2nd VIEW: Seminary finalizes campus sale; ready to secure new Calif. site; increases endowment by $50M
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Originally posted July 24, 2014
MILL VALLEY, Calif. (BP) -- Golden Gate Baptist Theological Seminary has finalized the sale of its property near Mill Valley, Calif., setting aside funds both to purchase a new campus in Southern California and add $50 million to its endowment.
The sale agreement for Golden Gate's Mill Valley property included a base price of $85 million, along with other terms financially advantageous to the seminary, including a favorable lease-back rate; the ability for the seminary to remain fully operational in the Mill Valley location for two years; and the seminary retaining revenue earned through rentals and other uses of the property during the lease-back period.
Jeff Iorg, Golden Gate's president, praised the seminary's board of trustees for their fiscal discipline in reserving significant proceeds from the sale for the seminary's endowment.
"We are delighted this first phase of our relocation is complete," Iorg said. "It took us 70 years to gather an endowment of $21 million. Increasing our endowment by another $50 million in such a short time is amazing."
Board chairman Steve Sheldon added, "The board is determined the property sale will dramatically improve our long-term financial health. By adding this much to our endowment, we are accomplishing that goal."
The board also approved an allocation of resources for new facilities in Southern California, Iorg reported. "We are pleased with how circumstances are coming together related to our future campus in Southern California. Now that the sale has been finalized, we can conclude our agreements for the new campus and announce those in a few weeks. God is bringing this entire process together in ways we could have never imagined," he said.
The seminary is finalizing plans for its new primary campus in Southern California and a new regional campus in the San Francisco Bay Area. "We appreciate the hard work so many are doing on this project," Iorg said. "I am particularly grateful for our faculty and staff who are working hard to keep us fully operational during this transition."
In commenting on the sale agreement, Iorg said, "There's been much conjecture about the value of the Mill Valley property over the years. In reality, because of the development restrictions on the property, its value is less than some have speculated. We have tried for years to remove these entitlement restrictions, to no avail. We have watched with increased urgency as value has continued to erode because of these restrictions. This helps explain the necessity of our decision to sell the property."
Iorg said the seminary had received "multiple offers for the property over the past two years. All of them were for less than the offer we ultimately accepted. An indispensable part of the agreement is the two-year lease-back. We had to build the relocation process around the needs of students," he said. "We could not sell the land and close the campus abruptly. We had to have a sale and relocation process that preserved our institutional commitment to current students."
Golden Gate trustee Stuart Smith, president of Stuart Smith and Company, said the sale process "has been one of the most complicated and difficult land deals I have witnessed in more than 20 years in the commercial real estate business. Our board has spent countless hours analyzing reports, considering options and trying to find a way forward. This agreement took more than a year to hammer out, but in the end it met our goals."
Jim Williams, president of T. James Williams Accounting and a trustee whose term concluded in June, added, "We spent considerable time analyzing the financial details of this transaction. The value for the seminary is significant and will make a huge difference in our long-term financial health."
Golden Gate's relocation plan, as it relates to students, has received a positive review by the staff of the Western Association of Schools and Colleges (WASC), the seminary's regional accrediting agency, who affirmed the transition plan for its thoroughness and focus on students.
Michael Martin, GGBTS vice president of academic affairs, said, "We have fulfilled every expectation of our regional accrediting agency and have kept faith with our students. Every student has a clear pathway to graduation, which we were committed to maintaining as part of the sale and relocation process."
"Students and potential students are endorsing our new direction. Approved applications for Fall enrollment are actually ahead of the same time frame last year," Iorg said. "Given the breadth of our current transition, that is unexpected confirmation we are on the right track."
Ben M. Skaug is vice president for institutional advancement for Golden Gate Baptist Theological Seminary.