A motion passed by Laurentian’s board of governors in December approved the sale of the Vale Living with Lakes Centre building to the province for $8 million.
The sale of the building to the province and the subsequent lease agreement is part of real estate deals intended to fund payouts to Laurentian’s creditors.
This is following LU’s 2021-2022 journey in creditor protection under the auspices of the Companies’ Creditors Arrangement Act (CCAA), a situation unprecedented in the post-secondary sector and now banned under federal law.
A sale price for the building is included in a motion passed in a closed Dec. 9 special meeting of Laurentian’s board of governors. The minutes for that meeting are part of the package for the upcoming Feb. 21 meeting of the board.
The same December board motion also said the Living with Lakes building would be leased back to Laurentian for an annual rent of $496,254.
The $8 million pricetag for the building is also what was contemplated in Laurentian’s 2023-2024 audited financial statements.
The meeting minutes said provincial Treasury Board approval of the sale and lease agreement was expected to take place in December, followed by cabinet approval in January. Laurentian announced the building’s sale at the end of January.
Sudbury.com reached out to Laurentian University, to confirm that the final sale price and lease agreement, following provincial approval, was the same as in the December board motion.
We also asked to receive a copy of the appendices mentioned in the full motion (see below) or if creditors would immediately see any proceeds from the building’s sale.
In response to all of the above questions, we received the following brief emailed reply from Laurentian communications staff: “At this time, we are unable to provide additional details beyond what has been submitted as part of the board package.”
We also contacted Infrastructure Ontario about the purchase price and lease agreement, but did not receive a reply from ministry staff.
The university’s vice-president of finance and administration, Sylvie Lafontaine, spoke to the issue in the Dec. 9 meeting, according to the minutes.
“Ms. Lafontaine noted that this is a critical milestone for Laurentian in securing the sale of the first designated property and provided an overview of the cost of the sale and the lease back agreement,” said the minutes.
“It was noted that consultation with the Indigenous community had concluded and that the use of the building would remain unchanged to ensure the continuation of university activities.”
“Following Ms. Lafontaine’s remarks, a fulsome discussion was held regarding the timing of the sales of the remaining properties,” said the minutes.
“It was confirmed that the sales and leaseback agreement for Vale Living with Lakes would be used as a template for the remaining properties and that planning was underway to complete survey work which would be necessary prior to the sale of the other properties.”
The motion saw the board of governors approve “the sale of the lands and buildings located at 840 Ramsey Lake Road” (the Living with Lakes Centre), “at the agreed upon purchase price of $8,000,000, exclusive of HST, and in accordance with the terms and conditions contained in Appendix 1.”
It also saw the board authorize Laurentian to enter into a lease agreement “with His Majesty The King In Right Of Ontario As Represented By The Minister Of Infrastructure” for the “rental of the lands and buildings located at 840 Ramsey Lake Road … at an annual rent of $496,254 for an initial term of 10 years and in accordance with the terms and conditions contained in Appendix 2.”
As stated above, Sudbury.com requested a copy of the Appendix 1 and Appendix 2 documents mentioned in the motion from Laurentian University, but we did not receive them.
Under its plan of arrangement, the deadline for Laurentian creditors to be paid is the third anniversary of its exit from insolvency, so on Nov. 28, 2025.
Aside from secured creditors and those owed vacation pay, who were already compensated in 2022, most creditors are still waiting for their money.
Among Laurentian’s creditors are former employees of the university terminated as part of the CCAA proceedings.
Creditors will only receive a small percentage of what they were originally owed, or between 14 and 24 per cent.
Sudbury.com attempted to get some answers from the province last fall as to when these real estate deals would be completed so that Laurentian could finally fulfill the terms of its plan of arrangement, to no avail.
Laurentian’s 2022 post-insolvency plan of arrangement states that a pool of cash of up to $53.5 million for creditors is to come from the sale of university real estate to the province of Ontario, which will be rented, in some cases, back to LU.
The minimum floor for the pool of cash has been set at $45.5 million. If Laurentian doesn’t fund the creditors’ distribution pool to at least that amount by Nov. 28, 2025, the university will have defaulted (although they have the option to apply for a one-year reprieve).
According to the 2023 term sheet, property sales were to include seven university parcels of land and five buildings, which, besides the Living with Lakes building, also includes the East Residence, the Northern Ontario School of Medicine building, the Health Sciences building and the Security and Maintenance building.
The university’s greenspace is not included in the transactions.
The total land identified in the term sheet covers 68.75 acres, which represents approximately nine per cent of the university’s total 750+ acres.
Laurentian’s president’s home was also sold in 2024 for $925,000, and proceeds from that sale will also go to its creditors.
The university’s president, Lynn Wells, commented on the property sales to the province, including the recent sale of the Vale Living with Lakes Centre, in her written report included in the package for the Feb. 21 board of governors meeting.
“This is a complex process that involves a number of stakeholders, and several steps will have to take place before we are in a position to make any public announcements,” she said.
“However, the process is well underway and the university is confident that the sales can be completed before the November deadline. We will provide additional updates as we are able.
“To that point, Laurentian was pleased to announce on Jan. 30 that it had completed the sale of the Vale Living with Lakes Centre to the province. An agreement to lease the property back from the province has also been finalized.
“This will allow Laurentian to maintain university activities and continue to benefit from the use of the facilities. While I understand why the news of this sale may be met with trepidation by some in the university community, I can assure you that the daily activities of the Living with Lakes Centre will not be affected by the sale.
“The teaching and research activities that happen there will continue uninterrupted, and Laurentian remains strongly committed to the centre’s continued success.”
Heidi Ulrichsen is Sudbury.com’s assistant editor. She also covers education and the arts scene.
