After being forced to shutter its doors earlier this year, the College of New Rochelle has found a buyer for its campus officially after filing for Chapter 11 bankruptcy.
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.
On Monday, Nov. 25, The Masonic Hall & Asylum Fund announced it had purchased the 15.6-acre campus for $32 million at auction. The United States Bankruptcy Court has already approved the sale at a hearing held on Monday.
The auction had begun on Thursday, Nov. 21 and concluded the following day, on Friday, Nov. 22.
“The sale of this storied college’s campus at auction is the final chapter in its long history of providing profitable educational opportunities to over 87,000 men and women for 115 years," Mark Podgainy of Getzler Henrich, the Interim Chief Restructuring Officer of the College, said. "We have full confidence that Trustees of The Masonic Hall & Asylum Fund will utilize and develop the campus in a manner that both preserves the legacy of this institution and offers value to the local community.”
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.”
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.
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