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Board approves Regions Bank loan to let UT buy 2200 Sutherland Avenue
Summary
The authority approved a bank loan enabling the University of Tennessee to exercise an early-purchase option for 2200 Sutherland Avenue, with an option price of $23.1 million plus up to $2 million in reimbursements and an expected closing at or below $25.1 million; staff said the bank loan produces a maximum annual obligation just under $1.9 million and likely counts against E&G capacity.
The Tennessee State School Bond Authority voted May 20 to approve a bank loan with Regions Bank that will allow the University of Tennessee to acquire 2200 Sutherland Avenue under an early purchase option in the parties' lease.
Austin Oaks told the authority the option price is $23,100,000 plus reimbursement of up to $2,000,000 for capital improvements the current owner has made, and staff anticipate a closing at or below $25,100,000. Oaks said using the bank loan would generate a maximum annual loan obligation of "just under $1,900,000 per year" while enabling UT to own the building in 20 years instead of continuing the lease through its current 30-year term.
Commissioner (identified in the transcript by role) asked whether the loan is subject to the authority's recent policy changes and whether it would count against E&G (education and general) capacity. Oaks said the statutory authority to use a bank loan predates the policy change and that because the facility will be predominantly E&G (with some planned childcare), the loan will likely count against E&G capacity.
Board members seconded the motion and approved it by roll-call vote; the transcript records no amendments or conditions. Staff said they will proceed with the closing and financing steps.
