NEWTON - Eighteen months after the startling news that Hebrew College planned to sell its celebrated campus to retire $32.1 million in mortgage debt, its leaders say the school has regained its financial footing and will now stay put.
Rabbi Daniel L. Lehmann, the president of Hebrew College, said the school is in the final phase of renegotiating its loan in a complex deal that will reduce the institution’s debt to $7.4 million.
The school also has chopped its operating budget nearly in half over the past four years. But by focusing almost exclusively on administrative cuts, Lehmann said, its academic programs have survived almost intact.
The deal means Hebrew College can keep its building - a modern, light-drenched structure designed by renowned Israeli architect Moshe Safdie - and focus on improving its blend of youth, community, and graduate education offerings.
“It means a new lease on life,’’ said Lehmann, who plans a formal announcement of the newfound stability at the school’s 90th anniversary gala Wednesday evening. “Here is an institution which is the only institution of its kind in New England.’’
Hebrew College is Boston’s largest and most comprehensive institution for community Jewish education and home to the area’s only rabbinical school. It was founded in Roxbury and moved to Brookline before settling in Newton Centre in 2001.
The school educates about 600 in its community programs, which allow adults to learn about Judaism. More than 500 students are enrolled in its after-school and weekend programs for middle- and high-schoolers, and about 250 graduate students study at the college, including about 50 in the rabbinical school.
Jonathan Sarna, a professor of American Jewish history at Brandeis University and an alumnus and donor, said a forced sale “would have been a symbol of failure for the Boston Jewish community, one which I was quite uncomfortable with.
“The fact that it will remain is, I think, a symbol that the community remains committed to high-level Jewish education, and to a sense that Jewish education can occur in this kind of impressive location and building that had been specially built for it,’’ he said.
But Lehmann said the college, like many other institutions, has learned a painful lesson about tempering ambition with budgetary realism.
“It has to be very, very careful and responsible and sustainable,’’ said Lehmann, who replaced the school’s previous leader, David Gordis, just months before the 2008 economic meltdown. “Part of our problem is we got ahead of ourselves. There is a natural desire for growth, but it has to be growth you can afford.’’
Lehmann said when the college went on the market early last year, the building drew only limited interest in a deflated real estate market. At the price the building was likely to fetch, he said, Hebrew College’s leaders felt they could try to jump in and refinance. The bond insurer agreed to work with the college on a plan.
The deal, which is likely to close within days, required some sacrifice all around, Lehmann said. The bond insurer lost some money; Hebrew College agreed to raise $3 million in equity; and Combined Jewish Philanthropies, a major supporter of Hebrew College and the guarantor of its original mortgage loan, must pay $5.2 million of the debt in the coming years.
But Barry Shrage, president of Combined Jewish Philanthropies, which continues to contribute $1.5 million to the college each year to support its educational mission, said Hebrew College has agreed to try to pay his organization back over time.
Shrage described the college’s current leadership as “terrifically on the ball.’’
The institution’s recovered financial stability, he said, will allow it to refocus its energies on programs like Prozdor, the widely respected supplemental school for Jewish teens, which recently received an injection of youthful new leadership, and Me’ah, an adult education program that Shrage described as “the best shot any community ever had at universal adult Jewish literacy.’’
“I believe this will put us back on target for significant new expansion in those areas,’’ Shrage said.
The college has recently created two new programs on parenting “through a Jewish lens’’ and another for young adults.
When facing the prospect of homelessness, Hebrew College had arranged to lease space from neighboring Andover Newton Theological School.
The Rev. Nick Carter, president of Andover Newton, said the change of plans was welcome news. The two institutions work closely on interfaith efforts, such as developing a new certificate program in interfaith leadership.
“In terms of things that are going to make Hebrew College strong and actually support our exploration into interreligious leadership education, it’s far more important that they have a permanent home,’’ he said.
David Micley is the third generation of his family to work at Hebrew College; his grandparents met there, and his mother trains teachers in the Prozdor program for teens, where Micley is now director of recruitment and admissions.
“I know for a lot of people who work here, it felt like a ghost hanging over everybody’s head,’’ he said of the onetime threat of having to move. “To have that not be a concern and to focus on programming . . . is definitely invigorating.’’