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The Board of Trustees, those responsible for the health and wellbeing of the Seminary, have been in a process for the past 18 months of reviewing areas of the Seminary’s work that most contribute to the mission of the Seminary. Their task is to build the Seminary for the future, taking into account the trends and priorities, to make theological training accessible for God’s people.
During this process, it became clear that the housing owned by the Seminary takes significant financial investment to manage and maintain, raising the question of whether the Seminary should be in the business of owning and operating housing, something that takes considerable resources and expertise. To even consider the possibility, the Seminary had to list the apartments for sale.
Now that the apartments are almost twenty years old, there is a significant cost of deferred maintenance required. As the Seminary looks at its resources, the questions that we continue to ask are: Would the resources that go into apartment maintenance and administration be better used if put toward strategic initiatives? Could an independent owner offer a substantially better opportunity for maintenance and management of the apartments for its residents?
The Seminary is strongly considering investors who recognize our students as their primary market for leases.
In addition, it is the hope that a buyer could bring significant improvements to the units that are in much need of upkeep. This would include renovations to units being vacated and other amenities not within the Seminary’s reach to provide.
After careful review of all Seminary assets, last fall, the Finance Committee brought the idea of selling the apartments to the Seminary leadership for consideration. During June 2021 meetings, the Board of Trustees voted to list the apartments so possibilities could be considered.
After considering the bids that had been submitted and determining if this would be best for the Seminary and students, based on a variety of factors, a vote to move forward with the sale of the apartments was approved by the Board of Trustees at the November meeting.
Denver Seminary is at a healthy place financially. Over the past few years, priority has been placed on paying off debts incurred while building the current campus. In addition, budget cuts were made to ensure resources are used strategically to enhance the student experience, keep tuition manageable, and provide scholarships.
Our students make a significant financial commitment to attend seminary, and decisions around financial viability are driven by a desire to honor this investment now and in the future. Though many seminaries across the US have shuttered their doors due to financial unsustainability, the decision to consider selling the apartments is designed to set the Seminary up for success in the future.
With that said, the Seminary has maintained a consistent review of expenses related to the housing apartments. The Seminary was able to absorb the increased costs of the expenses while providing a low to market rate for its residents. Unfortunately, with recent increased costs the Seminary would now have to pass those increases along to the residents by increasing their rates.
For commercial real estate, the process begins by listing the property within a specific network of real estate agents. Unlike buying a house where the market is simply open for public view, this process is one of greater length and specificity. Once investors have visited the property, they can submit a bid both of price and general parameters of agreements. The bids are then considered by the buyer. There are myriad ways that the seller can negotiate on price, and even more importantly in our situation, on the specific agreements made with the buyer. This can include the option to master lease apartments from the buyer, so we can provide guaranteed housing for a certain number of high-need students.
The assets of the potential sale would go toward both operational costs that have been deferred due to increased costs in running a school, as well as endowments that would put the Seminary in a strong financial position for the future. Some money would be utilized to supplement the transition of potential cost increases for current residents. Funds could also be used for improvements to online learning resources, classroom spaces, and faculty positions, changes that would benefit all Denver Seminary students.
This process is underway and a bid was presented this week for the apartments that is being considered. We may have more information as soon as the week of November 8.
Our heart, should this sale go through, is to make this transition as smooth as possible and to minimize the disruption for students so staying in your current housing is still a viable option.
Feedback from the October 4th Town Hall was sent to the executive leadership of the Seminary and to the Executive Committee of the Board of Trustees. Two student leaders met with the Student Life and Enrollment Management Committee of the Board of Trustees, and voiced the concerns and needs of the Seminary’s residential population on student’s behalf.
The Seminary’s Board of Trustees approach their leadership with a deep care for the students and have taken this feedback into consideration. They are prayerfully and thoughtfully listening to your needs as they make these decisions.
We know that our students value the community at Denver Seminary and that those who have moved to campus are the prime drivers for a sense of belonging and home. Our students’ investment in the community is one of the reasons Denver Seminary is so special. As much as staff and faculty encourage and foster this sense of community, it is our students who make the apartments feel like home. Even if the apartments are not owned by the Seminary, the prime market will be students, who will still have the opportunity to be neighbors to and community with one another during this transformative season of education.
If the apartments are no longer owned by the Seminary, Student Life will still maintain the Community Advisor positions and the student leadership roles that promote and encourage the community connections and serve as a bridge to the staff of the Seminary. This has been an effective model not just at the Seminary but in other housing units through organizations such as Apartment Life.
As a Seminary, we are still committed to offering residential classes even as online class offerings expand to make the Seminary education more accessible to a broader audience. The move to consider selling the apartments is not moving us away from our values but centering on our mission for all of our Denver Seminary students.
All current leases are honored through the end of the lease period, which always end in May and are renewed year-by-year. The Seminary is not considering any investor who would plan to renovate and sell the apartments in a short window of time.
For students who have moved on campus to attend Denver Seminary, affordability of the apartments is key. For many years, the Seminary has offered the student apartments at rates well below market. With the rising cost of utilities, taxes, and housing costs across the country, there is an inevitable increase of rent that would happen whether the apartments are owned by the Seminary or by another company. At the same time, the Seminary is considering ways to offset the cost of living in the Denver area for those who could not afford to move here otherwise.
Because students came to the apartments with an expectation that their cost of living would remain reasonably stable, we know that this announcement has put the stability of one’s costs in potential jeopardy. A study of the area was done as a part of the Board deliberations, and it was found that there was a surprising amount of affordable housing within a 10-minute radius of the Seminary. Again, the investors want to keep student residents to provide a stable and vetted community to which leasing is easy.
A potential sale is intended to be an investment to improve the resident experience. New owners will have the expertise and ability to include renovate vacated units, improve laundry facilities and community amenities, and manage housing in ways that is beyond the scope of the Seminary. Though there are not yet specifics on what this could look like, we do believe there is a future that could look better for the residents of the apartments.
We know that for Denver Seminary’s international students, living on campus is a significant part of acclimation to a new culture and to life in the United States while studying. We also acknowledge that the apartment community provides significant support for students moving here from around the world. The Seminary has made this population a priority and is considering ways to partner with the buyer to maintain openings in close housing units for F-1 students.
The Seminary housing is not the main source of diversity on our campus, as many of our students of color live off campus and are involved in a variety of communities beyond the Seminary. The Seminary continues to explore how we can better develop diversity on our campus and ways that we can enroll more students from a variety of backgrounds.