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Originally published Saturday, June 21, 2014 at 8:01 PM

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Starbucks tuition deal clarified

Fine print reveals details of Starbucks’ tuition offer; developer Martin Selig thinks the viaduct should be turned into a park; dueling commencement talks by Gates and Ballmer.


Seattle Times business staff

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Starbucks garnered plenty of accolades last Sunday when it unveiled a generous plan to subsidize its staffers’ college education in a partnership with Arizona State University, no strings attached.

But it was stingy with the fine print — leading to criticism and confusion as new details emerged to show that the coffee giant is bearing far less of the financial weight of the program than the initial public-relations barrage revealed.

Starbucks and ASU originally said the Seattle company’s employees would be fully reimbursed for their tuition in the last two years of college at ASU’s online program, and that freshmen and sophomores would have access to a partial tuition scholarship and financial aid. What they didn’t specify is that the partial scholarship is being funded by the Phoenix-based university, as revealed by ASU President Michael Crow to The Chronicle of Higher Education last week.

On Thursday, a Starbucks spokesman confirmed that the ASU-funded scholarship would amount to about a fifth of two-year-tuition costs that can amount to $30,000.

ASU is also ponying up significant cash for juniors and seniors, those who Starbucks said would get a full ride to finish college.

Crow told the Chronicle that for every 1,000 of those attending the program, ASU’s part of the bill would amount to $24 million and Starbucks’ would be about $11 million, and that about $7 million would be funded by Pell Grants.

Starbucks spokesman Jim Olson said that the university would cover 42 percent of the students’ tuition, and Starbucks would foot the remainder. If there’s no other financial aid, Starbucks would be on the hook for 58 percent of the bill, or $17,400. But many low-income students are eligible for help from Uncle Sam, so it’s likely that Starbucks will end up paying less.

The numbers put forth by Crow say a few interesting things. One is that federal aid plays a significant role in the deal. Secondly, ASU is devoting significant resources to the program, which promises to attract thousands of students to its online venture, raise its profile, and perhaps be a jumping point for similar partnerships with other companies.

Lastly, even if Starbucks isn’t footing the entire bill, it is opening its wallet.

If Crow’s numbers are correct, and say, 10 percent of Starbucks’ 135,000 U.S. baristas were to enroll in the program for the last two years of college, it would amount to a $297 million annual expense. That’s more than the $230 million employees got from stock awards in 2013, according to the company’s annual report.

Olson said that Starbucks’ investment may reach “tens of millions of dollars per year,” depending on the number of participate. He said many employees have shown interest.

Rachel Fishman, an education-policy analyst at the New America Foundation, last week criticized the program over the “many strings attached,” including having to complete 21 credits before being reimbursed. “Student employees will have to bear significant upfront costs and risk,” she wrote.

Nevertheless, she pointed out that “it’s good to see an employer get some skin in the game when it comes to ensuring an educated workforce.”

Starbucks is following a path long trod by Dick’s Drive-In, a chain of hamburger joints with six locations in the Seattle area.

Dick’s offers up to $22,000 in college funds to staffers working 20 hours per week while attending school.

The funds are allotted as follows: $3,000 a year for the first two years of college (which comes close to covering community-college costs) and $8,000 per year for junior and senior students.

And instead of reimbursing the employees for their out-of-pocket tuition expenses, the company directly cuts a check to their colleges.

Dick’s spokeswoman Jasmine Donovan says the company has distributed $1.3 million in scholarships in the last 20 years.

Some 80 percent of the 200 or so current employees have either graduated through the program or are presently using it, Donovan says.

Employees are eligible after six months; so are recent high-school graduates who work full time for two months during the summer.

Like with the Starbucks program, there’s no requirement to stay after attaining that shiny college degree.

“We love it when employees come, work for us, get an education and then they pursue what they’re passionate about,” says Donovan. “If they stay with us and move into management, great.”

