KALAMAZOO, Mich.—Western Michigan University has agreed to move forward with the transfer of its long-term lease on the University's Southwest regional location in Benton Harbor to its higher education partner, Lake Michigan College, for $2.7 million.
The WMU Board of Trustees, acting at its formal Sept. 20 meeting, agreed to move forward with negotiations that will result in a new lease agreement between LMC and the state of Michigan. The WMU board also agreed to enter into a new space usage agreement that will continue WMU's physical presence on the LMC campus as well as its role as LMC's preferred partner for students who want to earn bachelor's and graduate degrees.
Located on LMC's Napier Avenue campus and completed in 2002, the then-nearly $8.5 million facility was built with $2.4 million of WMU funds. The remaining cost was funded through the state of Michigan's capital outlay process. That funding mechanism resulted in WMU having a lease on the property that will expire in 2037, when tax exempt bonds issued by the state to pay for construction are paid off.
"This move allows LMC and WMU to maximize service to students in the Benton Harbor area and efficiently use existing facilities," said WMU Vice President for Business and Finance Jan Van Der Kley in presenting the proposed resolution to the board. "WMU offers and will continue to offer both graduate and undergraduate degree programs through the combination of online and in-person format that has become the norm. LMC will gain the physical space it needs to grow and renovate its campus."
The lease transfer for the 40,000-square-foot building will allow LMC to save at least $3.5 million on planned campus renovations and provide an alternative space to operate during construction. The agreement will not affect students' ability to continue attending WMU classes on LMC's Benton Harbor campus, as WMU will have a new 10-year no-cost lease to continue use of two classrooms and office space in the building being transferred to LMC. WMU can extend this lease for an additional five years.
In 2015, LMC began planning updates to all three of its campuses in Niles, South Haven and Benton Harbor. The projects are funded by private donations, a $7.9 million state grant and a 10-year capital millage proposal approved by district voters in November, 2016.
"The rationale behind this decision was first and foremost what is best for area students who rely on both of our institutions, but also LMC's responsibility to be frugal with the public dollars we have to leverage. We are getting a beautiful educational facility in great condition at a fraction of what it would cost to build. We're grateful to WMU for making this possible and for their continued commitment to southwest Michigan," said LMC President Dr. Trevor A. Kubatzke.
Plans are still being finalized, but LMC envisions the newly acquired building will house a dedicated space for students enrolled in LMC's business and computing programs, in addition to student receptions and public events.
"We received an enormous amount of thoughtful input from around our district in reimagining our ideal college environment. The cost savings from this opportunity will help us achieve the vision for all our campuses," said Kubatzke.
The college submitted its first renovation plans to the State for authorization in mid-September and expects the transfer to be complete as quickly as possible. Since the state of Michigan is the lessor and continues to hold outstanding tax-exempt bonds, the state needs to approve this move before WMU and LMC can proceed in naming LMC as the lessee with ownership interest.
WMU also holds tax-exempt bonds used to build the Southwest facility. They can be held through 2032. The University has the option of using the $2.7 million it receives from LMC to service that debt or apply the amount to another capital project. The intent, Van Der Kley says, is to use it for its College of Aviation project.
WMU-Southwest facility at LMC
Construction of the WMU-Southwest facility marked the first time a Michigan university had chosen to build an instructional facility on a community college campus. Construction was part of a unique partnership designed to expand opportunities for southwest Michigan residents by allowing them to take their first two years of classes at LMC, complete their bachelor's degrees at WMU and even move on to graduate programs without ever leaving the area.
WMU began offering academic programs in the Benton Harbor-St. Joseph area in 1916 and has had a permanent physical presence there since 1966. Currently, WMU offers six degree programs through its WMU-Southwest presence. Three are at the undergraduate level—business administration, elementary education and social work. Three degree offerings are at the graduate level—educational leadership, practice of teaching and social work.
For more WMU news, arts and events, visit wmich.edu/news.