demands and control of the money. He said he has agreed to put the money into a special charitable fund to aid Massachusetts college students.

On Beacon Hill, state Senator Steven C. Panagiotakos, a Lowell Democrat and vice chairman of the Committee on Higher Education, expressed concern that Salem State is ''sending a bad message publicly" at a time when public higher education institutions are trying to build up endowments.

''The hope of reconciliation is dim," he said. ''Here you are dealing with your top donor, and that person should feel that the college is appreciating him and is doing everything in its power to keep that person on board."

Agganis, a 1966 graduate of Salem State, said he is baffled by what he sees as the personal nature of the dispute. ''I never even had an argument or have been disrespectful of Nancy since I met her," he said. ''The president is acting in a dysfunctional manner because of her dislike of me. She has made it a personality conflict. I just want the money back so I can give it to some college kids."

Harrington denied that her decisions were based on any ill will toward Agganis and praised him as a benefactor who has a ''sincere interest" in Salem State.

''It is definitely not personal," she said. ''I can't run an organization of this size and make a decision based on personal issues."

Agganis said that if the current college administration changes, he will again donate to Salem State. He estimated that the college stands to lose up to $1.6 million, which includes $100,000 in state matching funds that have to be returned. The college will also lose the revenue from his endowment to aid students, which he said will amount to an estimated $600,000 over the next 10 years and $1.5 million over 20 years.

Internal college documents that Agganis provided to defend his position indicate that Salem State officials intended to recognize his initial gift by naming the main building housing the business school.

''. . . Recognition for the gift would include naming the future location of the School of Business and Economics (GTE site, Building #1) after Mr. Agganis," reads a July 2, 1996, memo from a college vice president to the business school dean preparing the terms of the donation. The final agreement signed six months later by Agganis and Harrington is less clear but seems to state the same intent: ''. . . one of the buildings at the GTE site which will house the Salem State College School of Business and Economics shall permanently bear the name of the donor."

At a September 2000 ceremony, the college dedicated the Michael J. Agganis Enterprise Center, a former factory building -- also known as Building #3 -- on the GTE property that the college had recently purchased. Agganis attended and said he was under the impression that it was the future main headquarters for the business school. He said he was never told otherwise and would not have agreed to it if he had known it was not the business school.

The Enterprise Center is adjacent to the business school but not part of it. The center, which is owned and operated by a nonprofit organization that the college controls, is used to house and nurture start-up companies and entrepreneurs. ''I don't want my name on a building that is housing private companies," Agganis said.

He said he did not discover the situation until last April. Agganis said that he offered last October to make a $1 million bequest -- $750,000 in cash over 10 years and $250,000 from his estate -- and that the college never responded, prompting him to withdraw the offer and demand the return of the 1996 donation.