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Bruce Farm Sold
by Matt Roach
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Bruce House
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Hay Barn
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The Bruce Farm, a large piece of property owned by Mars Hill College, is under contract to be sold.
The 800-acre farm was contracted on July 23 for $4 million, which is equivalent to $5000 per acre. The sale however is not final. "Earnest money has been paid and the final closing date is October 22, 2002," said Chuck Williams, vice president for finance.
Interim President Dan Lunsford told staff members recently that the pending sale is good news, considering that "the budget is built on the premise of having an offer with a deposit in hand and a closing date set."
Well over a year ago it was decided by the Board of Trustees that the Bruce Farm was to be sold. Located approximately 4 miles north of Mars Hill College on Bruce Street, it is 800 acres of farmland, wooded forests, and residential buildings. One its most noted buildings is a log structure built to host conferences of the Hester Center for Peace and Justice which was endowed by a General Hester shortly after his return from World War II. There are a couple of mountain streams that trickle their way through the property and the remnants of a small dam as well. The farm also is home to many different species of plants and animals.
"The Bruce Farm is a large piece of property that we [the college] attained through a life income trust arrangement (with the late Mildred Pendergrass)," said Lunsford during a staff meeting in late August.
One of the most common misconceptions concerning the Bruce Farm is that the college was given that property for free. "(Ms. Pendergrass) gave that to the college if we paid (her) a life income (about 18 years). And so we did that knowing full well when we attained that property it would be worth more than we invested in it," said Lunsford. "It wasn't a 100% gift, that's the important thing to know, we invested money into that property."
Due to a tremendous debt and major budget issues, the sale of Bruce Farm was inevitable, he said.
The farm itself was appraised by a bank at $2.5 million, while an independent appraisal for the school valued the land at 3.2 million dollars.
The College itself tried independently to sell the property, but after no success, on July 15 the College allowed Mountain Home Properties of Hot Springs to list the property. Mountain Home Properties was selected "through the Real Estate Foundation Board interviewing three candidates," said Williams. The other two agents were undisclosed.
Almost immediately the property had a couple of bids. One such bid came from McKee Properties out of Cashiers, NC. The offer on the table was $4000 per acre, which would be equivalent to 3.2 million dollars for the full 800-acre farm. That price is exactly what the land was appraised at. Steve Hodge, who represented McKee Properties in the bidding process said, "Our bid was not accepted based on more favorable terms. That basically means that somebody had submitted a better offer."
According to Vice President Williams the $4 million offer came from The Sugar Camp Group, whose location is unknown. "And that's a lot of money, but we have an outstanding debt that we have drawn against for the college, and that is the payment. We have borrowed to pay salaries and benefits against that asset," said Lunsford.
The college anticipates a net gain of $700,000 after paying off past debts with the Bruce Farm money. "The original plan was to put any remaining proceeds into a cash flow fund," said Williams. Unfortunately that $700,000 is not enough to cover the budget woes that have cursed Mars Hill College this year. Presently the debt has risen by almost $400,000. That is not counting a $300,000 loss of projected revenue, because 20 deposit-paying students decided not to return to Mars Hill College.
Currently the lawyers are working on paperwork and signing over the property. The sale will officially be final when the Mars Hill College board of trustees votes to sell the property.
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