News

OU Wants East State Properties Declared Surplus

By:
Posted on:

< < Back to

Ohio University will be seeking approval next week from its board of trustees to declare large amounts of property it owns on East State Street as surplus.

In a memo to OU President Roderick McDavis and the board of trustees, Stephen Golding, OU vice president for finance and administration, wrote that the OU Office of Real Estate Management recommends that 739-859 E. State St. (known as the Shoppes at Athens); 917-921 E. State St. (Kroger) and 929-983 E. State St. (Walmart, Staples strip mall and Lowes), all out-lots, and 24 Home St. (Putnam Square Apartments) be declared surplus.

He said that appraisals have been performed on the locations and indicate the following estimated market value of the land: Shoppes at Athens strip mall, $1.2 million; Kroger, $6 million; Walmart, Staples strip mall and Lowes, $4.5 million; and Putnam Square Apartments, $350,000.

“The lease evaluation suggests that the current ground leases are undervalued and a disposition strategy will allow revenue from the sale of the property to be reinvested into projects that support the core mission of the university and expand the footprint of the Athens campus,” Golding wrote in the memo dated Sept. 29. He further wrote that the trustees will be asked to proceed with the declaration of surplus property next week, with further details to be shared with the board’s Resources Committee in January.

The resolution included in the board materials for next week’s meeting states that “economic, market evaluation and development considerations have altered the strategic value of Ohio University’s continued ownership of these parcels, and Ohio University, after evaluation, inspection, appraisal and analysis of property, has determined that its greatest value may be realized through possible commercial sale and/or other economic repurposing.”

Ohio University owns much of the land south of East State Street as it once served as the Ohio University Airport. The university acquired the airport in 1943, which was used as early as the 1930s for the Civilian Air Patrol, and eventually used it for OU’s aviation training program.

When the new highway for Route 50/33 was planned in the late 1960s, OU opted to relocate the airport to its current location off Route 50 near Albany, leaving the former East State airstrip abandoned and ready for development.

OU still owns most of the property on the south side of East State and collects rent from many of the tenants occupying that space. As The Messenger previously reported, OU received $501,017 in Fiscal Year 2011 from East State Street rent alone.

In addition to the rental income, the university also received a portion of the profits from Kroger and the Baymont Inn and Suites. Kroger gives OU 10 percent of its net income, which totaled $170,000 in 2011.

The OU Board of Trustees voted to declare the land on Home Street that houses Bob Evans and the Baymont Inn as surplus in November 2013. OU received 5 percent of the Baymont’s revenue exceeding $500,000 a year — which equaled $42,000 in 2011. It’s unclear if OU is still receiving rent and additional revenue from the hotel.

Donna Goss, OU’s director of engagement and real estate management, did not return emails requesting additional information prior to The Messenger’s news deadline on Thursday. The trustees are slated to meet on Oct. 16-17 in Walter Hall.