After years of broken deals and false starts, Morris Brown College and its creditors have agreed to an offer to sell most of its 36-acre property to Atlanta and Friendship Baptist Church for $14.6 million.
That is about $2 million more than what the city and Friendship previously reported they offered Morris Brown as one of several bids for the property.
Morris Brown College filed for bankruptcy in August, 2012 with about $30 million in debt. The Morris Brown Creditors Committee, led by the AME Church that now holds most of the debt, has been at the center of deciding what offer to accept or whether to put the property up for auction.
"The city of Atlanta has been informed by the Morris Brown Creditors Committee that they have confirmed the Invest Atlanta/Friendship Baptist Church joint offer as the highest and best bid," spokeswoman Melissa Mullinax wrote in an email Friday. "The city looks forward to a confirmation from U. S. Bankruptcy JudgeBarbara Ellis-Monro on May 29, 2014."
It is not known how much the other bidders were willing to pay for the land, but people close to the transaction said this was one deal Atlanta Mayor Kasim Reed really was determined to win.
"There are still a few steps to go through with the bankruptcy court, but this is a very positive milestone that we have achieved," said Lloyd Hawk, chairman of the board for Friendship Baptist Church. "There have been five attempts to get here before, and we are the first to get this far."
Originally, the Morris Brown Creditors Committee scheduled an auction Friday at 10 a.m., when it was expected they would have disclosed whether they were accepting one of the bids or opening it up to what could have been a free-for-all.
But after further negotiations between Morris Brown College, the Creditors Committee, the city and Friendship, an agreement was reached to accept the highest and most qualified bidder — which ended up being the city's Invest Atlanta and Friendship Baptist Church.
"When you've got the creditors agreeing to the sale and you've got Morris Brown agreeing to the sale, that's a major step," Hawk said.
It is not clear how much money Morris Brown College will have available to continue operating as an institution of higher learning. It lost its accreditation in 2002. Some of the latest figures show Morris Brown has less than three dozen students and 10 faculty members attending and working at the college.
Friendship is contributing $4 million to the deal. As a result, it will own the property that is now Middleton Towers, the Middletown Towers parking lot and the John Lewis gymnasium. Atlanta will invest $10.625 million into the transaction and will end up owning all of Morris Brown's property north of Martin Luther King Jr. Drive, including the stadium.
Morris Brown College will be able to keep ownership of the administration building and two other buildings on the historic part of the campus south of Martin Luther King Jr. Drive.
"It's definitely the most positive position that Morris Brown has been in since they filed for bankruptcy, and it gives them an opportunity to collaborate with both the city and Friendship going forward," Hawk said.
But according to the U.S. Bankruptcy Court, interested parties have until May 27 to object to the proposed sale. Then on May 29, Judge Ellis-Monro will have a hearing on the sale.
It is possible Clark-Atlanta University could end up objecting to the sale of the property because of its long-standing reversionary rights.
Clark Atlanta used to own about half the property -- about 17 acres. The agreement was if the property was no longer being used by an educational institution it would revert back to Clark Atlanta. It is not clear how the Atlanta-Friendship Baptist's bid would address Clark Atlanta's interest in the property and whether that could hold up the sale.
If all goes as planned with no delays, the property transaction is supposed to close on June 16.
The email sent from city spokeswoman Mullinax just before the posting of this article also included the following information:
Invest Atlanta and Friendship Baptist Church intend to support the continued growth and economic development of west Atlanta, while simultaneously providing Morris Brown College with a platform to continue its educational mission.
As the successful bidders in the Morris Brown Bankruptcy case, Invest Atlanta's and Friendship's involvement will:
- Allow Morris Brown College to retain a campus as it emerges from bankruptcy, facilitating a means for it to continue its core mission of educating the community and respecting its historic legacy.
- Insure the continued stable and cohesive development of the west Atlanta community.
- Provide a coordinated framework for the development of these important parcels, in conjunction with other redevelopment initiatives along the Martin Luther King, Jr. corridor.
- Provide a model for how governments and private institutions can work together, along with the community, to ensure stable, smart and sustainable growth and development.
- Showcase Invest Atlanta's and Friendship's continued commitment to the west Atlanta neighborhood and surrounding communities.
The specifics of Invest Atlanta's and Friendship's successful bids are as follows:
- Friendship will invest $4 million.
- Invest Atlanta will invest $10.625 million.
- Friendship will receive certain properties in the sale.
- Invest Atlanta will receive certain properties.
- Morris Brown will retain certain historic properties as its campus.
