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Buyer's Market

March 3, 2010

Community college leaders eyeing institutional expansion have found a silver lining to the depressed real estate market. Though dwindling state appropriations have halted new construction on many campuses, burgeoning student enrollments have inspired some college officials to buy dilapidated storefronts and acquire public property for development.

Officials from St. Louis Community College, in Missouri, were looking for budget-conscious solutions to their institution’s overcrowding problems. And they may have found one in an abandoned Circuit City adjacent to the college’s Florissant Valley campus.

“The property market is tremendous right now,” said Carla Chance, vice chancellor for finance. “There are tons of vacant parcels, and there is more property on the market than there are buyers. The Circuit City space is just so ideal for us in terms of location and price. Retail facilities are often just warehouse space with a pretty much open floor plan, so there’s not much tear out. We can focus our money on building into that open floor plan. The cost of the acquisition of this property and the renovation will be a third of what we would have spent building a new building from the ground up.”

The college paid $1.185 million for the 32,000 square foot building and will spend $2 million to renovate it; the cost of both equate to about $100 a square foot. Chance said the college would have to pay about $300 a square foot to build a comparable structure from scratch, so the decision to renovate the vacant storefront and renovate it may save the college more than $6 million.

With about 28,000 total students, St. Louis Community College has grown nearly 13 percent since last academic year. Chance said most of this growth is in its career-specific training and technical education programs. The warehouse shell of the Circuit City building, she noted, is perfect for the expansion of welding and aerospace programs that need lots of room.

“I heard a community college president on a panel last year say … ‘Instead of waiting years to design and build a new campus, why don’t we just buy a campus?’ ” Chance said. “We thought the same thing. It’s so smart to take an asset that might otherwise have started to deteriorate, both for the college and the city. We also feel good from a green perspective. This is the ultimate sustainable practice, building in the footprint of another structure.”

Officials from Niagara County Community College, in New York, also have their eye on vacant commercial property. They want to house their new culinary institute in an empty shopping mall in downtown Niagara Falls. According to rough plans that have yet to be approved by the local government, the college would open a faculty- and student-run restaurant and retail space in the mall alongside classroom space.

Low property values are also appealing to community college officials in other ways. Instead of buying space from a private owner, some community colleges are saving money by swapping comparably valued land with local governments, completing transactions without cutting a check for the property.

For example, Green River Community College, in Washington, recently completed a land swap with the city of Auburn that both parties find mutually beneficial. The city will give the college a decrepit neighborhood park, across the street from the main campus and valued at $680,000, in exchange for a 7.14 acre plot just north of the park, valued at $400,000. The city will use the college’s old plot for a new neighborhood park, while the college plans to demolish the old park to make way for a new “trades and industry” building.

Photo: S. M. Stemper Architects

Master plan for Green River Community College's new "trades and industry" building, below, and the city of Auburn's new neighborhood park, above.

John Ramsey, Green River spokesman, said the $280,000 differential will be paid by the college and “go into amenities for the new park.” He added that the land swap will help the college maintain parking spaces for faculty and commuting students. If the college had not bought the park land for the new building, he said, it would have had to build it over existing parking. The college would then have to demolish the old “trades and industry” building to make up for the lost parking once the construction on the new facility was completed.

Above all, Ramsey noted, the land swap makes room for the expansion of the college’s booming career and technical programs. He noted that the current building was only designed to handle about 15 students at a time for courses like automotive technology and welding but that each section of those courses now had at least 25 students in them. Though the college runs sections of these courses day and night, he said there is a still a long waiting list.

“With skyrocketing enrollments and the fact that most of the community and technical colleges in our area are landlocked, I don’t think it’s surprising at all that more institutions are looking into land swaps,” Ramsey said. “To get additional space, especially in this economy, you have to think in nontraditional terms.”

Elgin Community College, in Illinois, recently agreed to a similar swap with the city of Elgin. The college will receive 16 acres of an abandoned city golf course in exchange for one of its older classroom facilities, located downtown. City officials want to turn the old college building into affordable housing units for local artists with common gallery space. The college will use the 16 acres for future expansion.

Photo: Mark Carriveau / Elgin Community College

Older building Elgin Community College gave to city in exchange for 16-acre plot.

David Sam, president of the community college, said the college reached an all-time enrollment high this semester with 11,894 students. He also noted that both the old building and the 16 acres are valued at $2.5 million, meaning that neither the city nor the college will have to pay for a differential in the transaction.

“There is a net savings in this deal,” Sam said. “If were to renovate that old building to bring it up to our standards, it would cost us close to $40 million. But, by taking some vacant buildings we already had on campus and renovating them, it will cost us less than half that.”

The newly renovated facility on campus, like the old building just given to the city, will eventually house the college’s growing adult education, workforce development and English as a second language programs.

 

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