Ohio University is looking to sell property it owns on E. State street for $12.05 million. The university currently leases the properties to businesses for rent revenue, but wants to sell the properties because the properties are “undervalued.”
Last year, Ohio University made more than $550,000 from land it leases on East State Street. Now, it is looking to sell that land for about $12 million.
Stephen Golding, vice president of finance and administration, said these properties are “undervalued,” a large part of why OU is looking to sell these lands.
“Universities are being encouraged (by the state) to look at their land holdings and make a determination if their monetary value can be put to a higher and better use,” said Katie Quaranta, an OU spokeswoman. “We have identified the East State Street properties as potential land that could be sold and the proceeds used for something else.”
Over the last five years, all of the land OU leases has generated more than $3.7 million.
It would take 16 years to generate revenue worth the $12 million OU is seeking to sell that land for.
Money generated from selling the land would be used to “expand the footprint of the Athens campus,” according to a previous Post article. That could include buying property around the main academic campus or investing in the Ridges.
Kevin Markelowski, a business analyst at OU’s Office of Real Estate Management, said there is not a concrete plan for the money yet.
“The declaration of the property as surplus is the first step in developing a strategy,” he said. “This is just the beginning of that process.”
The exact amount of money the university makes as lease income is a hard number to pin down. The Office of Real Estate management is a relatively new entity at OU, and before it was established, the records were not well kept.
Markelowski spent about a week sorting through the data and said he has gathered the correct numbers from their various places.
“It’s as complete of a data set as we are going to get,” Markelowski said.
The land on East State Street is the current home of many popular businesses.
Lowes, Kroger and the Athens Mall all sit on land owned by the university. These businesses pay the university a cer
tain amount of rent a year, their base rent and then a percentage of sales, known as the percent rent. When combined, these two numbers are what OU gains each year in lease income.
Though many of these businesses have a percentage rent clause in their contract, according to numbers given to The Post by OU, the portion of the total rent from the percentage rent was only around $106,000 last year, with about $101,000 from Kroger alone.
The land, about 70 acres, was valued at $12.05 million by an outside company, according to a previous Post article.
Last month, the Board of Trustees voted to give President Roderick McDavis the ability to sell the land OU leases to other businesses. The process of selling the land, Markelowski said, is a long one, and this is only the first step.
@SethPArcher
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