Mercyhurst University finalized the sale of its North East campus to S.P.I.R.E. Institute's Baltimore-based parent company Tuesday evening, ending a more than three-decade ownership of the historic campus in the heart of the community.
The 70-acre property, which includes the buildings that were once home to St. Mary's Seminary, was sold to Ehrenfeld Companies, led by Jonathan Ehrenfeld, owner of Blue Ocean Investments, for more than $4 million.
Mercyhurst University President Kathleen A. Getz said in a statement that both entities "emerge winners, as does the North East community."
“As Mercyhurst sought a new owner for this space, it was important to us that we identify a buyer that would be welcome in the North East community,” Getz said. “We believe that the Ehrenfeld Companies will be a wonderful fit for the campus and community, bringing new opportunities and operations that support the local downtown area.”
“We are honored to serve as the new stewards of this tremendous historical campus,” Ehrenfeld said in a statement. “... Our immediate focus is to familiarize ourselves with the campus, study potential building usages and understand community needs. We have already begun conversations with community partners and stakeholders to develop a concept that will benefit the region and drive economic impact.”
Ehrenfeld was attracted to the "unique features, history and location" of Mercyhurst University, according to the press release issued by Mercyhurst.
Ehrenfeld said that his company has already begun to build its "local team," which will be led by Director of Operations Bill Unger.
Unger, a Mercyhurst graduate, was hired in September. He previously worked as director of environmental services for Crothall Healthcare in the Buffalo, N.Y. area.
“Bill and his family live minutes away from campus and he’ll be a wonderful resource for our patrons and partners," Ehrenfeld said.
What's it worth?: Erie County Assessment Board sets new value of Mercyhurst North East
Blue Ocean's plans
Blue Ocean Investments has not said publicly exactly how it intends to use the campus, but records submitted by the borough to the Pennsylvania Department of Community and Economic Development and obtained by the Erie Times-News in 2021 reveal that it plans to use it to expand S.P.I.R.E. Institute, the sports training facility in Ashtabula County, Ohio.
S.P.I.R.E. Institute operates sports programs for high school, college and graduate students. In North East, it also plans to offer a culinary school and a performing arts curriculum in addition to athletic programming.
The Borough of North East submitted an application for a Redevelopment Assistance Capital Program grant from the state for $6.5 million in an effort to help Ehrenfeld Companies and Blue Ocean construct a new 70,000 square-foot multi-sports complex and renovate a natatorium and existing field house. The grant has not been approved by the Gov. Tom Wolf.
Ehrenfeld Companies and Blue Ocean, according to the grant application, intend to renovate some of the older buildings on the property and add a "state-of-the-art theatre, sound studio, and recording studio."
The renovation work was estimated to cost more than $3.3 million, while the construction of the new sports complex would exceed $9.6 million. The sports complex would include a fitness center that would be accessible to the North East community.
But those cost estimates and plans could change.
A timeline of the project in the application says bids for renovation and new construction would be advertised in February and awarded in March. Construction would begin in June and be completed by December 2023. S.P.I.R.E. North East would launch its programming in September 2022.
The timing of those plans may also be in flux. The sale was expected to be finalized in mid-December. Closing, however, didn't happen until Tuesday.
'A destination for the Erie region'
North East Borough Manager Pat Gehrlein called the sale a "bright day for the future of the North East community."
"Just as we welcomed Mercyhurst University 30 years ago to our community, we are filled with hope and optimism for the future of North East," he said in a statement. "I want to thank President Getz and her dedicated staff for finding a truly visionary partner in the Ehrenfeld Companies to invest in the North East community. We look forward to working with Jonathan and his team to make this campus a destination for the Erie region and beyond for generations to come."
Former North East Township Supervisor Robert Mazza, owner of Mazza Vineyards, is excited about the prospects for the property under Blue Ocean's ownership.
"What's most exciting is the prospects of the economic impact to not only the North East area, but the Erie area as a whole," said Mazza, whose term as supervisor ended in 2021. "It will have greater implications with that type of business than the alternatives.
"Another thing that's very, very encouraging is I think there will be some benefit perhaps to the North East School District. They've already had very preliminary conversations about shared athletic fields and perhaps some improvements that the school district was contemplating," Mazza continued. "The folks from Blue Ocean have basically said, 'Wait until we get there and let's work together.' That's always been the case to a certain extent with Mercyhurst as well. It was always to work with other community partners, rather than two different entities doing the same thing."
On the tax rolls
The property, composed of seven parcels, includes land that straddles the borough and North East Township; historic buildings, including a chapel, that once made up the seminary; a natatorium; and buildings that Mercyhurst constructed during its ownership, which dates to 1991.
Now, for the first time, the property will be on the tax rolls.
Late last year, Mercyhurst successfully requested the Erie County Board of Tax Assessment Appeals to lower the assessed value of the property from its former value of $24.8 million, saying in a July 29 assessment appeal that the value "exceeds fair market value" and instead should be valued closer to the sales price of $4.5 million.
For tax purposes, however, the Assessment Board on Nov. 1 set the value of the 70-acre property at $6,630,030.
