Tax-Exempt Bonds and the Purchase of Land from the Archdiocese

Boston College completed the final portion of the purchase of the St. John's Seminary lands and buildings (except for St. John's Hall) from the Archdiocese of Boston in August 2007 for $65 million.

Where did the actual cash for that transaction come from?

At Tuesday night's meeting of the BC Task Force, while discussing a broader issue of the credit crunch and how it might apply to the 10-year construction plan BC has proposed, I made a statement that BC was given authority in August 2007 to issue $177 million in tax-exempt bonds, some of which was to go to the purchase of that property from the Archdiocese. I didn't think it was a controversial statement.

BC's Director of Public Affairs, Jack Dunn, strongly disagreed, saying that "the notion that BC used public money to purchase the archdiocese land is inaccurate."

In so doing, Dunn made a statement in direct contradiction with one from the Massachusetts Development Finance Agency ("MassDevelopment").

The press release put out by MassDevelopment on August 13, 2007, announcing that the agency was granting approval for BC to issue $176,980,000 in tax-exempt bonds, was clear in stating that BC would be using the money to purchase the remaining portion of the archdiocese land:

The school will use proceeds from a tax-exempt bond to finance several construction projects and purchase 18 acres of land and buildings from the Roman Catholic Archdiocese’s former Brighton headquarters. Projects include the construction of three new academic buildings, a recreation complex and student center on the school’s Chestnut Hill campus.

Sounds rather declarative to me.

What's more, the press release, issued on MassDevelopment letterhead, listed two contacts for further information: Alicia Tildsley of MassDevelopment; and Jack Dunn of BC. Dunn's name was right on the top of the release.

The difference between Dunn's statement and the MassDevelopment press release raises the question: Did BC actually spend the money from the bonds in the way that MassDevelopment last year thought they would spend it?


Image of tax-exempt bonds by Paul Levy at the Running a Hospital blog.

Boston College Gets $177 million in Tax-Exempt Bond Financing

The Boston Globe (boston.com) reports that Boston College has been approved for a $177 million, tax-exempt bond financing package for land purchase and building construction:

MassDevelopment, the state's finance and development authority, announced today a $177 million financing package for Boston College.

The school will use proceeds from a tax-exempt bond to finance several construction projects and purchase 18 acres of land and buildings from the Archdiocese of Boston; the property is the archdiocese's former Brighton headquarters, Mass Development said.

Projects include the construction of three new academic buildings on BC's Chestnut Hill campus, Mass Development said.

I have personally wondered where BC was getting the money they needed for their $172.400001 million land purchases since 2004 from the Archdiocese of Boston.* They are somewhwat financially poor relative to other area universities, having a comparatively small endowment of $1.6 billion as of May 2007. Their institutional master plan projects probably run, in sum, $500 million to $1 billion, but those are only poorly-informed, ballpark estimates. It is well-known that they are currently trying to raise large amounts of money from donors (particularly alumni) to fund their land purchases and expansive building and stadium construction projects, but I am not aware how much money they have managed to raise for that campaign.

Securing the tax-exempt bonds announced today are probably a major route for them to raise cash very quickly to fund their building boom.

Notice how the press release / Globe article only states: "Projects include the construction of three new academic buildings on BC's Chestnut Hill campus." I wonder if they will also use some of the funds raised by these bonds to pay for their proposed undergraduate dormitories and baseball stadium on the former Seminary land.


One last note: the Globe article quoted above includes hyperlinks. This has been something that online Globe articles have lacked (or been spotty to include), despite repeated criticism from the online blogging community. Nice to see them inserting hyperlinks!


* $99.4 million in 2004 for part of St. John's Seminary land and 192 Foster Street, $8 million in 2006 for tribunal building and parcel, $1 in 2006 for 188 Foster Street, and $65 million in 2007 for remainder of Seminary land and all buildings except for St. John's Hall.


NOTE (added 8/14/07): The press release provided by MassDevelopment includes other projects which are clearly part of BC's future, unapproved institutional master plan:

The school will use proceeds from a tax-exempt bond to finance several construction projects and purchase 18 acres of land and buildings from the Roman Catholic Archdiocese’s former Brighton headquarters. Projects include the construction of three new academic buildings, a recreation complex and student center on the school’s Chestnut Hill campus.

The recreation complex is certainly part of the master plan, the "student center" probably also is (i.e., probably referring to something contained within the recreation complex), and the 18-acre land purchase is slated to be completed later this month.