PORTLAND, Ore. — The University of Oregon board of trustees on Monday approved plans to buy the former Concordia University campus in northeast Portland for $60.5 million.
The approval eases the way, on the UO's side, for the sale from the Lutheran Church Extension Fund to go through, though there appear to be legal logistics to work out with regard to the sale before it's a done deal. A lawsuit from California-based HotChalk, launched in 2020, and a so-called "right of re-entry" interest of the Lutheran Church Missouri Synod may hinder the sale.
That "right of re-entry" interest essentially lets Missouri Synod take title to the property if it is "used for a purpose other than as a religious or educational institution affiliated with the Lutheran Church," UO board documents state. "As a condition of this sale, LCEF is required to reach agreement with the Missouri Synod to extinguish that right of reentry." LCEF is supposed to deliver UO that extinguishment by the sale close.
"Do we know with certainty that that's going to happen? No," said Kelly Walsh, shareholder at law firm Shwabe, Williamson and Wyatt, who helped pull together the transaction. "But I think we all feel very strongly that it will happen. We wouldn't have been this far down the road. The Lutheran Church Extension Fund would not have been spending the money it's spent to get to this point if they didn't believe that they could get that extinguished. So I think we feel confident."
HotChalk sued the parent of Concordia, the private university that closed in 2020 amid enrollment and debt issues, arguing it fraudulently transferred assets to avoid having to pay off debts. During Monday's board meeting, UO General Counsel Kevin Reed cast the HotChalk lawsuit as a money hunt that could take months or years to resolve. He said the UO is trying to avoid getting involved in that contract dispute.
Even so, "we are satisfied that the Lutheran Church Extension Fund has enough cash to satisfy that (potential) judgment way separate and apart from the value of this property," Reed said, "so we are not worried that even if everything took the weirdest bounce and the worst bounce for us, that we'd end up in a situation where HotChalk has a large judgment against the Lutheran Church Extension Fund, that suddenly they would have to cash in the value of the property we just bought in order to satisfy that judgment."
Board members unanimously approved the sale.
Read the full story at the Portland Business Journal.
Editor's note: the video in the media player above originally aired on March 5, 2022.