A&G and B6 Managing Sale of College of New Rochelle

NEW YORK CITY—With the College of New Rochelle closing, and the final day of classes on August 10, the 15.6-acre, 20-building campus with more than 425,000 square feet of buildings is up for sale. The school has retained A&G Realty Partners and B6 Real Estate Advisors to manage the sale of its main campus in Westchester County, NY. The firms are currently accepting bids for the campus that’s in the Residence Park neighborhood of New Rochelle.

Located 15 miles from Manhattan, with the address of 29 Castle Place, the campus surrounds a historic 19th century castle. It features educational, recreational and boarding facilities. The athletic center includes an NCAA competition-sized swimming pool and basketball court. The campus has computer and photography labs, a TV production studio, a 200,000 volume state-of-the-art library, a student center, a life sciences building with multiple laboratories, four residence halls and a center for nursing.

“Properties such as this rarely become available and offer a one-of-a-kind opportunity to leverage an established, turnkey educational campus for a variety of uses,” says Jeff Hubbard, executive managing director of B6. The campus was built on the land of a 19th century hotelier Simeon Leland who built the castle as his summer home. The complex is walking distance to both the Long Island Sound and downtown New Rochelle.

“There has been significant interest since the college first announced its closing and our team has created a structured sale process that will streamline the transaction for both the buyers and the college,” adds Hubbard.

The college’s website explains that in August 2016, the executive committee of the board of trustees learned of “significant unmet financial obligations.” The institution had unknown debts which included $20 million in state and federal payroll taxes that had not been filed or paid beginning with the quarter starting September 2014 through the quarter ending June 30, 2016. An investigation also revealed significant vendor debts, depletion of endowment assets and drawing down on lines of credit.

The website states that the board discovered the irregularities after the controller retired in July 2016, following 37 years of working at the college.

On March 28, 2019, Manhattan US attorney Geoffrey S. Berman issued a release stating the former controller Keith Borge pleaded guilty to charges of securities fraud and failure to pay federal payroll taxes. The US Attorney for the Southern District of New York, the US Postal Inspection Service and the New York field office of the Internal Revenue Service filed the criminal case in federal court. US District Judge Vincent Briccetti was originally scheduled to sentence Borge on July 11. LoHud’s Rockland/Westchester Journal News subsequently reported that his sentencing date has been postponed to August 28.

The US Securities and Exchange Commission also filed a civil lawsuit against Borge in US District Court in White Plains, according to the release.

The College of New Rochelle’s website states after trying to stabilize short-term finances, it concluded that it lacked the resources to go forward. The school subsequently reached an agreement with Mercy College, which accepted the College of New Rochelle students without an increase to their current tuition. Both schools are private, Catholic institutions.

“The primary goal underlying our mutual agreement with Mercy College has been to provide maximum protection to students by providing a clear path forward to complete their degrees,” says Dr. William Latimer, president of the College of New Rochelle. With the approximately 2,700 remaining students, more than 900 graduated in the spring and 200 more will graduate in August. Nearly 1,000 students have registered to continue at Mercy College in the fall.

The College of New Rochelle is an institution that has enriched the college experience of thousands of students in Westchester County for over 110 years, says Bert Weil of Getzler Henrich, the chief restructuring officer for the college. “Selling the campus is a necessary step to maximize the recovery for all stakeholders.”

Emilio Amendola, co-founder and co-president of A&G Realty, describes the campus as one of the most unique redevelopment opportunities in Westchester County. “It is an operating college and ideal for continued use as an educational institution. Alternatively, it could be redeveloped into residential or other appropriate uses through collaboration with the city government and New Rochelle community,” he says.

The property is zoned R2-7 residential which permits residential and educational uses. If sold to a developer, the City of New Rochelle would consider proposals for additional uses such as technology, research & development, healthcare, senior housing and residential condominiums.

A&G has extensive experience with both Chapter 11 and non-Chapter 11 dispositions. Their client roster includes Sports Authority, ITT Technical Institute, Briarcliff College, A&P, Office Depot and Radio Shack. B6 uses a territory network model, emphasizing sub-market information.