MSU Letter of Intent

Letter of Intent
This Letter of Intent (LOI) is made on this 20th day of August 2105 between Teikyo Loretto Heights
University d/b/a Colorado Heights University ("CHU"), a Colorado nonprofit corporation having its
principal place of business at 3001 South Federal Boulevard, Denver, Colorado, 80236 and Metropolitan
State University of Denver ("MSU Denver"), a Colorado public university having its principal place of
business at 890 Auraria Parkway, Denver, Colorado, 80204.
BACKGROUND:
CHU is the owner and operator of the former Loretto Heights campus located in Southwest Denver. The
campus was acquired by CHU in 1989 and has been continuously operated by an institution of higher
education since 1918.
CHU offers ESL instruction and Bachelors' and Masters' degrees in International Business to a small
globally diverse student body on the campus.
MSU Denver was founded 50 years ago in 1965 and has become a leader in providing accessible,
affordable and quality education to a diverse traditional and non-traditional student population of over
22,000.
CHU and MSU Denver entered into a Memorandum of Understanding in 2013 to assist CHU
undergraduate business students in transferring to MSU Denver to complete their degrees.
CHU now desires to relinquish its ownership of the developed part of the campus and continue its ESL
instruction as well as expand it to cover the needs of MSU. CHU's ESL programs are accredited
contingent on the accreditation of its degree programs.
CHU intends to maintain its degree programs on the current campus for the foreseeable future and use
its best efforts to grow its degree programs, outside of its Denver campus, in key U.S. cities and
international locations.
CHU has identified MSU Denver as a potential successor to its interests in the developed part of the
campus given the similarity in mission and values of the two universities.
CHU and MSU Denver intend to explore options for the transfer of the developed portion of the campus
from CHU to MSU Denver.
CHU and MSU Denver intend to explore options for cooperation in the sale of the undeveloped portion
of the campus for the purposes of developing a business incubator and/or research park consistent with
their present missions and key academic clusters.
CHU and MSU Denver intend to explore options for the development of academic programs to be
delivered by MSU Denver that honor CHU's original mission to educate a globally diverse student
population and to expose neighboring residents of Southwest Denver to such students and subjects.
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CHU intends to use its best efforts to refer its ESL students and those of its international academic
partners to MSU Denver to increase its international student body and to further CHU's original mission
of maintaining an international academic community within the CHU neighborhood. The ultimate goal is
for MSU and CHU to work together to provide for either transfer of existing CHU degree students into
MSU or completion of CHU's degree programs in a reasonable timeframe.
CHU shall work to facilitate the joint development of a global consortium of schools around the globe
and to develop standardized curriculum.
1.
NON-BINDING: This LOI is non-binding upon the parties and is intended to set forth the terms
and conditions to which the parties may agree for a future transfer of ownership.
2.
TRANSACTION DESCRIPTION:
Transfer of Real Estate: A gift of the majority of the main campus real estate, buildings, and
improvements, located at 3001 South Federal Boulevard, shall be made by CHU to MSU Denver.
The Colorado Heights University campus totals 75.92 acres of land on two adjoining parcels;
however, the real estate to be conveyed to MSU shall not include the following excluded
properties:
a. Excluded Real Estate-The excluded real estate consists of approximately 18 acres of
unimproved excess land that is part of the two parcels comprising the main CHU
campus. The excess land has not been legally subdivided and is currently vacant with
natural grasses and mature trees covering a majority of the site. The excess land
represents the western portion of both parcels of Colorado Heights University, with
South Irving Street acting as its western boundary. This will likely require a formal site
survey, subdivision, and approval by the City and County of Denver.
b. Excluded Water Rights- CHU shall retain ownership of all of its 2 and 22/40's shares of
the 200 shares outstanding of the Agricultural Ditch and Reservoir Company for use in
the development of the excluded real estate. Some of that water is currently being
used to irrigate parts of the campus. There also exist well rights to drill into the aquifers
underlying the campus, which shall be transferred with the real estate and 2 existing
wells.
CHU will lease the water rights to MSU on an annual basis, on commercially reasonable
terms until such time as CHU determines how much is needed for the development of
the 18 acres.
3. TRANSFER OF FURNITURE, FIXTURES, ART AND EQUIPMENT: In addition to the transfer of real
estate, CHU shall transfer all fixtures, furniture, and equipment to MSU Denver. These assets shall
not include any furniture and equipment necessary for CHU's use in Pancratia Hall for its own
programs. Campus vehicles and grounds equipment, other than 15 passenger vans, shall also be
transferred to MSU Denver. CHU will retain ownership of all art, except for the stained glass. The
art consists of paintings, sculpture, pianos and organs.
4. ASSIGNMENT AND ASSUMPTION OF LEASES: The transfer of real estate is subject to MSU
Denver assuming CHU's written and oral agreements relating to the occupancy of space and
ancillary faculties in effect as of the closing date. These agreements in include, but are not limited
to the following:
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c.
