Tiny Burlington College, with 180 students and a modest academic footprint, is buying the 32.4-acre Roman Catholic Diocese of Burlington property on North Avenue.

Burlington College President Jane Sanders said Monday the college and the diocese have been in negotiations for months and have signed a purchase and sales agreement and plan to close on the property within a year.

Sanders said the expansive property overlooking Lake Champlain will become Burlington College’s new campus, just up the street from the school’s current home at the corner of North Avenue and North Street.

“We’re extremely excited about it,” Sanders said. “It will be truly transformative for the college.”

The sale of the property became necessary as the diocese moved to pay more than $17 million to settle sexual abuse lawsuits filed against it in Superior Court. Bishop Salvatore Matano, in announcing the settlement of sexual abuse cases this month, said the church had obtained an interim bank loan and was counting on the sale of the diocesan property to pay off that loan.

The diocese said Monday in a prepared statement that although it is “saddened to be leaving a site with such a rich history of service to the community and the church, it is pleased that the property will continue to serve as an educational institution, providing the benefits of education to many who might not be able to achieve such an opportunity.”

Details of the deal, including the selling price, were not disclosed.

The site includes the largest undeveloped piece of land remaining in Burlington. It is valued on the city’s grand list at $19.8 million, though Yves Bradley, vice president for commercial brokerage at Pomerleau Real Estate, said the city’s assessment does not reflect the current real estate market. The headquarters property was placed on the market last month for $12.5 million, Bradley said.

Sanders said the college intends to convert the original main building on the site, formerly an orphanage built in 1881, into public space and classrooms. The newer wing, built in the 1940s, will become the college’s administrative building. The building to the south will become student housing, she said.

“This new campus will enable us to broaden our academic offerings,” Sanders said in a news release. “We will be able to design editing suits, soundstages and studios for our popular film and photography majors. We will expand our art and music offerings. Our environmental studies, lake ecology and sustainability courses will have a living classroom. The opportunities are limitless.”

Sanders said that the diocese lands “will remain open to the public, and the college will continue the stewardship of this beautiful property.”

Sanders did not reveal details of the arrangement with the diocese, the cost of the purchase or the source of the college’s funds.

Seven years ago, The Burlington Free Press reported the college’s total endowment was about $150,000; for comparison’s sake, the University of Vermont’s endowment was $275 million in 2009. The college abandoned a plan to locate its 6,600-volume library in a new building across North Avenue because the projected cost had risen from $250,000 to $350,000. “It just became financially unfeasible,” then-President Mary Clancy said.

Sanders said the college has set aside money recently in anticipation of building at the current site, had refinanced debt at lower interest rates and undertaken “substantial energy-efficiency improvements.” She added: “Those lowered expenses were set aside for expansion in addition to other funds. We plan to secure tax-exempt financing in the form of bank-qualified loans or private placement. We also plan to start a 4 million dollar capital campaign.”

Coveted property?

As allegations of priest sexual abuse mounted, and the diocese’s legal troubles worsened during the past decade, the possibility the church might have to sell the prime parcels came into focus. The announced settlement with 26 alleged victims forced the sale — and prompted the diocese also to place a 26.5-acre lakeside camp property in Colchester on the market, too.

Erick Hoekstra, a development manager with Redstone, a commercial development firm in Burlington, said the North Avenue property might have been overvalued by the city. While theoretically the land could hold as many as 600 housing units, a more realistic number, he said, might be 200, given parking requirements and the topography.

He said the land might be worth as much as $10 million, but “more realistically, $5 million to $7 million.”

Hoekstra said a commercial developer would consider converting the existing buildings into apartments or condominiums, but that would be pricey.

“You would spend as much converting as building a new building,” he said. Elevators will be required, probably new stairwells, and the building’s electrical and mechanical systems will require work, he said. He added that the college will have to go through the same renovations: “The buildings don’t contribute a tremendous amount of value to the site.”

The cost of converting the buildings to college use, said Kurt Kaffenburger, an appraiser with Keller, O’Brien and Kaffenburger, “is the million-dollar question. The retrofitting is expensive and complicated.”

Mark Brooks, of Allen and Brooks real estate appraisers in South Burlington, speaking theoretically, said that to arrive at a value for the property, an appraiser first would determine the possible uses under the zoning code. Then, he would determine which of those uses meets current market demand and which, specifically, “brings the highest potential value.”

The cost of reconfiguring the buildings, he said, is unknown, as it depends on the condition of the buildings and multiple factors that might not be fully knowable until actual work began.

Sanders said the college plans no new building on the diocesan land and will retain for the present its current building at North Street and North Avenue while looking “at options.”

The sale of the property to an institution of higher learning means the property will remain off the city’s tax rolls.

Community and Economic Development Office Director Larry Kupferman said the purchase is “a very positive move for Burlington College. It’s a great opportunity for them,” he said. “We wish them well and look forward to working with them on whatever potential they see for the site.”

Read the complete article from BurlingtonFreePress.com »