The Fulmont College Association — the nonprofit student housing arm of Fulton-Montgomery Community College — on Thursday petitioned Fulton County Supreme Court for permission to sell its three dormitory halls for $1.8 million to Amsterdam-based Tryon Enterprises LLC, owned by David P. Huckans.
According to the court petition filing, Tryon Enterprises plans to convert the 4.5-acre property on County Highway 142 to market-rate housing, which will be made available primarily to FMCC students, “in accordance with the use restriction contained in the Local Laws,” if the court approves the sale.
FMCC President Greg Truckenmiller said Tryon Enterprises was the successful bidder in a process that included five potential purchasers that were pre-approved by the U.S. Department of Agriculture and the New York state Attorney General’s office, but he would not disclose the names of the other bidders.
“The FCA put the housing back up for sale after the last series of events last year,” Truckenmiller said. “This was back around the end of October, and over the course of the next several months there was a review by the USDA and the Attorney General’s office of those offers, and then there was a subsequent signing of a purchase sale agreement with the approved buyer, and we are now, once again, at the point of asking the Supreme Court to approve that sale.”
The sale of the FMCC dorm halls has been complicated by several factors. The FCA is the nonprofit auxiliary arm of the college tasked with performing operations that the school is prohibited by state law from performing on its own — such as owning and operating dorm buildings, and the college’s cafeteria service. State law requires court approval for the sale of assets owned by nonprofits, to ensure the sale is in the interest of the members of the nonprofit, which in the case of the FCA, are the students, faculty and administration of FMCC.
The FCA came to own the three dormitory halls after the USDA loaned the nonprofit $11.3 million in 2010 for the purpose of purchasing and renovating the 1980s-vintage Fulton Hall and Montgomery Hall dorm buildings for $4 million, and then in 2012 building the 144-bed, coed Raider Hall dorm for $7.1 million.
The dorm hall expansion seemed like a good idea at the time, as a means of housing international students who pay double tuition at the college. In 2016. FMCC had the highest concentration of international student enrollment among all of New York’s community colleges at 5.8% of total enrollment, reaching a high of approximately 160 students.
But after the election of former President Donald Trump in 2016 the federal government began approving significantly fewer foreign F-1 student visas, which corresponded to an even steeper decline in occupancy at FMCC’s dorm halls.
“Over the past several years, the College has experienced a steady decline in occupancy at the property,” the FCA’s Thursday court filing reads. “For the 2017-18 school year, the property had a 78.3% occupancy rate, which decreased to 58.2% for the 2018-19 school year, and then decreased further to 48.8% for the 2019-2020 school year. Since the 2015-16 school year, the college has seen a total decline in student housing occupancy of 53.5%. During this same period of time, the college has seen a corresponding decline in enrollment of 35%. Currently the property has an occupancy rate of 0%. No rooms have been offered by the corporation for the 2021-2022 academic year as the property has been marketed for sale.”
Truckenmiller, who is also co-chair of the FCA board of directors, said that FCA has run out of money to operate the dorm halls and does not have enough money left or any cash flow to make the annual debt service payments of $770,000 required by the USDA loan, which is what’s primarily motivating the organization to try to sell the property.
The USDA has agreed to forgive the remaining $10 million owed by the FCA on the loan in exchange for the FCA’s proceeds from selling the dorms — less a 5.5% real estate broker commission paid to Pyramid Brokerage Company of Albany — and final approval over the buyer.
FIRST ATTEMPT TO SELL DORM HALLS
The proposed sale price of $1.8 million to Tryon Enterprises is equal to the most recent appraisal of the property, conducted by Bruce R. Bauer of Albany-based Bauer Appraisal Group in May 2020.
The sales price is also about $700,000 higher than the USDA and the FCA were willing to sell the property for in April 2021. when the FCA first attempted to petition the court for permission to sell the property for $1.1 million to Amsterdam-based Dan Vann Properties LLC, owned by former Amsterdam Common Council member Dan Roth.
