Land Grant or Land Grab?
Among other frustrating, though completely unsurprising, moves made by the University of Kentucky’s Board of Trustees last week, was the announcement that the university plans to buy up seven properties at the corner of Virginia Avenue and South Limestone in order to accommodate further campus expansion efforts. As reported by Linda Blackford of the Herald-Leader, UK plans to pay Norma Greely of Harp Properties a total of $1.8 million for the seven parcels — one of which is a vacant lot — where they plan to tear down existing structures in order to bury utilities (and maybe redevelop the lots into something else in the future). But, like other recent property-related news around town, there’s a lot more to this story than seven discrete parcels and a transaction for $1.8 million.
On the one hand, while the university plans to pay $1.8 million for the seven properties, according to the PVA the properties are cumulatively only worth about $1.2 million, meaning the university is actually overpaying by roughly $600,000. Of course, the ‘fair cash value’ recorded with the PVA is rarely an entirely accurate assessment (on the low side) of what a given property would sell for, the discrepancy is significant when you consider all of the other things $600,000 could be spent on at a time when UK is simultaneously privatizing crucial university functions and substantially raising student tuition. Given the price tag on these properties, it’s also significant that the cumulative assessed value for these seven properties has increased 71% just since 2013. While there’s a good chance that these property values increased because of the university’s ongoing expansion, the result is a windfall for Harp Properties — who acquired these properties at varying times over the last forty years for somewhere less than $350,000 in total — a kind of transfer payment from the university’s under-resourced students, faculty and staff to local landlords.
On the other hand, seven properties bought for $1.8 million is a drop in the proverbial bucket of UK’s broader activity in the field of real estate acquisition and development. In fact, this most recent addition represents just a 2% increase in the number of properties owned, just a 0.22% in the total value of properties owned, and a minuscule 0.087% increase in the total amount of acreage owned [1]. Yes, the University of Kentucky owns nearly 2,800 acres of land in over 300 discrete parcels of property, valued at over $800 million. Of those 300+ properties, roughly a third have been purchased in the last fifteen years. From the university’s investments in real estate ventures like the Coldstream Research Campus and privatized student housing to this perpetual outward creep into the surrounding residential neighborhoods (often resulting in the demolition of housing for parking lots), the latest planned purchase is nothing but a continuation of business-as-usual for our Commonwealth’s beloved flagship university-qua-landlord.
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[1] All numbers are approximate, as there is always the chance that our readings of PVA ownership records are incomplete. Properties associated with UK have a variety of listed owners and contact addresses, ranging from more straightforward registrations like “University of Kentucky” at 100 Administration Drive, to properties listed as owned by “Commonwealth of Kentucky FBO University of Kentucky” and registered everywhere from the state capitol building to Oldham Court and all kinds of places in between. So there’s obviously a chance we’re missing a few properties here or there. Of course, this would only further underscore our broader point about the expansiveness of the university’s real estate activity.
