From the Arts Complex to the Academic-Industrial Complex

Why PSU’s theater project and academic retrenchment are not competing stories

Leadership guru Peter Drucker is credited with observing that “management is doing things right; leadership is doing the right things.”¹

Portland State University’s several recent presidents have undertaken an institutional strategy in the face of a steady, 15-year enrollment decline that has failed to solve the problem. Each has chosen to focus on erecting building after building, even as the number of students living or learning in them shrinks.

PSU’s most recent example is its pursuit of the Portland Arts and Culture Center. President Ann Cudd is “doing things right”: she successfully secured $137.5 million in state-backed bonds for the project, which includes, in addition to the City of Portland’s planned 3,200-seat theater, a complex of learning spaces and a second, smaller, 1,200-seat campus theater.²

Cudd called the PACC project evidence of “bold leadership and creative vision.” The goal is to lift up the university’s renowned performing arts programs, capitalizing on the city’s need to replace the Keller Auditorium, in the hope of eventually boosting enrollment. Yet Cudd, like her predecessors, is simultaneously managing — not reversing — decline.²

A mere nine months after securing PACC bonding from the Oregon Legislature, Cudd announced that 19 academic departments might be reduced or eliminated, putting as many as 220 jobs at risk.³ By May 2026, the list had narrowed to nine departments, two marked for closure, and 52 faculty positions at stake, in order to cut $16 million from the budget.⁴

This is not “doing the right things.”

PSU’s current crisis plays as two competing narratives: a hopeful expansion on one hand, and a painful contraction on the other. Instead, they should be seen as two parts of the same story. This is an account of choices made in a shrinking enrollment climate: choices about building our way out at the expense of academic programs and faculty, eroding the university’s core mission.

The argument is not that theater bond money could have gone to faculty salaries. It could not. State bonds and private gifts build buildings; they do not cover payroll, and PSU has said so about every project it has raised. The argument is about whether this strategy threatens to exacerbate, rather than reverse, the enrollment crisis.

The labor case for the complex is strong, and it deserves to be stated first. A Crossroads Consulting analysis commissioned by the City of Portland found that closing the Keller Auditorium would cost the region as many as 336 jobs at peak and about $42.3 million in labor income over a two-year shutdown, among them stagehands, musicians, wardrobe workers, and food-service staff. No comparable downtown venue could host the Keller’s full slate of productions. For the building trades, the full complex, an estimated $650 million project, means years of union work. Organized labor is right to support it, and protecting those workers is the strongest argument for the project.⁵

That case is one I have made, and it stands. But it is the City of Portland’s argument, not the university’s. A public institution already cutting Philosophy, History, World Languages, and its core general education program faces a different question than the city does: whether a major performance venue belongs at the center of its strategy while its academic core contracts. A stagehand and a philosophy professor are asking different questions, and they deserve different answers.

A University in Decline

Portland State’s enrollment has fallen every year since its 2010–11 peak, and the university has lost 23 percent of its students since 2019 alone.³ Cudd did not cause the decline, but she has not taken steps to stop it either. As enrollment has fallen, the revenue supporting faculty salaries, course offerings, and student services has eroded. The university’s own enrollment model, prepared by the Office of Institutional Research and Planning in November 2023, forecast continued annual declines through 2025–26.

What is now marked for elimination is the core of the university’s mission. University Studies is the interdisciplinary general education program that every undergraduate completes; it is the common core shared by all degrees, and the provisional plan assigns it about $10.7 million in reductions and 24 potential layoffs, the largest single share of the cuts. Conflict Resolution prepares graduate students for careers in mediation and civic life. Philosophy, History, and World Languages teach the reasoning, historical perspective, and linguistic range that a public university exists to provide. Cutting these programs would narrow the institution’s purpose and reduce what it offers students.⁴

Cudd’s rationale for the complex is that expanding the university’s renowned arts and music programs could turn enrollment upward in later years. The project has been sold on that promise: to attract new partners and audiences, to link the campus to Portland’s cultural offerings, to serve the city for a century.⁷ Grant the ambition. It still describes a hoped-for future rather than addressing the fiscal crisis at hand. The chief cause of the current crisis, the enrollment decline, is ignored by the proposed complex. It is a wager on a distant recovery, placed by a manager who told her own finance committee in September 2025 that PSU faces a future “where it’s going to have to operate as a smaller institution than it has over the past decade.”⁸

