SU Takes Next Step to Purchase Pine Meadow Apartments–Remaining Issues Could Still Bar Deal
Published on October 22, 2010
SELINSGROVE – The Board of Trustees of Susquehanna University, at its regularly scheduled meeting today, gave its approval for the administration to enter into contract negotiations with the owners of Pine Meadow Apartments (Sencit Pine Meadow Associates LP) for the purchase of the property at an undisclosed price. The board delegated final contract approval to its executive committee.
According to university officials, the purchase is also contingent on the successful completion of an extensive due diligence process that will be undertaken in the next three to four months, covering such issues as environmental, regulatory, and zoning. These were some of the subjects raised during the university’s comprehensive fact-finding work over the past five months. The board’s executive committee was also given authority to accept or reject the purchase based on its review of due diligence results. If approved, transfer of the property to university ownership would take place sometime after November 2011.
“The owners of Pine Meadow Apartments approached the university earlier this year to gauge our interest in their property. That was an offer worthy of serious study, and we appreciate the board’s recognition of the strategic value of the property,” noted L. Jay Lemons, president of the university. “However, work still must be done before a final decision is made to complete the acquisition.”
The 100-unit Pine Meadow complex sits on 10.66 acres that is adjacent to the university’s new science center and the Geisinger Clinic, which houses Susquehanna’s Student Health Center. It has been owned by Sencit since 1981. A 30-year contract with the U.S. Department of Housing & Urban Development (HUD) and a 30-year mortgage with the Pennsylvania Housing Finance Agency (PHFA) are both set to expire in November 2011.
“Because of its proximity to the university, Pine Meadow holds strategic value for us, both in the short term and long term, particularly as it relates to our need for more on-campus housing over the next five years,” explained Sara Kirkland, executive vice president for administration and planning for the university, and the point person on this project. “During the past six months, we have undertaken a strategic and financial analysis of the impact such a purchase would mean to the university. We are still working to understand complex HUD regulations related to Section 8 housing.
“We also wanted to fully understand how the community felt about this,” continued Kirkland. “That is very important to us.”
Pine Meadow is home to a diverse community comprised of some 300 people, including several dozen school-age children. At this time, the university has not finalized its plans for Pine Meadow, as the board has not yet approved the actual purchase, just the process of negotiating a contract and due diligence issues. However, at minimum, the residents of Pine Meadow have until November 2011 before any change in status can take effect.
When asked about the financial health of the university, Lemons added that the university’s reserves are in very good shape.