WMU to purchase property for student housing
Sept. 18, 2000
KALAMAZOO -- A portion of the Kalamazoo property known as the Arboretum will be purchased by Western Michigan University from the WMU Foundation and used for development of a previously announced student apartment complex.
WMU's Board of Trustees approved the University's purchase Sept. 15 of approximately 20 acres, known as Area 10, of the larger 183-acre development tract. The agreement calls for the University to pay a principal amount of $1.5 million over the lifetime of a 30-year installment note. The note will carry an annual interest rate of 10 percent, which will increase by 3 percent every 10 years.
"While it is not our intent to expand the University's student housing operation over the long term, we need to develop new housing units before some of our older housing units can be taken off line," said Robert Beam, WMU vice president for business and finance, who presented the proposal to the board. "Because the University and the foundation are legally separate entities, we need to formally transfer the property to move the project forward."
Beam said the sale price of the parcel was based on a recent purchase offer made on the land from another organization.
The University has begun construction of 240 student apartments on the parcel, which is located east of Drake Road and north of Michigan Avenue. The first half of the units are expected to be online for the fall 2001 semester, with the remaining units scheduled for completion the following fall. When complete, the complex will house some 680 students. Funding for construction is expected to be provided by a $25 million bond offering.
As part of the same board motion, trustees agreed to a development agreement for the project with Collegiate Partners LLC of Kalamazoo. Under terms of the agreement, the University will own the real estate and all improvements to the tract while the developer will be responsible for construction management and will be responsible for providing a construction warranty. The firm will be paid $1.4 million, with one-half of the amount payable upon completion of each phase.
Media contact: Matt Kurz, 616 387-8400, email@example.com