Roth had also planned to convert the dorms to market-rate housing, with a preference for student renters, but that sales attempt was withdrawn after it was challenged in court on a number of grounds, including that the undisclosed sole real estate broker for the deal was past FMCC board chairman Michael Sampone, and the multiple listing service the FCA’s real estate broker, Pyramid Brokerage Company of Albany, claimed to have used to market the property “does not appear to actually exist.”
The first sales attempt was challenged by Teresa Monroe, of the Monroe Law firm in Albany, on behalf of her clients Bianca Alicea of Amsterdam, a nursing student at FMCC since 2017, and local rental property owner William Petrosino of Amsterdam.
Monroe alleged Pyramid had not done its due diligence in marketing the property. She also called into question the FCA’s sales contract with Pyramid, which indicated the broker would be paid a $77,000 fee irrespective of whether or not the court approved the sale to Dan Vann Properties, which Monroe argued raises, “grave concerns about Fulmont’s due diligence in dealing with the broker.”
The FCA ultimately withdrew its first petition to sell the dorms after the U.S. Attorney’s Office for the Northern District of New York filed a notice with Fulton County Supreme Court indicating it would be sending Assistant U.S. Attorney John D. Hoggan Jr. to a court conference on the matter that had been scheduled for April 30, 2021.
Truckenmiller has said that after the first attempt to sell the property was withdrawn, the FCA refused to pay the $77,000 fee promised to Pyramid Brokerage Company, but the nonprofit did continue to use Pyramid for the second sales process, with the fee slightly reduced from 7% to 5.5%.
Monroe, in her court challenge, also said the FCA board of directors improperly approved the sale to Dan Vann Properties.
“According to Fulmont’s resolution, just seven directors attended the meeting for the vote on the sale, one short of a quorum and not enough to give the board the authority to vote,” she wrote.
She also argued the FCA board when the sale was approved didn’t have the requisite number of student representatives, only two of the required six, to operate by its own corporate bylaws.
Truckenmiller on Thursday said all of the technical problems with the FCA board vote to approve the sale of the property raised by Monroe have been fixed for the second sales attempt.
According to the court petition filed Thursday, during the May 3 meeting of the FCA board of directors, 10 of the 14 members eligible to vote on the transaction were present and voted, and one submitted a written proxy in accordance with the bylaws. All 11 votes were in favor of the sale of the property to Tryon Enterprises LLC.
“Everything was done so there are no technical issues that could be raised by anybody,” Truckenmiller said. “We had a full board. We had the requisite number of votes for the sale etc. The sales process was vetted by the USDA and the [state Attorney General] before we started this time. So, everybody knew what was going to happen, and how it was going to happen, and nobody should be able to raise an objection, and certainly the approval process we’ve gone through since then has demonstrated all of the appropriate steps were followed.”
SECOND ATTEMPT TO SELL DORMS
The FCA’s second petition to sell the property, filed Thursday, included a detailed account of the efforts made by the Pyramid Brokerage Company to market the property, a plan that was also pre-approved by the USDA and the state Attorney General’s office.
According to the filing Pyramid’s efforts to market the property included multiple ads placed in the Wall Street Journal website, the New York Real Estate Journal website, and for the property to be listed on the following multiple listing services: CIREB; Crexi Pro, CoStar; Myelisting.com, Pyramid Brokerage webpage, Cushman & Wakefield webpage, Showcase, Brevitas, RealNex, 42 Floors, New York State Association of Realtors, Greater Capital District Association of Realtors, National Association of Realtors, CityFeet, Property Shark, Realtor.com; Commercial Café; and social media sites such as Facebook, Twitter and LinkedIn.
Roth said he was one of the five bidders for the second sales process. He said he offered more money this time, but in January he was told he didn’t win the bid. He said he’s not sure who else bid on the property.
