REVISED M E M O R A N D U M November 14, 2012 TO: Members of the Executive Committee of the Board of Trustees FROM: Nancy L. Zimpher, Chancellor SUBJECT: Authorization to Lease Lands for the Development of Student Housing -- State University of New York College at Canton Action Requested The proposed resolution authorizes a ground lease with the SUNY Canton Alumni Association, Inc. to facilitate development of student housing at SUNY Canton. Resolution I recommend that the Executive Committee of the Board of Trustees adopt the following resolution: Whereas SUNY Canton wishes to attract student candidates for all academic levels and areas of study, and in support of this objective has established a business plan to develop alternative, attractive housing and provide for the construction and operation of a student housing complex with approximately 200 beds; and Whereas the SUNY Canton Alumni Association, Inc., a not-for-profit corporation organized under the laws of the State of New York, as a function of its mission to enter into arrangements with the University for the construction of student housing pursuant to, and in accordance with, Education Law §355, is willing to construct such new student housing; and Whereas Section 355 of the Education Law authorizes the State University of New York, subject to the approval of the Attorney General and the State Comptroller, and on terms and conditions determined by the Board of Trustees, to enter into a ground lease for the exclusive purpose of developing student housing on the campus of SUNY Canton; now, therefore, be it Resolved that the Chancellor, or designee, be, and hereby is, authorized in accordance with the provisions of Section 355 of the Education Law to enter into a ground lease agreement with the SUNY Canton Alumni Association, Inc., substantially in the form and of the content of the draft ground lease agreement on file in the Office of the Secretary of the University, for a parcel on the SUNY Canton Campus (a legal description of which is attached hereto), with such modifications and revisions as the Chancellor, or designee, may deem advisable, under which the SUNY Canton Alumni Association, Inc. or any duly approved sub-lessee will develop student housing; and, be it further Resolved that the Chancellor, or designee, be, and hereby is, authorized in accordance with the provisions of Section 355 of the Education Law to approve any amendments, modifications, or waivers of any provisions in the ground lease and related documents, including any sublease, which confer on the State University of New York or any of its officers or employees any rights of approval in regard to the student housing facility; and, be it further Resolved that the Chancellor, or designee, be, and hereby is, authorized in accordance with the provisions of Section 355 of the Education Law to provide all other approvals, notices, assurances or instruments or take such other actions in connection with the student housing facility as may be necessary from time to time, under the ground lease and related documents, including any sublease. Background Section 355(2)(i) of the Education law authorizes the State University Trustees to lease to alumni associations of institutions of the State University a portion of campus property for purposes of developing student housing. The statute further authorizes the State University Trustees to determine the specific terms of the lease and the type of housing to be built. SUNY Canton has proposed to enter into an arrangement with the SUNY Canton Alumni Association, Inc., a not-for-profit corporation, for the lease of approximately 5.67 acres of land on the SUNY Canton Campus. The legal description of the parcel is attached. The term of the proposed lease is a total of 42 years to allow the amortization of the debt for constructing the project over a period of 25 to 30 years. The 42-year term will also avoid any real estate transfer tax obligations. The construction would