The Assessment Board based its decision on a 2019 appraisal of the property, which put the value at just more than $9 million. The board also considered how the property could be used.
The assessed value is critical because for the first time in decades the property will be on the tax rolls. The new assessed value of $6,630,030 translates to a total tax bill of about $143,000, to be distributed among the North East Borough, North East Township, the North East School District and Erie County government.
Mazza, a former Mercyhurst University trustee, said the new assessed value is "fair" and that Blue Ocean got a great deal on the property.
"The exciting thing is, is this isn't the top. This is just the beginning," he said. "They already have plans for expansion and construction, which will further increase their assessment, which will further benefit the municipalities, as well as the county in terms of tax revenue. It's all heading in the right direction."
After an 18-month feasibility study, Mercyhurst officials in August 2019 announced they would move the programs at the North East campus to Erie by the summer of 2021 to increase enrollment at the university’s main campus, reduce operating costs and strengthen two-year academic programs that it had long offered in North East, which at the time had 150 employees and an enrollment of about 550 students.
In May 2020, Mercyhurst opted to move up its consolidation by one year. It moved all associate degree programs to its main campus in Erie that fall and disbanded its sports teams. Only Mercyhurst’s nursing, biology, allied health, and police academy programs remained in North East for the 2020-21 academic year. The move was made in response to the impact the COVID-19 pandemic had on college enrollment across the country.
The university will continue to operate its Municipal Police Training Academy housed in the Janet L. Miller building on Route 89 in North East Township.
To make room for the academic programs previously run out of the North East campus, Mercyhurst bought and renovated the Sisters of Mercy Motherhouse on East Grandview Avenue. Most of its nursing classrooms, labs, and offices are now located there. A large section of the facility continues to be used by the Sisters of Mercy. It opened for academic use last week at the start of the spring semester.
"Mission of education'
In the late 1980s, after St. Mary's Seminary closed, members of the North East community raised $500,000 to renovate the building and convince Mercyhurst to open a satellite campus.
The North East Chamber of Commerce's then-director Lisa Miller Gensheimer and Mazza, who at the time was president of the chamber board, pitched the idea to Mercyhurst College President William Garvey, who liked the idea but was concerned about the cost of renovating the old, limestone buildings. That led to the formation of the North East Community Foundation, which began work to solicit funds from local businesses and community members. It pledged to give Mercyhurst $500,000 over five years, according to the foundation.
The late Robert Miller, the former owner of Better Baked Foods who spearheaded those fundraising efforts, gave $100,000 of his own money. Later, Miller would make two contributions of $1 million each to advance the campus.
"I was told if we didn't do that, there might be a prison or a mall or a nursing home, " Miller said in 2011 when the university awarded him an honorary degree.
Through the years, Mercyhurst added townhomes for student housing, sports fields and an educational facility, the Michele and Tom Ridge Health and Safety Building. At one time it owned 84 acres, including the 13-acre estate of Miller, which it had used for private gatherings and for culinary and hospitality management programs. The Miller estate was sold separately in early 2021.
"It has so much potential," Mazza said. "We're excited that the mission of education is still going to carry forward with S.P.I.R.E. Institute."
Early history: A Baltimore connection
That Blue Ocean Investments is based in Baltimore is a fitting connection to the history of the campus.
The Order of Redemptorist Priests of the Baltimore Province founded St. Mary's College, or more commonly St. Mary's Seminary, in North East in 1881.
The first building on the campus, Miller Hall, a limestone Second Empire building, was designed in 1868 and built by a group of Methodists and Presbyterians.
After buying the property, the Redemptorists added a residence hall in 1893 and named it after the Bishop of Philadelphia, Saint John Neumann, one of their members, according to the Society of Architectural Historians. The college was used to train Redemptorists and Roman Catholic men to become priests.
Buffalo architects Lansing and Beierl in 1901 were hired to design and build St. Mary's Chapel, also known as the Chapel of Our Lady of Perpetual Help. With tts copper fleche, or spire, the chapel is an iconic landmark in the community.
The college was also home to a group of German nuns, who in 1920 came to St. Mary's to assist with cooking and housekeeping. They established a convent on the campus known as Karsh Hall.
As was the case with Mercyhurst, declining enrollment forced the Redemptorists to close the campus in 1987, according to Erie Times-News archives.
About Blue Ocean Investments
Ehrenfeld, according to his biography, has "more than 20 years of success across the real estate, waste removal, environmental abatement, and construction industries." He founded Blue Ocean in 2004. The company's real estate portfolio includes multifamily, office, retail, industrial, hospitality, and self-storage properties.
Ehrenfeld Companies and Blue Ocean have been expanding their portfolio in the service industry, hospitality, and athletic development in recent years.
In 2018, Blue Ocean established affiliate Axxella, which in December 2019 bought the land and buildings at S.P.I.R.E. Institute in Geneva, Ohio for $7.35 million. The sales price did not include what Axxella paid for personal property, like furniture, fixtures and equipment, according to Crains Cleveland Business.
More recently, it transformed a former high school in Hampstead, Maryland, into the Panther Performance Center.
This article originally appeared on Erie Times-News: Mercyhurst North East campus sold to Baltimore company