Dive Brief:
- The University of the Arts Tuesday sold one of its prized properties, the Arts Alliance building in Philadelphia’s Rittenhouse Square neighborhood, in a bankruptcy liquidation auction run by its Chapter 7 trustee.
- The Philadelphia-based nonprofit Curtis Institute of Music offered $7.6 million for the building at auction, topping the previous high bid from real estate developer Allan Domb. The bankruptcy judge overseeing UArts’ case approved the sale Wednesday.
- UArts’ Arts Bank building also sold in a separate auction for $2.7 million to the firm Quadro Bay, which beat out a bid from the nonprofit Lantern Theater Co. The sale still needs court approval.
Dive Insight:
The fate of a failed college’s property often draws interest from the surrounding community. In UArts’ case, the university — which shocked Philadelphia with its sudden closure last summer — occupied several historic buildings in the city’s downtown.
The case’s trustee, Alfred Giuliano, said previously in court papers that efforts to sell the properties involved 27,000 emails to prospective buyers and more than 150 confidentiality and nondisclosure agreements signed with prospects.
One of the key players so far has been nearby Temple University, which has enrolled hundreds of UArts’ former and prospective students. The university has bid $18 million for UArts’ Terra Hall, which sits on the university’s main South Broad Street campus.
A one-time hotel, Terra Hall served as UArts’ primary academic building. In a statement last week, Temple leadership described the possible acquisition as an “exciting prospect as it allows us to establish a prominent Temple presence in an iconic Philadelphia building.”
The public university added that buying Terra Hall would create “an opportunity for the university to be part of the continued revitalization of the Avenue of the Arts — an important cultural corridor — while opening the door for additional academic opportunities for our students.”
Temple also offered $6.2 million for the Arts Alliance building, which UArts acquired through a 2018 merger. The university was narrowly beaten out by Domb’s bid. However, Pennsylvania Attorney General Michelle Henry objected to the developer’s bid Monday, arguing that Temple should be given priority because of restrictions on the sale of charitable assets in state law and the building’s deed covenants. After the auction, the trustee deemed Temple the backup bidder should the sale to the Curtis Institute fail to close.
Domb reportedly withdrew from bidding during the bankruptcy auction.
“What attracted me to it was the potential of the building, how beautiful it is, the ability to use it for mostly arts, culture and possibly music,” the developer told WHYY, Philadelphia’s NPR affiliate. But he added of the winning bidder, “Curtis is a gem and I’m really pleased they got it.”
Until Wednesday, the Lantern Theater Co. led the bidding for UArts’ Arts Bank building on South Broad Street with an offer of nearly $1.8 million. Giuliano named the nonprofit as the backup buyer if the deal with auction winner Quadro Bay falls through.
As with the Arts Alliance building, the attorney general during a Wednesday hearing raised concerns selling Arts Bank to a for-profit company, WHYY reported. However, the building does not carry the same restrictive deed covenants as Arts Alliance.
UArts has several other buildings in its portfolio left to be sold, including the columned Dorrance Hamilton Hall and other facilities on its main campus. When it filed for bankruptcy in September, the university listed nine properties that it owned, valuing them collectively at $87.1 million. Terra Hall came in highest at $48.4 million.
