After being forced to shutter its doors earlier this year, the College of New Rochelle has officially filed for Chapter 11 bankruptcy and its campus is expected to be sold within the next two months.
Following a three-year financial crisis, the 115-year-old college concluded classes on Saturday, Aug. 10. Mercy College is temporarily leasing the campus and will use the facilities through 2020.
In response to the financial crisis, the college has been selling off its assets, including its 15.6-acre campus, which includes more than 425,000-square-feet and includes 20 buildings.
A&G Realty Partners and B6 Real Estate Advisors have been retained by the College of New Rochelle as real estate advisors, and announced a November deadline to submit qualifying bids to participate in the bankruptcy auction.
Final bidding procedures and deadlines will be announced once approved by the court in the coming weeks.
“The bankruptcy filing is the final chapter of this storied college. Over the course of the last 115 years, CNR has provided more than 87,000 students - women and men, both traditional age and adult learners - with the opportunity to better their lives through education,” Mark Podgainy of Getzler Henrich & Associates, the Interim Chief Restructuring Officer of CNR, said in a statement. “We are pleased to have two well-respected and experienced firms in A&G Realty and B6 Real Estate Advisors to oversee the sale of the campus as it transitions to its next chapter.”
The zoning for the property allows for both residential or educational use. Any other options would need to be cleared by city officials in New Rochelle.
“It is an operating college and ideal for continued use as an educational institution,” Emilio Amendola, co-founder, and co-president of A&G Realty said in a statement. “Alternatively, it could be redeveloped into residential or appropriate uses through collaboration with City government and the New Rochelle community.”
The campus also features a modern recreational and educational complex, including an NCAA competition-sized swimming pool and basketball court; computer and photography labs; a TV production studio; a 200,000-volume state-of-the-art library; a student center; a life sciences building with several laboratories; four residence halls and a learning resource center for nursing.
“Properties such as this rarely become available and offer a one-of-a-kind opportunity to leverage an established, turnkey educational campus for a variety of uses,” Jeff Hubbard, Executive Managing Director of B6 Real Estate Advisors said. “There has been significant interest since the college first announced its closing and our team has created a structured sale process that will streamline the transaction for both the buyers and the college.”
The last day of classes at the College of New Rochelle were held on Saturday, Aug. 10. The college recently held its final graduation ceremony.
In 2016, CNR’s Board of Trustees was alerted about “significant unmet financial obligations that had accrued over a period of time.” The Board subsequently launched an investigation and enlisted the help of officials to restructure and manage CNR’s finances. A forensic accountant and outside legal counsel was also hired to perform the investigation.
The investigation ultimately found that CNR hadn’t paid upwards of $20 million in payroll taxes dating back to 2014. It determined that the college’s controller failed to file the required tax returns and to pay the taxes due. It also revealed that senior management did not provide accurate information to the Board about the college’s finances. The investigation also revealed other significant debts, liabilities, and depletion of assets - including the unrestricted endowment - that total more than $11 million.
CNR took extreme measures following the discovery of the misappropriated money, launching several fundraisers and soliciting donations for alumni. They raised millions of dollars, but the debt ultimately piled up, leading to Friday’s announcement. They sold off assets at a real estate auction and sought to secure a partnership to help the institution stay afloat.
“Despite our successes, the financial status of the College underscored the necessity to identify an institution that would provide a safe haven for students first and foremost while also doing our best to protect faculty and staff and CNR’s Ursuline legacy,” CNR President William Latimer noted. “We are blessed that our work with Mercy College provides the basis to accomplish each of these aims.
“The primary goal underlying our mutual agreement with Mercy College has been to provide maximum protection to students by providing a clear path forward to complete their degrees,” Latimer noted. “We are pleased to announce that of the approximately 2,700 remaining students, more than 900 graduated this spring, and an estimated 200 more students will graduate this summer in August. Additionally, nearly 1,000 students have already registered and enrolled at Mercy College for the fall semester, which will afford them a seamless transition as they continue their educational journeys. We are continuing our work with Mercy College to ensure that each and every student has a path forward.”
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