When the city commissioned Hunden Partners to assess market feasibility, the January 2026 report concluded that Portland could not support two Broadway-capable venues and recommended against renovating the Keller. Cudd treated the report as validation for the project. Yet the report makes a civic case, not an academic one. It recommends a new venue at the PSU site rather than a renovated Keller, but that recommendation concerns the larger, city-owned venue, not PSU’s own 1,200-seat theater. The study does not make PSU’s academic case, and the larger venue remains unfunded and contested; even with PSU’s bonds approved, the city could still owe $200 million to $300 million whose source it has not identified. None of the report’s findings touches PSU’s operating budget, where the decisions about layoffs were made.⁶

A Decade of Building

The complex is not the first major building PSU has constructed as its enrollment has fallen, but it is the largest in a decade. As the student body contracted, the university opened or rebuilt one major facility after another. The Karl Miller Center, a $61 million renovation and addition for the School of Business, opened in 2017. A $52 million rebuild of the Peter Stott Center produced the 3,000-seat Viking Pavilion in 2018. A $70 million modernization of Neuberger Hall, since renamed Fariborz Maseeh Hall, finished in 2019. The seven-story Vanport Building opened in 2021. The Vernier Science Center reopened after a major remodel in 2024. By the PSU Foundation’s own accounting, $54 million in donor gifts helped unlock nearly $250 million in state support to build or renovate six campus facilities across those same years.⁹

None of that money came from tuition or the General Fund. State bonds and private donors paid for the buildings, which is precisely the point. Under Presidents Shoureshi, Percy, and Cudd, as enrollment kept falling, the institution’s steady answer to decline was to build. Recruitment, advising, retention, and the academic programs that draw and keep students never received a campaign of this scale. Taken together, these choices describe an institution investing first in its own physical expansion while its academic core withers.

Set the two columns side by side. Nearly $250 million in state support and $54 million in gifts for six buildings in a decade, then $137.5 million more in state bonds for the complex. Against that, a retrenchment plan proposes about $16 million in academic cuts and the elimination of two departments, one of them the program every undergraduate completes. The university found the will and the donors to build. It has not focused on a plan to recruit the students who would fill what it built. The retrenchment plan itself concedes the point: PSU, it states, is “maintaining an infrastructure built for 30,000 students while currently serving 20,000.”¹⁰

Portland State is not the first shrinking university to answer decline with construction. During the 2000s, the University of Akron borrowed heavily for an estimated $640 million building campaign on the theory that new facilities would draw new students. Enrollment fell instead, from nearly 30,000 in 2011 to some 15,000 today, leaving Akron overbuilt and indebted, selling property while cutting faculty.¹¹

The academic-industrial complex is a term scholars use to describe an institution whose first commitment is its own reproduction, concealed behind the language of neutrality, benevolence, and reform. The framework does not depend on any claim that capital dollars were taken from classrooms. It describes the locus of a university’s attention, its prestige, and its risk. Portland State has put all three into buildings while treating the programs that define it and the people who sustain them as expendable.¹²

A Choice, Not a Necessity

Other paths were available. In January 2026, the faculty union PSU-AAUP placed a detailed package of alternatives to involuntary layoffs on the table: a two-cohort retirement incentive and a retirement transition program with phased FTE reductions, both designed to generate recurring salary savings and both grounded in past practice at PSU and peer institutions. The union also argued that targeted investment in recruitment, advising, and community connection could rebuild enrollment over time. No building does that work. The administration refused this alternative even as it continued to cite the enrollment-based structural deficit to justify cutting positions.¹³ The involuntary layoffs and program eliminations moved forward.

Portland State has not disclosed the annual cost of operating the 1,200-seat theater it will own beginning in 2030. For a university already in retrenchment, that missing number is part of an academic future being cast in concrete, with no public accounting of the program cost implications that will compete with other academic offerings.

