Controlling Board approves University of Akron sale of Quaker Square after lawmakers press for details on price, maintenance and bonds

The State Controlling Board on April 7 approved the University of Akron’s plan to sell the Quaker Square property, after board members pressed state officials for details about the university’s 2007 purchase price, estimated deferred maintenance and how outstanding bond obligations will be satisfied.

Board President Schueller called the item and members approved it without recorded objection. Senator Wilkin and other members questioned why a property bought in February 2007 for $22,700,000 is being marketed now at a price that officials described in the meeting as $800,000.

“So we paid $22,700,000 and we are now gonna turn around and sell this for $800,000,” Senator Wilkin said during the discussion.

Ally Buccello, appearing on behalf of the Department of Administrative Services, said the property was purchased in 02/2007 and that “there was about $5,000,000 put into the property at the time.” Buccello said the university listed the property about four years ago through a broker and at one point used a $4,000,000 asking price before removing the listing to solicit offers.

A representative from the DAS Office of Real Estate and Planning described the department’s role in vetting sales and said the office performed due diligence, including reviewing bond indebtedness, legal descriptions and title defects, and assessing environmental issues and market value. On the question of outstanding bonds, the DAS representative said, “the bonds will not be defeased. However, the purchase price will actually, you either have to defease bonds or you apply the purchase price to bonds to satisfy the outstanding option.”

Senators asked how long DAS had been engaged on the transaction; the DAS representative said the office had been involved for about six months. Lawmakers pressed for historical appraisals and for more information about the $57 million estimate for deferred maintenance; agency representatives said they did not have a historical appraisal on hand and could not confirm deferred-maintenance figures from the 2007 acquisition.

The board approved the item following the discussion. The transcript shows no roll-call vote on the held item; board members were polled earlier for objections and none were raised for the held item at the time of approval.

Why it matters: Board members said the sale touches on oversight of state real-estate transactions, long-term stewardship of state-owned properties and the treatment of bond proceeds when properties subject to bond financing are sold.

The university and DAS agreed to follow up with additional documentation as requested by board members.

Ending: The board moved on to the next held item after approving the sale. Members who raised questions said they expected follow-up information from DAS and the university.