begin as soon as possible following lease approval and closing financing with an expected occupancy date of August 2014. The Alumni Association will, under the terms of the Lease, sublease the property to the Adirondack Roo LLC, an affiliate of the Canton College Foundation, which will construct the student housing and receive a revenue stream from the room rental income to cover its debt service. The project will include approximately 200 beds. Residence Life will operate the housing and be responsible for its maintenance pursuant to the terms and conditions of a Faculty Management Agreement between the College and Adirondack Roo LLC. The ground lease is patterned generally on ground leases currently in place between the University at Buffalo, SUNY Albany and SUNY Stony Brook campuses for the development of student housing and incubator facilities. The key provisions include: * The ground lease would provide the Alumni Association, Inc. with access to approximately 5.67 aces of college land for a period of 42 years. * The rent will be $1.00 per year. * The ground lease requires that the property be used exclusively for the construction, development and operation of student housing. * The property’s legal description is to be attached as Schedule A to the ground lease. * The sublessee must assure that performance bonds are provided and that all construction is performed in compliance with applicable building codes. * State University reserves the right to approve any curing of any default or any foreclosure by any mortgagee. * Upon expiration or termination of the lease, the property and improvements will automatically revert to State University. * The State fee simple interest in the property will not be affected by the lease or any mortgage on the property. * Prevailing wages must be paid for any construction work on the project. * The lessee must comply with affirmative action requirements under Article 15-A of the Executive Law. * The lessee must indemnify and hold the University harmless. LEGAL DESCRIPTION ALL THAT TRACT OF PARCEL OF LAND SITUATED IN THE TOWN AND VILLAGE OF CANTON, COUNTY OF ST. LAWRENCE, STATE OF NEW YORK AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE NORTHERLY RIGHT OF WAY LINE OF BIRD STREET, (60 FOOT WIDE RIGHT OF WAY) AT ITS INTERSECTION WITH THE EASTERLY RIGHT OF WAY LINE OF STILLMAN DRIVE, (60 FOOT WIDE RIGHT OF WAY) AS SHOWN ON A MAP ENTITLED “REVISED MAP OF THE EDSON A MARTIN ADDITION TO THE VILLAGE OF CANTON” FILED IN THE OFFICE OF THE CLERK OF ST. LAWRENCE COUNTY ON JUNE 8, 1956 IN ENVELOPE 12-A; THENCE, WESTERLY, ALONG THE NORTHERLY RIGHT OF WAY LINE OF BIRD STREET, BEING THE SOUTHERLY LINE OF LANDS OF NOW OR FORMERLY THE STATE OF NEW YORK COLLEGE OF TECHNOLOGY, HAVING A GRID BEARING OF SOUTH 85°25’01” WEST, A DISTANCE OF 1931.94 FEET TO THE A; THENCE, NORTH 04°34’59” WEST, A DISTANCE OF 1156.73 FEET TO THE POINT OF BEGINNING; THENCE, 1. SOUTH 89°50’57” WEST, A DISTANCE OF 372.49 FEET TO A POINT; THENCE, 2. NORTH 00°09’03” WEST, A DISTANCE OF 696.38 FEET TO A POINT; THENCE, 3. NORTH 89°50’57” EAST, A DISTANCE OF 248.79 FEET TO A POINT; THENCE, 4. SOUTH 85°44’35” EAST, A DISTANCE OF 168.96 FEET TO A POINT ON THE WESTERLY EDGE OF PAVEMENT OF CORNELL DRIVE; THENCE, 5. SOUTH 15°46’05” WEST, ALONG SAID WESTERLY EDGE OF PAVEMENT, A DISTANCE OF 290.64 FEET TO A POINT ; THENCE, 6. SOUTHERLY, ALONG SAID WESTERLY EDGE OF PAVEMENT, ALONG A CURVE TO THE LEFT, HAVING A CENTRAL ANGLE OF 36°22’48”,A RADIUS OF 408.84 FEET, AN ARC LENGTH OF 259.59 FEET, A CHORD BEARING OF SOUTH 01°27’20” EAST, AND A CHORD DISTANCE OF 255.26’ TO A POINT; THENCE, 7. CONTINUING SOUTHERLY, ALONG SAID WESTERLY EDGE OF PAVEMENT, ALONG A CURVE TO THE RIGHT, HAVING A CENTRAL ANGLE OF 23°25’44”, A RADIUS OF 373.19 FEET, AN ARC LENGTH OF 152.60, A CHORD BEARING OF SOUTH 11°14’16” EAST, AND A CHORD DISTANCE OF 151.54 FEET TO THE POINT OF BEGINNING, ENCOMPASSING 5.67 ACRES OF LAND, MORE OR LESS. Board Resolution -2- November 14, 2012