JPR's Kramer challenges audit

Jefferson Public Radio's embattled executive director disputes an audit's findings that the JPR Foundation's Medford projects pose a $7 million liability risk for Southern Oregon University.

"We did not take out debt of that type," Ron Kramer said. "The foundation has taken a pay-as-you-go stance."

Kramer is executive director of both the radio stations, which are owned by SOU, and the foundation, which is JPR's independent fundraising arm.

SOU gave Kramer a 90-day termination notice Friday in frustration over the inability to resolve issues raised in an audit that urged more separation between JPR's radio stations and the foundation.

To refute the questions raised by the Oregon University System audit, Kramer provided a breakdown of how much money the JPR Foundation has invested so far in downtown Medford buildings, including the Holly Theatre and a warehouse that would serve as JPR's new headquarters.

"The audit letter wrongly set up a scenario where these projects were financially insupportable," Kramer said.

SOU spokesman Jim Beaver said the JPR Foundation is taking on two projects in Medford costing $7 million that could leave the university exposed to considerable debt. Also, he said it would require donations by the local community.

"How many student scholarships would that mean?" Beaver questioned.

In the 2010-11 fiscal year, the SOU Foundation raised $2.6 million, and in the first eight months of this fiscal year, it raised $2.1 million, with more donations expected soon.

Beaver said questions also were raised when the JPR Foundation spent $5.5 million renovating the Cascade Theatre in Redding, Calif. The Cascade is owned by the Oregon University System, which ultimately approved the project.

Beaver said the JPR Foundation's increased assets weren't as much of a problem during its initial growth and expansion phase, but they raised a red flag with auditors after the purchase of the Holly.

"When the risk level went up to 'high,' that's when the issue needed to be dealt with," he said.

On Tuesday, SOU President Mary Cullinan, who is out of town, expressed in a statement released to the media her hope that a third-party mediator could resolve the differences raised in the university audit. The JPR Foundation board voted Thursday to enter into mediations with SOU.

Kramer said most of the donations for the Holly Theatre would come in the way of grants, tax credits and other programs that wouldn't directly conflict with SOU fundraising activities.

He said that up to $2 million in direct donations would have to be raised over several years out of the $7 million it would take to complete the Holly restoration and new headquarters. But Kramer said the donor base would include a much broader region than the SOU Foundation.

Kramer said any work on the buildings will proceed only when funds become available.

An abandoned building on 10th Street was donated to the foundation from Bruce Larson, owner of Larson's Home Furnishings.

The foundation also entered into a separate agreement to purchase another building at 315 Front St. from Larson for $350,000 last November.

Kramer said the purchase of this building wasn't previously announced because the foundation wanted the public's focus to remain on the remodeling of the Holly's exterior.

The JPR Foundation is paying Larson a $17,500-a-year, interest-only loan for the building and a parking area. Kramer said the foundation previously had five storage areas that it leased throughout the county that have now been consolidated in the one building. He said the interest payments have been offset by no longer paying for the storage units.

The $350,000 note on the building becomes due after three years, or the building reverts back to Larson, Kramer said.

The abandoned warehouse and parking area across the street will be renovated to create new facilities for the radio stations' headquarters, now housed in a basement of SOU in Ashland.

The warehouse project will require up to $1 million in direct donations, said Kramer, who said an anonymous donor from Roseburg has pledged $50,000 toward the project.

The Medford Urban Renewal Agency has contributed $300,000 toward the $500,000 in the Holly project that will involve remodeling the facade and making the building structurally sound.

The JPR Foundation purchased the Holly Theatre for $500,000, requiring mortgage payments of $3,600 a month. About a third of the monthly payments are collected in rent, he said.

Kramer said the Holly will require about $800,000 in cash donations, with the remainder from tax credits and grants.

The Medford projects are entirely owned by the JPR Foundation.

The foundation owns $4 million in assets that are meshed into the operations of the radio stations, according to the university audit.

SOU's assets in the radio stations amount to $5.4 million, according to the audit.

Beaver said the mediation effort will attempt to sort out the assets of the university and the foundation.

"It is so intermingled — it needs to be figured out," he said.

Reach reporter Damian Mann at 541-776-4476, or email

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