A Scottish university is renting out its New York campus for pop up events to raise much-needed cash.
Glasgow Caledonian University has spent £9.6m on an American offshoot that has struggled to generate revenue.
Three years after opening, GCU New York is still unable to enrol any degree students because it does not yet have a licence.
A union convener said the campus should be closed. But university management insisted it will eventually pay off.
At the moment, Glasgow Caledonian University has financial problems.
BBC Scotland has learned that it has recorded a deficit of almost £2.7m for the 2015/16 financial year – the first time it has gone into the red for at least nine years.
This figure is expected to be confirmed when the university publishes its annual financial statement.
It is understood that it will blame a drop in the number of international students because of “toughened changes to the student visa regime”.
In the document, GCU’s principal and vice-chancellor, Prof Pamela Gillies, is expected to describe “a downturn in the attractiveness of the UK as a destination for international students”.
But union officials at GCU argued this explanation ignored the millions of pounds spent on the loss-making New York campus.
Without that burden, they believed the university would still have an overall surplus.
‘No public money’
Union convener at GCU, Dr Nick McKerrell said: “I’d like university management to hold their hands up and say ‘look we made a mistake, this was not a venture that was going to succeed.'”
GCU New York is funded by a loan from the main university of which £5.6m had been drawn down by the end of the 2014-15 financial year.
That figure rose by almost £4m to £9.6m over 2015-16.
The university has always said the project is entirely funded from its own resources and not from public money.
Professor James Miller, deputy vice-chancellor of GCU, told the BBC’s Good Morning Scotland programme that the university had enjoyed a healthy balance sheet since 2007.
He said: “Over the past nine years Glasgow Caledonian University has made surpluses and that has allowed us to make the investments that we make, not just in our transnational and international ventures but also in relation to the investments that we make here in Glasgow.
“And the £9.6m that was identified for New York is dwarfed entirely by the £32m that we have recently spent in the heart of Glasgow campus, that we’ve undertaken and completed, so it is a little simplistic to suggest that because we are investing money in New York that we wouldn’t have run this deficit this year.”
Prof Miller insisted that the New York campus would turn out to be a productive investment but acknowledged delays in admitting students had been frustrating.
He added: “Of course we are slightly frustrated at the fact that we don’t have our licence yet. That sits with the New York State Education Department.
“We are the first university to have gone through this process so that’s why it’s probably taking longer than we were initially led to believe was the case. But we continue to work with the NYSED.”
In the meantime, the campus in lower Manhattan is being hired out as a venue to generate some income.
Last weekend it was used by the model Julia Restoin-Roitfeld for what was publicised as a Le Marche Bleu holiday pop-up shop.
It appears to have been designed to promote a French vodka brand.
University flags and logos were removed for the occasion.
Union convener Dr McKerrell said: “We are not a pop-up shop, we are a university of higher education. We shouldn’t be selling foie gras, caviar and Champagne to the wealthy of Manhattan.
“We are a higher education institution. To do such a thing demeans us academically, and I think we need to look at why we have not got the licence and how we can get out of this without losing more money for staff at Glasgow.”
The venue’s website suggests it has previously been used by Nike and Banana Republic and for an art exhibition.
GCU New York has also generated some money by offering short non-degree courses to businesses.
The university sees internationalisation as a key to its future success.
The New York State Education Department said “no decision has been made” on Glasgow Caledonian’s application for degree-awarding authority.
If such a licence is granted, the university is expected to offer specialist courses in fashion and risk management.