DPS Ground lease - This ground lease for involves approx. 4 acres of land, together
with an option for DPS to lease an additional two acres, on real estate adjacent to its
existing lease. The term of the lease is for 20 years, with six five year renewals. Any
transfer between CHU and MSU Denver of the developed property is subject to
leasehold conditions concerning first offer options.
d. DPS Cafeteria Lease-This lease expired on 6/30/2015 and CHU is currently in
negotiations with DPS for a one year renewal, with an ability of the Landlord to
terminate the lease 12/31/15. This can be discussed with DPS after the LOI has been
signed.
e. DPS/Summit Middle School Lease-Comprising approx. 11,000 sq. ft. located on the
ground floor of the Machebeuf Student Center and Cafeteria Building.
f. DPS Southwest Early College - Classroom lease in Pancratia Hall expiring on 7 /31/2016
comprising approx. 30,000 sq. ft. located on the first two floors of the building.
g. Sprint/Nextel Cellular Antenna Lease - This lease involves the lease of roof-top space
on the Bonfils Theater Building, including the location of an equipment building
immediately adjacent to the building.
h. City and County of Denver Emergency Communications lease - This lease involves the
lease of roof-top space on the Bonfils Theater Building, including the location of an
equipment building immediately adjacent to the building.
i. Other Agreements - Various outside event agreements for use of the theater, chapel,
and dining hall to outside groups to be appended to this LOI.
5. PANCRATIA HALL LEASE: MSU Denver shall leaseback the Pancratia Hall building to CHU. In
case MSU Denver has used up its space within the CHU campus and CHU has space available in its
lease space in Pancratia Hall, CHU and MSU Denver shall mutually agree on sharing available space
in Pancratia Hall. The building consists of 65,740 total sq. ft. of classroom and dormitory space, for
CHU's use in conducting its ESL, undergraduate and graduate educational programs subject to the
following terms:
Term - 20 years with two 5 year renewal options.
Rent - The annual rent shall be $100.00.
I. Adequate Parking - MSU Denver shall be responsible for providing an adequate number
parking spaces for CHU students and staff. Allocation of costs will need to be
determined.
m. Utilities, Repairs, Insurance, and Grounds/Custodial Services - Allocation of cost will
need to be determined.
n. Cafeteria Services -Allocation of cost and staffing will need to be determined
o. Ancillary Services - CHU students shall have access to ancillary facilities such as the
student union, athletic fields and swimming pool/weight room so long as such facilities
continue to exist. Allocation of costs and staffing will need to be determined.
p. Use of library - CHU students and faculty shall be allowed the use of the Bonfils Library
at no cost. Allocation of cost and staffing will need to be determined.
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6. ENGLISH AS A SECOND LANGUAGE PROGRAM: MSU Denver shall grant CHU the exclusive right
to offer ESL programs to MSU Denver students at both the Auraria and CHU campuses.
7. COLLABORATIVE PROGRAMS: CHU and MSU Denver shall jointly review and develop
collaborative programs in the following areas that may be delivered on the campus by MSU Denver,
with the exception of ESL instruction, to existing MSU Denver students as well as students referred
by CHU:
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Metropolitan State University of Denver
Colorado Heights University
•
Allied Health and Nursing
•
ESL
•
Social Work
•
Global Business
•
•
Teacher Education
•
•
Technology
Other
International Hospitality
8. BUSINESS INCUBATOR/RESEARCH PARK: The parties shall also collaborate and cooperate with
each other, and other stakeholders in the investigation and possible establishment of an
incubator/research park on the campus to foster the development of new companies with products
or services consistent with the key academic areas of MSU Denver and CHU for the benefit to the
State of Colorado and the City and County of Denver.
9. DUE DILLIGENCE PERIOD AND CONFIDENTIALITY: In order to determine if transfer of
ownership of the CHU campus is both advisable and feasible for MSU Denver, the University must
conduct certain due diligence regarding the involved real estate, facilities, and projected operating
costs. The University has already executed a confidentiality agreement which is incorporated herein
by reference. A period of due diligence will commence on August 20, 2015 and shall end no later
than December 31, 2015 unless extended by mutual agreement of the parties. It is essential to the
due diligence of MSU Denver that MSU Denver staff and/or its consultants are allowed to perform a
detailed inspection of the campus, any existing facilities, including the DPS facility, and to examine
records concerning campus maintenance and safety costs over a reasonable period of years.
Moreover, the future academic uses of the CHU campus by MSU Denver is of critical concern, so
information exchange and dialogue between key academic personnel for both universities is
essential during this due diligence period as well.
10. CLOSING DATE: The intent of the parties is to close the transaction on or before July 1, 2016. In
the event that MSU Denver is unable to obtain all necessary approvals on or before the closing date,
the date may be extended with the approval of both parties. In the event of a delayed closing, MSU
shall reimburse CHU for all necessary and ongoing costs of operating the CHU facility until the date
of closing as noted in Paragraph 12 below.
11. AGREEMENT SUBJECT TO THE FOLLOWING APPROVALS:
CHU THIRD PARTY APPROVALS:
q.
r.
s.
t.
Accrediting Council of Independent Colleges and Schools
U.S. Department of Education
SEVIS
Other
MSU THIRD PARTY APPROVALS:
u.
v.
Board of Trustees
Higher Learning Commission
w. Other
12. OPERATING COSTS: Based on the last twelve months the operating costs, including capitalized
equipment maintenance and repairs, has cost CHU approximately $275,000 per month.
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13. ZONING: The CHU Campus is zoned CMP-El2 . Use of the 18 acres will determine what the new
zoning designation would have to be, and re-zoning of the retained parcel will be the sole
responsibility of CHU.
14. DR. SHOICHI OKINAGA: MSU Denver will permit CHU to erect a statue of Dr. Okinaga to be
placed in a highly visible location on the campus and to rename one of the existing buildings on the
campus to his name.
Signatures:
Ryuichiro "Drew" lwanami
Chair of the Executive Committee
Teikyo Loretto Heights University d/b/a Colorado Heights University
Stephen M. Jordan
President
Metropolitan State University of Denver
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