The University of Colorado (CU) could not salvage a relationship with a Florida donor who reneged on a $95.7 million, 30-year promise to its dental school, forcing a $30,000 tuition increase for students in the orthodontic program.
CU officials said Monday they have terminated their contract with Gasper Lazzara, who also backed out of multimillion-dollar pledges to two other universities.
Lazzara was covering students’ tuition and paying them $35,000 annual stipends. In exchange, they promised to work for him for 7 years after graduation in a national chain of orthodontics clinics.
Ten students in CU’s orthodontics residency program sued Lazzara for breach of contract in October, claiming he promised them jobs that paid $150,000 per year, plus profit-sharing and new clinics in the community of their choice.
The deal began to fall apart shortly after the students started the program in August 2004. Stipend payments were 3 months late, forcing the students to get emergency loans and charge up their credit cards, according to their lawsuit.
Lazzara’s Orthodontic Education Company later reduced their income projections and told students they might not get new clinics, the lawsuit says.
Lazzara sued students at Jacksonville University in Florida for breach of contract, and some have countersued.
The University of Nevada, Las Vegas also has terminated its contract with Lazzara, who had pledged up to $40 million.
Lazzara also blamed a negative culture at CU that clashed with his plan to change orthodontics from individual clinics to a brand-name chain similar to Pearle Vision eye clinics.
University leaders were quick to point out that Lazzara’s $3 million gift to build the dental school is the largest in school history and that he gave an additional $3.8 million to the program and its students.
Negotiations between Lazzara and CU have been ongoing since May, when he said he could not make his payment.
Lazzara informed CU in a June letter that the entire second-year class had backed out of agreements with his company and demanded the university repay him $5.5 million for his past contributions.
In August, Lazzara offered to give CU $25,000 per month for 1 year and sponsor eight residency slots instead of the 12 per year in his original contract.
Dental school dean Denise Kassebaum rejected his proposal, saying the university needed a substantial contribution to pay off its new building and support students until tuition was raised.
Tuition will stay at $10,683 for current students because of CU president Hank Brown’s decision to allocate $1 million to the dental school. New students will pay about $40,000, which is comparable to other orthodontic programs.
[www.denverpost.com, November 6, 2006]