"Gwen Steigelman" (gwens@uoregon.edu)
To: (senate05-06@lists.uoregon.edu)
Time: Wed, 24 May 2006 18:03:01 -0700
Subject: FW: Heads-up email alert: Westmoreland sale agreement
Senators -- here is a statement regarding the Westmoreland sale. Gwen

University of Oregon signs Westmoreland sale agreement Purchaser will rent to current and future students; invest $1 million in renovations

Eugene, Ore-(May 24, 2006)-The University of Oregon today announced the signing of a purchase and sale agreement for the Westmoreland housing complex.

Pending approval by the State Board of Higher Education, the university agreed to sell the property to Michael R. O'Connell, Sr., owner of a commercial and investment real estate business. The purchase price was $18.45 million and will net the university $18 million after accounting for buyer credit at closing.

O'Connell has agreed to allow current Westmoreland tenants to remain, if the tenants desire. Current tenants will be offered new lease agreements by the buyer that will allow them to continue to remain at Westmoreland through June 2007. The property will be managed by Bell Real Estate.

Signing of the purchase and sale agreement begins a due diligence period and a public process in which the university will seek State Board of Higher Education approval. The university anticipates the Oregon University System will hold two hearings in Eugene on the proposal on June 5 and June 13, before the end of spring term.

"This proposal meets the needs of current tenants," said Frances Dyke, vice president for finance and administration at the university. "It will maintain the available housing stock for future students, and, by freeing bond debt, allows the university to move forward developing housing on campus that will best meet the needs of students."

"My plans for the Westmoreland property are to operate close to status quo," said O'Connell. "We have earmarked approximately $1 million for renovation. Even with our much larger basis and debt service, I believe we can keep the rents at a very affordable level. We anticipate that we will have a large number of retained and new students."

With a sale agreement in place, the university will finalize the mitigation plans for current residents. It is expected that the university will help students cover potential rent increases through June 2007.

Sources: Frances Dyke, vice president for finance and administration, (541) 346-3003

See accompanying fact sheet.

Fact Sheet: Westmoreland Purchase Agreement

* The university entered into a purchase and sale agreement for the Westmoreland housing complex with Michael R. Connell, Sr., pending State Board of Higher Education approval.

* The sale price is $18.45 million - netting $18 million after buyer credit at closing. After the due diligence period is completed, Bell Real Estate will assume management of Westmoreland.

* The agreement requires approval by the State Board of Higher Education. Chancellor George Pernsteiner will hold two hearings on the proposal in Eugene (site to be determined) on Monday, June 5 and Tuesday, June 13.

* Sale of the Westmoreland complex allows the university to move forward with addressing critical on-campus housing needs. The university's proposed F-bond project list includes three housing projects and renovations that will be possible if the sale of Westmoreland is approved.

* The university is continuing to consider ways to mitigate ownership transition issues for students. The university will provide financial assistance to eligible current residents who wish to remain at Westmoreland for 2006-07 in the event of increased rent costs.

* The university already took action to address the child care needs of current students. Earlier this year, the university purchased a modular child care unit for placement at the Vivian Olum Child Development Center in order to guarantee the availability and capacity of campus child care programs upon the closure of the EMU Child Development Center's satellite Westmoreland facility.

* Westmoreland is a 37-building apartment complex with 404 units that has been intended to house university students with families. Construction of the complex was begun in 1960 and completed in 1964. Currently, 234 units are occupied, and 30 percent include households with children.

* The University of Oregon offers family housing to students with children at Spencer View and in the East Campus/Agate Street area. Spencer View Family Housing complex opened in fall 1996. Phase II of the Spencer View complex was completed in summer 1997. Family housing units are currently available at Spencer View.