Ann Cudd raised money for the complex by promising Portland a “renewed spirit,” to be sparked by “meaningful educational and cultural experiences.” ¹⁴ Yet the programs she has marked for elimination already provide the same. A public university is defined by what it teaches, not by what it builds, and no venue can substitute for a general education program, a philosophy department, or the faculty who teach.

By substituting edifices for education, three PSU presidents have chosen to manage decline rather than lead a turnaround.

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Notes

1. The Drucker maxim. The aphorism, as commonly quoted, is attributed to Peter Drucker. His published formulation, in Management: Tasks, Responsibilities, Practices (New York: Harper & Row, 1974), p. 45, contrasts efficiency and effectiveness: “Efficiency is concerned with doing things right. Effectiveness is doing the right things.” The management/leadership phrasing is a later popularization of the same distinction.

2. Funding and the “bold leadership and creative vision” remark. Senate Bill 5505 (2025) provided $137.5 million in state bonds: $85 million for the 1,200-seat theater and academic space, and $52.5 million for parking. With $7.6 million from Prosper Portland and $10.5 million in philanthropic pledges, the total reached about $155 million. The “bold leadership and creative vision” language is from Cudd’s statement in the funding announcement. PSU news release, June 2025, pdx.edu/news; KGW, June 27, 2025, kgw.com; KOIN, July 2, 2025, koin.com.

3. Retrenchment and enrollment. The announcement that 19 departments could be reduced or eliminated and that as many as 220 faculty and staff positions were at risk (Bill Knight, PSU-AAUP), and the enrollment decline (every year since 2010; 23 percent since 2019): OPB, March 9, 2026, opb.org; KPTV, March 10, 2026, kptv.com; Axios Portland, March 9, 2026, axios.com; PSU, “2026 Institutional Reductions,” pdx.edu/president/2026-institutional-reductions. Office of Institutional Research and Planning, Portland State University, “Enrollment Forecast Annual FTE Model” (David Burgess, Director, November 1, 2023), pdx.edu/research-planning. The OIRP annual FTE series shows enrollment peaking in 2010–11 and declining every year thereafter.

4. The May Provisional Plan, University Studies, and Conflict Resolution. PSU’s Provisional Plan for Retrenchment, dated May 14, 2026, proposes eliminating two academic departments, University Studies and Conflict Resolution, and reducing seven others, for a total of about $16.1 million in budget reductions and 52 potential AAUP layoffs across the nine departments. The plan states that, for each eliminated department, “the elimination of the entire department is proposed,” and Table 1 assigns University Studies about $10.7 million in reductions and 24 potential layoffs, and Conflict Resolution $367,703 in reductions and 2 potential layoffs. Portland State University, Provisional Plan for Retrenchment, May 14, 2026, pp. 8–9; PSU Article 22 2025-2026 website, pdx.edu.

5. Labor figures. Crossroads Consulting Services, Economic Impact Analysis: Potential Temporary Closure of Keller Auditorium, City of Portland Office of Management and Finance, May 2024. The report notes that employment, labor income, value added, and output are interrelated and not additive. A one-year closure was estimated at 320 jobs and $20.5 million in labor income; the two-year closure figures are approximately 336 jobs at peak and $42.3 million in cumulative labor income. The estimated $650 million figure is for the full complex (see note 6).

6. Hunden study. The Hunden Partners market feasibility study, commissioned by the City of Portland and released January 23, 2026, found insufficient market demand for two Broadway-capable venues and recommended a single new Broadway-capable venue at the Portland State site rather than a renovated Keller, setting the ideal capacity for that venue at 3,200 seats. Its cost estimates included a full Keller renovation near $290 million, a 1,200-seat PSU venue near $115 million, the large Broadway-capable venue between $350 million and $425 million, and the full complex, including both venues, parking, hotel, and conference center, near $650 million. City officials described the findings as not the city’s ultimate proposal, and reporting noted the city could still owe $200 million to $300 million for the city-owned venue. City of Portland, “Future of Large-Scale Performing Arts” market feasibility study, portland.gov/arts; Lizzy Acker, “Portland is told it can’t sustain 2 Broadway-ready theaters,” The Oregonian/OregonLive, January 27, 2026; Willamette Week, January 23, 2026; Oregon ArtsWatch, January 27, 2026. A follow-up Hunden analysis (April 21, 2026) reaffirmed the recommendation and states that it does not account for construction costs, the cost of closing the Keller, or the ongoing operating expenses of either venue. Cudd’s “renewed spirit” and “meaningful educational and cultural experiences” language is from a PSU statement issued the day the study was released, January 2026.

