Burlington College is planning to sell all but seven acres of the lakefront campus it acquired just a few years ago. Interim president Mike Smith said in an interview Monday that the school needs money from a sale soon in order to survive.
After what he described as a “deep dive” into the school’s finances during the last several weeks, Smith said he came to the conclusion that absent an immediate infusion of cash, “Burlington College is not a viable ongoing entity.” He determined that it would likely need to undergo a “soft closure,” starting next year.
The college, which currently has $11.4 million in debt, plans to sell 25 acres, including the land closest to Lake Champlain, for $7 million to a local developer, Eric Farrell, who intends to build a large housing development there. Under the deal, Farrell would assume the $3.5 million debt that Burlington College owes to the Catholic diocese for the original purchase of the property, and he would provide the remaining $3.5 million in cash to the college. The two parties expect to sign a memorandum of understanding on November 1.
As part of that agreement, though, Smith said he’ll give land-conservation groups 60 days to beat Farrell’s price, in which case he’ll sell it to them. “Eric supposedly put his best price there and if a conservation [group] comes in and does it and beats it, they got it.” Asked why he settled on 60 days, Smith responded, “We have a cash-flow problem, and we have to close it.”
Whoever the buyer is, Smith hopes to close on a sale by January 2, which will also mark the end of his interim presidency.
Mayor Miro Weinberger released a supportive statement in response to the announcement: “I am pleased to see Burlington College taking decisive, proactive steps to address its serious financial challenges. I support the efforts of the Board and its new management team to save this important Burlington institution. The City has a variety of interests with respect to the property – for example, an east-west public connection to the bike path is a goal that has been well-defined in multiple Parks, Recreation, & Waterfront planning efforts and documents – and we will continue to be engaged in the development and conservation discussions about the land in the months and years ahead.”
Under its former president, Christine Plunkett, the college had agreed to partner with Farrell in a different plan to construct housing and expand the campus. There was no signed agreement, however, and Smith said he opted to change course for two reasons. Under the previous plan, the college would have sold Farrell 16 acres and received $5 million over a longer time period (as late as 2019, according to Smith), and he determined that the school needed more money, immediately. “The problem with that is we can’t wait.” Smith also felt that the administration couldn’t afford to devote time and resources to developing the property. “I think we need to concentrate on higher education, not development.” he said.
Under the current potential deal with Farrell, the college would keep enough land to build two dorms and a football field-size green. Farrell’s development plan consists of 21 single-family homes, a three-story building with 75 units of senior housing, a three-story building with 60 units of affordable housing, two five-story buildings with 300 market-rate units combined and another three-story building without a designated purpose yet.
Smith said Farrell’s offer is close to the property’s appraised value, and he decided not to open the bidding up to other developers because the school had already agreed to work with Farrell.
The college currently has $300,000 in unpaid bills, and 75 percent of them are more than 90 days old, according to Smith. It also owes $735,000 in debt payments this year — an obligation it can’t currently meet. “The debt service is bleeding us,” Smith said, adding that, “We’ve maxed out all of our borrowing capability.” The college plans to use the money from the land sale to reduce its debt from $11.4 million to $4.3 million.
Smith said he discussed the plan with faculty, staff and two student representatives last Friday and concluded that “they were generally supportive.”
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The faculty, staff and two students were “genuinely” supportive. What were their suggestions to reduce the debt and not allow the college to fail?
How can this fraud continue??The property was bought with a fraudulent balance sheet and empty promises ho is it that Farrell get an inside track on Development this is Bernie Sanders crony capitalism deal to put him on the VARSITY FRAUD TEAM . How is this development deal approved by the city? where is the act 250 due diligence??? The loan and the deal is a fraud perpetrated on the tax payers by Jane Sanders and Jonathan Leopold Tony Pomeraleau etc. it never would have been approved with out Sanders insider deal. Jane Sanders bankrupt the college and took a pay off plain and simple she lied about every metric .
Sanders should be hung from a yard arm for taking graft.
I am bitterly disappointed and somewhat incredulous.
Anyone thought this guy was going to have a creative solution?
I guess, I’m the only one who can understand why I feel sick and disgusted but… this is bad.
Farrel can now rape this property up in good shape.
Dana,
What was the creative solution? They didn’t have many choices once Sanders signed the papers and had no asset to back up her plans with this was a crime.
The fraud was made in the purchase agreement. No one has put the property up for a bid or price discovery there has been an insider appraisal a low ball with the city for the diocese in kind payment in lieu of taxes and it was continued.
The school lied about its financial position to the bonding authority when they paid off Jane and Bernie Sanders and were left with an 8 dollar cushion in the bank not the half a million they needed to continue the charade.
Pomereleau pledged his commission check on the sale of the property to the Diocese so he is out zero, he has no skin in the game its a charade. But he will collect commission checks when its time to sell million upon million s of new properties.
I think it is in the college workers best interest to put the property up at auction for a competitive bidding process not just for the college but the community at large. This is the last piece of property that is undeveloped with waterfront views. Half acre lots on Apple tree point are listed at 700k each. so that is a 38 million dollar land value.
Is Mr Smith really getting the best deal at 7 million? Not freaking likely even half of 38 is better than the gift that he is giving to Farrell. It’s a joke and a crime the bonding authority should exercise their options and declare this thing a fraud that it is. It is nothing more than an insider deal concocted by Sanders and his Crony’s to enrich themselves at the public and colleges expense.
great move BC, stay true to your mission, Education, I love it
OK, Mayor. Step up and look out for Burlington’s interests! 21 single family homes and 435 units in that space!?
Is this the best direction for Burlington’s waterfront?
Maybe the 2 Sanders will take responsibility for this mess . How about it Bernie ? What about you Jane ?
So because of mismanaging do-gooders in over their heads, a marginal education institution buys itself time but Burlington permanently loses a gem.
At the very least the property ought to be put up for competitive proposals. You know who people turn to when they find themselves between a financial rock and a hard place? Loan sharks. Think this is any different?
DISGRACEFUL!
Lets run the numbers here for Pomerleau’s commission and Sanders selling out fraud of her College colleagues for a few shekels 435 units average price 200k 21 homes at 450k
is this property only worth 7 million . the seven acre lot turns into 9,450,000. Tony P’s cut 6% the remaining piece with the 435 units is worth 87 million so lets total the fraud numbers for Fat Tony the Rentier.
Ninety six and a half million in property value times his commission of 6%= a crony fraud pay off of five million seven hundred and ninety thousand dollars.
This is a fine example of millionaires and billionaires getting paid off by a local politician for a 200k pay off.
Bernie why arent you foaming at the mouth pounding the table saying this is outrageous???
No one else in the state of Vermont but Bernie Sanders and his wife would have been given the opportunity to access the states bonding authority to control this property with virtually no money down and a fictional balance sheet.
It was the bankruptcy that has allowed this fraud to push through for the big pay day.
Sanders is standing behind a thin veil that she was due money the school didn’t have for her performance that bankrupt the college and placed this very, very valuable piece of property in the hand s of crony developers who are not participating in a competitive price discovery process that is not open to any other developer. the 200k was graft as they are not in a competitive environment and are only enriching their friends and Sanders took the money previously pledged tot he bonding authority which caused the college to be in default.
Plain and simple this is fraud.