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$7.5M Ligonier estate owned by former EDMC exec to be auctioned with no reserve

Deb Erdley
| Friday, Jan. 4, 2019, 1:51 p.m.

The man who spent four decades assembling one of the nation’s largest for-profit higher education systems from a single art school in Pittsburgh before it was sold for billions of dollars is auctioning off his Ligonier country estate .

The rolling 198-acre compound belonging to Robert Knutson and his wife, Miryam, is in the midst of the region’s fox hunt country. It includes 9,300 square feet of living space in the sandstone manse, a property described as ideal for “large family gatherings or charity balls.”

The estate — which includes a five-bedroom guest house, shooting range, heated dog kennels, stocked fishing ponds and a variety of other amenities — will go on the auction block Jan. 10 in Chicago. Platinum Luxury Auctions, which is overseeing the sale, said there is no minimum reserve price on the property, which was previously listed for $7.5 million.

The property, along the Ligonier-Cook Township line, is among four homes the Knutsons maintained at luxury enclaves across the country. Woodmere and another estate in Boca Grande, Fla. , will go up for auction Thursday, while the couple’s homes in Durango, Colo. , and Santa Fe, N.M. , are scheduled to be auctioned Jan. 12.

All four properties had been marketed for a combined $46 million, according to the auction company.

Knutson said he and his wife decided to consolidate their holdings in the spring when he faced health issues, stemming from a mystery infection he suffered a year and a half ago. In April, the Knutsons bought a $25 million retirement home in Los Angeles. Knutson said the climate and the home’s proximity to Cedars Sinai Medical Center, where he receives treatment, were considerations in the move.

While all of their homes are beautiful, Knutson said 160 Woodmere Drive — the sprawling Ligonier property the couple called home for more than three decades — holds a special place in his heart.

“It was a very emotional thing to be leaving Western Pennsylvania. When I think of all the things my wife and children and grandchildren enjoyed at wonderful Woodmere, the walking trails, the fish ponds — it was just very special,” said Knutson, who describes himself as an avid outdoorsman.

During nearly five decades, he became immersed in the region, serving on the board of the Western Pennsylvania Conservancy and Pittsburgh’s public television station WQED and hosting fox hunts on his mountain estate.

“I know a lot about Western Pennsylvania. I have great respect for the people,” Knutson said.

Robert McDowell, chief of the Darlington Volunteer Fire Department which serves the wealthy estates on the ridge, didn’t know Knutson personally but said his department benefited from his support.

“Mr. Knutson always supported the fire companies and was very generous with donations,” McDowell said.

Rise, fall of EDMC

Knutson, 84, came to Pittsburgh in 1969 when the Education Management Corp., later known as EDMC, took over the venerable Art Institute of Pittsburgh, a small school founded in 1921.

Knutson was named president of EDMC in 1971 and, using the Pittsburgh school as a jumping-off point, began building a national name in for-profit higher education, a market that few previously realized existed.

His wife joined EDMC in 1983. Together, they quietly built EDMC a reputation as one of the more student-oriented players in the growing for-profit higher education sector.

“We had great technology, terrific faculty and great outcomes for our students. There are so many success stories — great photography, industrial design and fashion. It was a great story,” Knutson said.

In 1996, Knutson took the company public.

A decade later, the chain that included the Art Institutes, Brown Mackie College, Argosy University and South University enrolled nearly 80,000 students at sites scattered across the country.

In 2006, Goldman Sachs engineered a $3.4 billion buyout for a group of private investors. And the Knutsons, who boast a blended family of six children and nine grandchildren — it was a second marriage for both, he explained — retired comfortably. He stepped down as chairman and chief executive officer of EDMC, making $132.4 million in stock sales from the company, according to Bloomberg .

He told the Tribune-Review that he is heartbroken at the events that have transpired since then.

At its peak in 2011, EDMC enrolled 160,000 students at brick-and-mortar locations and a variety of online programs. But by then it was fighting a federal whistleblower lawsuit that alleged its growth was fueled by fraudulent recruiting practices, exaggerated job placement claims and loading students with pricey private loans.

Creditors assumed control of the company in 2015 in exchange for erasing $1.3 billion in debt and agreeing to pay more than $95 million to settle the federal lawsuit and another $103 million to settle claims with multiple state attorneys general.

Last year, after selling its remaining schools to a California-based nonprofit group, EDMC filed for Chapter 7 bankruptcy.

“When they acquired (EDMC), they promised all kinds of things,” Knutson said. “They were good at marketing, but they didn’t come through. … They hurt a lot of people. It tears me apart. … It was a great company with wonderful prospects.”

There is no minimum reserve on the Ligonier estate, but those who wish to bid must post a $100,000 refundable deposit and register with Platinum Luxury Auctions no later than 5 p.m., central time, on Jan. 9. Terms of the auction permit remote bidding and stipulate that the property will go to the highest bidder without reserve (a.k.a. “absolute”) and regardless of the high bid price.

Deb Erdley is a Tribune-Review staff writer. You can contact Deb at 724-850-1209, derdley@tribweb.com or via Twitter @deberdley_trib.

The 9,300-square-foot Ligonier country estate on 198 acres belonging to Robert Knutson, founder of EDMC, goes up for auction on Jan. 10. The property previously had been listed at $7.5 million.
Submitted
The 9,300-square-foot Ligonier country estate on 198 acres belonging to Robert Knutson, founder of EDMC, goes up for auction on Jan. 10. The property previously had been listed at $7.5 million.
The 9,300-square-foot Ligonier country estate on 198 acres belonging to Robert Knutson, founder of EDMC, goes up for auction on Jan. 10. The property previously had been listed at $7.5 million.
Submitted | ED ADAMS PHOTO
The 9,300-square-foot Ligonier country estate on 198 acres belonging to Robert Knutson, founder of EDMC, goes up for auction on Jan. 10. The property previously had been listed at $7.5 million.
The 9,300-square-foot Ligonier country estate on 198 acres belonging to Robert Knutson, founder of EDMC, goes up for auction on Jan. 10. The property previously had been listed at $7.5 million.
Submitted
The 9,300-square-foot Ligonier country estate on 198 acres belonging to Robert Knutson, founder of EDMC, goes up for auction on Jan. 10. The property previously had been listed at $7.5 million.
The 9,300-square-foot Ligonier country estate on 198 acres belonging to Robert Knutson, founder of EDMC, goes up for auction on Jan. 10. The property previously had been listed at $7.5 million.
Submitted
The 9,300-square-foot Ligonier country estate on 198 acres belonging to Robert Knutson, founder of EDMC, goes up for auction on Jan. 10. The property previously had been listed at $7.5 million.
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