7. PACC claims. “Attract new partners and audiences,” “linkages to other cultural offerings,” and “serve Portland for a century”: PSU Performing Arts Venue FAQ, pdx.edu/construction/performing-arts-venue/faq; PSU news release, June 2025.

8. The “smaller institution” remark. Cudd, “PSU is facing a future where it’s going to have to operate as a smaller institution than it has over the past decade,” board finance committee, September 2025: OPB, September 25, 2025, opb.org.

9. PSU construction during the enrollment decline. Karl Miller Center (opened 2017; about $60.7 million, two-thirds state bonds and one-third private donors, with no student funds used): PSU, “Karl Miller Center,” pdx.edu/buildings; Portland State Vanguard, November 2017. Viking Pavilion at the Peter W. Stott Center ($52 million, completed April 2018) and Fariborz Maseeh Hall, formerly Neuberger Hall ($70 million, January 2018 to August 2019): pdx.edu/buildings; pdx.edu/construction. Vanport Building (opened December 2021, a collaboration among PSU, OHSU, PCC, and the City of Portland): portland.gov, December 7, 2021. Vernier Science Center (reopened Fall 2024): pdx.edu/buildings. The six-facility figure, $54 million in donor gifts unlocking nearly $250 million in state support, is from Portland State University, “Portland State Successfully Completes Landmark Campaign,” pdx.edu/news, October 2021.

10. Infrastructure concession. Portland State University, Provisional Plan for Retrenchment, May 14, 2026, p. 4. In context, the plan refers to administrative structures, staffing levels, and physical plant.

11. University of Akron comparison. Akron added nearly two dozen buildings during Luis Proenza’s presidency (1999–2014) through a $640 million construction program financed largely by debt. Its enrollment has since fallen from nearly 30,000 in 2011 (the university’s own figure) to approximately 15,000, about half its level 15 years earlier. The university now holds some $378 million in debt and is selling buildings and reducing faculty, and Ohio’s Auditor of State found it continues to own and maintain excessive building capacity. Crain’s Cleveland Business, March 19, 2025, and April 13, 2018; Signal Akron, May 2024; Ohio Auditor of State, University of Akron Performance Audit, ohioauditor.gov.

12. Academic-industrial complex framework. Andrea Smith, “Social-Justice Activism in the Academic Industrial Complex,” Journal of Feminist Studies in Religion 23, no. 2 (Fall 2007): 140–145.

13. Phased retirement and alternative package. PSU-AAUP, “Retirement and FTE Proposals: Real Alternatives to Layoffs,” January 26, 2026, psuaaup.net. The package included a two-cohort Retirement Incentive Offer (retirements effective July 1, 2026, and July 1, 2027) and a Retirement Transition Program with a phased FTE reduction option. In that post, the union states that the administration “has been slow to engage with the full package as an alternative to widespread layoffs, even as they continue to cite the structural deficit as justification for cutting positions.” The administration did not adopt the full package as its alternative to involuntary layoffs; it advanced only a narrower, consolidated Retirement Transition Program for AY 2025–26 through AY 2027–28 (February 23, 2026), while its May 14, 2026 Provisional Plan proposed involuntary layoffs across nine departments (see note 4). PSU-AAUP, “Learn More About Our Contract,” psuaaup.net; PSU Retirement Transition Program page, pdx.edu/academic-affairs/retirement-transition-program.

14. The “renewed spirit” remark. Cudd’s “renewed spirit” and “meaningful educational and cultural experiences” language is from a PSU statement issued the day the Hunden study was released, January 2026 (see note 6).