There are even less strings attached to Dick’s program compared to Starbucks. Dick’s employees can choose any school.

And, if employees don’t use up all their funds for tuition, they can use the remainder for child-care assistance, the company says, to the tune of $3,000 to $8,000 per year.

— Angel Gonzalez: agonzalez@seattletimes.com

Selig sees future for the viaduct

Seattle developer Martin Selig has a knack for timing.

At a public forum last week on the future of the waterfront, Selig told a crowd of developers, brokers and other real-estate professionals that Seattle’s Alaskan Way Viaduct shouldn’t be torn down — it should be turned into an elevated park, perhaps with walkways connecting to future apartments.

“And I have no property down there,” he said. The audience chuckled.

But the developer of many marquee Seattle office towers wasn’t joking about the idea of patterning the viaduct after New York’s High Line, a milelong park built on a former freight rail line on Manhattan’s West Side.

Opened in phases starting in 2009, the High Line draws more than 4 million visitors annually. The park has spurred real-estate development around it and copycats in other cities.

“It’s just a fabulous opportunity Seattle has,” Selig said in an interview. “Can you imagine promenading through there? And there’s your view. If you get down to street level, you don’t get that panorama.”

Selig has thrown his support behind site planner Kate Martin, director of Park My Viaduct, a group working to produce a feasibility report in the next six weeks. The group envisions the elevated park as complementing the city’s waterfront plans.

In a city like Seattle where views are treasured, supporters of retrofitting the nearly mile-long structure and turning it into a park say they’re confident funds could be raised.

“That thing delivers 5 acres of park with a spectacular view that’s priceless,” Martin said. “There’s no way we’ll ever have that again. It’s nothing we should squander.”

After the tunnel is completed — the latest estimate is November 2016 — the viaduct is slated to be torn down before it falls down during an earthquake and the Battery Street tunnel will be decommissioned, according to the state Department of Transportation, which owns the structure.

— Sanjay Bhatt: sbhatt@seattletimes.com

Ballmer vs. Gates at grad events

It was dueling commencement speech time last weekend for former Microsoft CEOs as Steve Ballmer addressed graduates of the University of Washington, and Bill Gates — and his wife, Melinda Gates — spoke at Stanford University.

In his address at the UW June 14, Ballmer only briefly mentioned his retirement earlier this year, after 14 years, as CEO of Microsoft, and his winning bid for the Los Angeles Clippers basketball team.

“I am 58 years old and I, too, don’t know what I’m doing again,” Ballmer said with a laugh, adding that one of his opportunities “may be down in Los Angeles” and involve his passion for sports.

Ballmer told the crowd of about 5,300 students and 40,000 family members that this year’s class was “graduating at perhaps the best time in history. You have the greatest opportunities in front of you of any class ever.”

He urged graduates to seize the day, to have a point of view, and to “be hard-core” — tenacious, hardworking and thinking of the long term.

The Gateses, in their address at Stanford last Sunday, spoke of optimism and empathy.

They talked of the importance of optimism, not as false hope or a passive belief that things will get better, but born of a willingness to see suffering and a conviction that people can make things better.

“Optimism can fuel innovation and lead to new tools to eliminate suffering. But if you never really see the people who are suffering, your optimism can’t help them. You will never change their world,” Bill Gates said, according to the transcript posted at Stanford’s website. “If our optimism doesn’t address the problems that affect so many of our fellow human beings, then our optimism needs more empathy.”

Melinda Gates concluded with an appeal to the graduates: “As you leave Stanford, take your genius and your optimism and your empathy and go change the world in ways that will make millions of others optimistic as well. You don’t have to rush. You have careers to launch, debts to pay, spouses to meet and marry. That’s enough for now.

“But in the course of your lives, without any plan on your part, you’ll come to see suffering that will break your heart,” she continued. “When it happens, and it will, don’t turn away from it; turn toward it. That is the moment when change is born.”

— Janet I. Tu jtu@seattletimes.com



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