Liberty buys back Candlers Mountain property

Liberty University is once again the owner of a 26-acre tract on Candlers Mountain.

In 2003, LU sold the property across U.S. 460 from the main campus to Bostic Development for $579,225, according to city records. The college financed the construction of residence halls, a clubhouse and gym through leasing arrangements with the developer.

On Monday, LU bought the now-developed property back for $20.5 million.

“Back in those days, it was tough,” LU Chancellor Jerry Falwell Jr. said, referring to 2003, when the school sold the property. “We were just coming out of a tough decade financially, and it was hard to find financing for large projects.”

The term of the lease was 40 years, with the option to purchase the property after five years, he said.

The property, part of what the college calls Campus East along Liberty Mountain Drive, now includes 19 residence halls with 266 apartment-style dorms. LU already owned another 11 residence halls also on Campus East.

“Our plan all along was to purchase the apartments as soon as we had an opportunity to do that,” Falwell said, “because the cost for the university is a whole lot less.”

Liberty was paying about $2.5 million annually to lease the apartments, Falwell said, and as a provision in the agreement with Bostic also paid property taxes for the parcel.

In the past several years, the college has been paying about $215,000 for annual property taxes on the parcel, according to city records.

In 2008, the property was assessed at about $20.2 million. As of today, the start of a new fiscal year, the proposed assessment jumps to $26.8 million, which also would have resulted in higher property taxes, Falwell said.

“We promised the city when we did the sale-lease back in 2003 that the city would collect taxes (on the property) for five years,” Falwell said.

The college holds a 501(c)(3) tax-exempt status under the IRS, so the property will return to being tax-exempt now that the college owns it again, Falwell said.

LU’s Director of Planning and Construction Charles Spence said owning the property will give the college more flexibility for future upgrades and development of the site.

“We own the property all the way around,” he said, and now could more easily add to the site.

“It makes a lot more sense to invest in your own facility, as opposed to a rented facility,” he said. “You cut out third-party markups on everything; it’s much more cost-effective in a lot of areas.”