The Ohio University Board of Trustees recently approved a plan for the university to downsize its real estate portfolio to reduce expenditures on unused spaces.
The plan names 21 buildings, including The Ridges, Lasher and Haning Halls, 31 S. Court St., and several regional campus spaces, for lease or potential sale in coming years. The plan was first put forward in April and analyzes the status of university buildings with regards to deferred maintenance, current costs and use of space.
“Basically figuring out which buildings do we need to meet the academic purpose of the university … it's a way to right-size our portfolio to be a more effective and efficient university,” OU Director of Real Estate Dominick Brook said.
The plan spans the next few years, with the total cost benefits expected to be realized in five years. To execute the plan, the university will spend over $13 million during that time period, with the results offsetting over $20 million in deferred maintenance costs and reducing annual expenses by $1.5 million thereafter.
“Any leased structure is going to have a positive return on investment. It's going to allow us to rehabilitate those buildings, get rid of the deferred maintenance and essentially, when the lease ends we will have a fully refurbished building at no cost to the university,” Brook said.
In the past, real estate revenue has flowed back to the central budget, but a decision about the use of the divestment money has not yet been solidified, Brook said. He indicated there may be potential to reinvest funds back into rehabilitation or further reducing real estate holdings.
Following the surplus property approval by the Board of Trustees, the proposed sales will be placed on a state bill to be approved by the Ohio General Assembly and signed by the governor. Once that occurs, the university has three years to sell the properties.
A few interested buyers have approached the university, but Brook anticipates that as a divestment plan has been put forward, the university will receive much more interest. As this occurs, the university will be able to more fully develop a picture of what its mission is with the structures.
The new property plan is not the first time OU has sought to liquidate or repurpose properties. The Pilcher House on East Union Street, as well as the Child Development Center on the Southern campus, were sold in 2021, resulting in $319,000 sale revenue. The university also began leasing the horse park on Southern campus in 2020 for $24,000 in annual lease revenue.
“What is new, is more of the comprehensive and … proactive approach looking holistically at all of our assets and putting forth information with respect to that … looking and thinking long term about our financial implications of this, but as well as for our community partners. There's simply properties that we have and facilities that we have that we are not utilizing that are of benefit to others,” Associate Vice President of University Planning Shawna Bolin said at the October Board of Trustees meeting.
One significant project put forward as part of the real estate divestment plan is the demolition of Scott Quad, a currently unoccupied former residence hall near College Green, built in 1937. The building has been vacant recently due to facility problems and backlogged deferred maintenance.
Though the Board expressed concern about the demolition of such a historic building in the area, Bolin assured them that, though difficult, demolition was determined to be the most feasible course of action in an effort to remedy the budget deficit. The decision considered the significant costs to modernize and refurbish the building, estimated at $48.6 million, as well as the lack of use for the space.
The current plan is to demolish the building and landscape the area, turning it into an engagement corridor.
“This is a comprehensive process, and it's not something that happens overnight so there's a lot of work that goes into this and consideration,” Carly Leatherwood, a university spokesperson, said. “We talk to the city partners about what we're doing too, so it's not done in isolation. There's a lot that goes into it.”