Sudbury

Laurentian selects $273K real estate adviser bid to help restructuring university possibly sell assets

Laurentian has been granted court approval to hire a real estate adviser, as the creditor-protected Sudbury, Ont., university looks at ways to make money from its buildings and property holdings.

Cushman & Wakefield submits winning proposal for review

Laurentian University has been going though unprecedented restructuring in the wake of declaring financial insolvency on Feb. 1. The Sudbury, Ont. school is currently under creditor protection. (Yvon Theriault/Radio-Canada)

Laurentian has been granted court approval to hire a real estate adviser, as the creditor-protected Sudbury, Ont., university looks at ways to make money from its buildings and property holdings.

Laurentian is in the second phase of its insolvency under the Companies' Creditors Arrangement Act (CCAA), which allows it to operate while dealing with its financial situation. Since declaring insolvency Feb. 1, the northern university has been going though unprecedented restructuring that has resulted in controversial deep cuts to programs and staff.

After sending out a request for proposals, the university has retained Cushman & Wakefield, which has experience particularly in the post-secondary and public sectors. The firm will provide critical guidance and advice on developing a strategic plan for the school's real estate portfolio.

In its fifth report, the court-appointed monitor overseeing the process wrote in his report about the scope of the task.

"A significant portion of LU's assets is represented by its real estate portfolio, including the land and buildings on which the main campus sits as well as off-campus real estate," wrote Ernst & Young.

"Laurentian University (LU) has noted that with the academic programming changes and workforce changes recently implemented in connection with the CCAA proceedings, there may be opportunities to modify its utilization of space within various buildings and/or opportunities to monetize certain assets. To that end, LU determined that it was appropriate to engage a real estate adviser to undertake a current review of its real estate portfolio." 

Cushman & Wakefield was one of four potential candidates who were interviewed.

The monitor's report also describes what the firm's tasks will include:

  • Identifying potential strategies to monetize redundant or potentially excess assets in the real estate portfolio.
  • Review third-party leases within the real estate portfolio.
  • Consider other strategies to make money from real estate assets.
  • Make recommendations on optimizing space.
  • Provide recommendations for future strategies and next steps.

Laurentian seeks court backing of its choice

Although not required to obtain court approval, lawyers for Laurentian went before Justice Geoffrey Morawetz on Monday.

D.J. Miller told the judge the review is not simply a liquidation.

"This is not simply looking at selling assets for the sake of selling assets," she said. "We do not know what the outcome of the real estate review may be. It may be that there is land or buildings that are determined to be surplus that may fall into that category that can be sold. It may be the result of the review that there are not. It may be that the review determines that there are ways to better utilize space, and that will be reviewed and considered. It may be there are ways to monetize assets without selling them."

Lawyers for Laurentian asked that financial details of the agreement with Cushman & Wakefield remain confidential under a sealing order, to avoid showing how the firm calculates its fees.

However, Morawetz questioned whether that was necessary.

"I went through the confidential appendix, and I have a hard time seeing what is commercially sensitive in those materials."

Laurentian's lawyers then conferred with their client, and agreed to narrow the focus of what will remain confidential and release information on the total fees and the total hours of the company's bid.

Cost of review revealed

A redacted version of the agreement can be found in the appendix here.

It shows the total cost of the review at $273,324.

Tom Fenske, president of the Laurentian University Staff Association, believes the review should do more than provide guidance, and it should give solutions.

"You know, they talked about wanting to sell off less, more monetizing, more renting," said Fenske. "But they don't follow it up with, 'Here's who we think could find themselves in the building, or here's the plan where we think it might work.'"

He also said he's frustrated with the lawyer's request to seal the real estate adviser's bid.

"It should be open and transparent, and Judge Morawetz and others asking for reasons why things should be sealed doesn't make sense. Why isn't all of this open? Taxpayers have a right to see how their money is being spent."

 

ABOUT THE AUTHOR

Kate Rutherford

Reporter/Editor

Kate Rutherford is a CBC newsreader and reporter in Sudbury. She reaches across northern Ontario to connect with people and their stories. She has worked as a journalist in Saint John, N.B and calls Halifax, N.S. home.

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