Western Michigan University will move forward with purchasing the Newell Rubbermaid building on WMU’s Parkview campus after the WMU Board of Trustees approved the purchase during a virtual special session on March 10.
Jason DeVries of Faraday Defense Corporation spoke in opposition to the purchase, saying his company was in the final stages of buying the building until a few weeks ago, when Faraday was ultimately made aware that WMU had a right of first refusal on the property.
A right of first refusal is a property law that allows a person or entity the right to m match any offer on a property when it enters the market.
Vice President for Business and Finance Jan Van Der Kley said WMU originally owned the property and sold it to economic development agency Southwest Michigan First years ago. Though SWMF ultimately sold the building, Van Der Kley said the Right of First Refusal was passed down to WMU with each sale.
DeVries said he and his colleagues have been negotiating the sale for months, but weren't made aware of WMU's right of first refusal on the property until a few weeks ago.
During the special session, Van Der Kley said the university wasn't made aware that the building had been put on the market, and wasn't notified of its right of first refusal until February 14 "very early in the morning".
DeVries asked the board to reconsider their purchase, and said Faraday had invested significant capital into the sale and was planning to close on March 15.
DeVries said if the deal falls thought it would create a substantial tax liability for the company and its partners.
Earlier in the month, WMU President Russ Kavalhuna recommended the approval of the purchase as a replacement for the university's over 100-year old physical plant.
The physical plant currently houses facilities management operations, and Kavalhuna said the Newell Rubbermaid building would act as a good replacement.
"The current Physical Plant, built in 1921, has $7.6 million in deferred maintenance, significant accessibility concerns and aging structures. Our campus master plan has identified it for decommissioning and demolition. In addition, the Campus Services Building at 1201 Oliver St. also carries a substantial maintenance backlog. The 3300 Research Way building is significantly newer, has no deferred-maintenance backlog, comparable operating costs, and it will come with high‑quality furniture and equipment included in the sale," Kavalhuna said in the statement.
After hearing from DeVries, a WMU alum, trustees raised questions about how the sale had progressed so far without the knowledge of the university. Trustee Jon Hoadley said the existence of a right of first refusal should be made more clear.
“Now might be a good time to remind our other folks that we have right of first refusal agreements with – to just remind them if this piece, because it seems frustrating to me that a potential land deal reached this point before one of the buyers was even made aware of it," Hoadley said.
DeVries also raised questions about how the sale would factor into the university's campus master plan, which describes the campus as "a major hub for economic growth including corporate partners and university partners."
"The [Business Technology and Research Park]'s own website and covenant documents say its focus is on mutually beneficial relationships between resident businesses and the university, recruiting firms in advanced engineering, life sciences and information technology. Faraday fits every one of those categories," DeVries said. "We specialize in mechanical, structural and electrical engineering. Our products are direct needs in the IT space."
After fielding questions from fellow trustees, Van Der Kley said outside council had reviewed the master plan and right of first refusal and determined it was within WMU's right to put in an offer.
Ultimately, the board voted unanimously to approve the purchase of the building, listed at a price of $6 million. A statement from Kavalhuna said the university plans to shift all facilities management to the building, and is exploring plans to build locker rooms for a nearby soccer field.
Before the vote was taken, Kavalhuna expressed disappointment over the fact that the purchase approval would result in an unfavorable outcome for DeVries.
"[DeVries] does own two properties at the park right now. He does employ WMU students, and he's long vested in our community. And so what you can rest assured about, trustees, is that while I respect and understand that Mr. DeVries might not have the best taste in his mouth right now, his alma mater still is proud of him and will reach out to him directly to make sure mitigation of that taste in the mouth can occur," Kavalhuna said.