“We put an extensive proposal together, with engineer renderings, drawings, I did financial data, energy consumption plans,” he said. “It was probably a 50-page proposal we put in with a plan in place to make it a successful project, but unfortunately I think there were delays in process of acceptance. I don’t know whether it was at the college level, state level or federal level. I think there were a lot of moving parts of this process of that deal.”
Roth said when he was told he didn’t win the bidding process it was “monetary value that was selected, it had nothing to do with use or functionality of the project.”
“I wouldn’t say I was significantly less than [$1.8 million], but I was less than that,” he said.
Roth described what happened with his company’s first attempt to purchase the property in 2021.
“What took place was, in the middle of COVID, I received a phone call from a listing broker with Cushman & Wakefield, who said, ‘Hey, would you be of interest in a dormitory complex?'” Roth said. “So, this was in the middle of COVID, and our country was shut down, our jobs were shut down, and I said ‘I would be interested in looking at the opportunity, if it presented itself’, and then about three months later I get a phone call — in the middle of COVID, while we’re still heavily restricted, schools were not open — to view the property. I went to the property, and the brokers, by law, were not even able to go to the property, because at that time Gov. Cuomo had [a COVID mandate against in-person real estate sales tours in place], so I had to meet a maintenance man, who walked me through the facility.”
Roth said he made his first offer of $1.1 million based on the amount of renovations that would need to be done to the 144-room co-ed Raider Hall dorm, where the units lack kitchens.
He said he was “blindsided” by the court objection filed by Petrosino and Monroe. He said some elements of their objections were not correct, from his point of view.
“Mike Sampone was not even involved, I never translated to communicate with Mike Sampone, the broker was Jeffrey D’Amore,” Roth said.
Roth said he has no knowledge of why Pyramid Brokerage Company had claimed to have marketed the property through a multiple listing service that doesn’t exist in Fulton County.
After the $77,000 fee was highlighted by Monroe’s court objection, Truckenmiller referred questions about the fee to Roth.
“I believe the FCA has ironed that out, and I stand by my statement,” Truckenmiller said in May 2021. “That’s a question for Dan Vann [Properties].”
Roth on Friday said he doesn’t believe the $77,000 fee Pyramid was to have been paid, regardless of the success of the sale, was at all unusual.
“That happens all of the time. It’s a formality,” he said. “That was on their side, and I have no idea. Nobody asked me to pay it.”
Huckans, the owner of Tryon Enterprises LLC, did not respond to a social media message seeking comment.
Roth said he knows of Huckans primarily as a mortgage broker, but he wishes him success with the property.
“This process has been going on for the last 15 months,” Roth said. “It’s been stressful. It’s been emotional, but structurally that’s business, and the decision was made that we weren’t recognized as the winner, and we wish the school and the successful bidder all success.”
FUTURE OF FMCC STUDENT HOUSING
Truckenmiller said FMCC’s dormitory halls were privately owned for decades before the FCA bought them in 2010 with the USDA loan, and he’s hopeful the college will have a similarly successful partnership with the new owner of the property if the court approves the sale.
“The conversations that we have had with Tryon, so far, have been about student housing,” Truckenmiller said. “I think it will look very much like it looked before when the FCA owned it … similar to what you might see at [SUNY] Schenectady or Hudson Valley [Community College] where they have adjacent student housing that is owned by a private group.”
Truckenmiller said he believes the best case scenario for the dorm hall sale is that FMCC once again has campus housing available in the fall of 2022.
“This was a new process for all of us, disposing of an asset this large, so we definitely learned how to do that, and, hopefully, we won’t have to do it again,” he said. “Housing is still very important to us in terms of being able to attract international students and our athletic programs, a number of our student athletes come from out of the area, and for us to be competitive, we need housing that is good and safe and convenient to campus, and it helps us in that international area. Once upon a time we were one of the only players in the community college market for international students, certainly in New York, but that’s become a much more crowded market now for a much smaller group of international students. So, it’s incredibly important for us to remain a viable destination for those international students with that housing next to campus.”