SOUTH EUCLID, Ohio — A year after Notre Dame College shut its doors, the effort to sell the 50-acre campus is stalled, complicated by litigation over how and why the century-old school closed.
Now, a lender is trying to clear a path for prospective buyers.
In a foreclosure lawsuit filed last month, Bank of America is asking a judge to put a receiver – an outside expert – in charge of the property. That might seem like another snarl in this messy story, where some advocates are still trying to resurrect the school and Ohio’s attorney general recently accused the nonprofit college’s board of misusing donations.
But a city official says a receivership might be the way to finally break the logjam.
“Our focus has really been on trying to find the best and ideal user for the campus, which has dragged on now for over a year. … Fingers crossed, this process will take it across the finish line,” said Michael Love, South Euclid’s planning and development director.
Citing shrinking enrollment, rising costs and a heavy debt load, Notre Dame closed in May 2024.
RELATED: Notre Dame College in South Euclid will close at the end of spring semester 2024, school announces
Hanna Commercial Real Estate solicited bids for the campus last summer. But the property never changed hands. And it’s not listed for sale anymore.
“There are proposals out there that would be a very good fit for the property,” Love said, citing everything from plans for a professional soccer training complex to housing and education. “For a variety of reasons, they haven’t been able to proceed.”
Bank of America wants a receiver
In its lawsuit, filed in federal court on May 23, Bank of America says a purchase deal fell apart late last year, “apparently due to lack of funds.” Two other potential buyers pulled out because of concerns about how ongoing litigation could impact the sale, the filing says.
The real estate listing didn’t include an asking price. But Bank of America is trying to recoup more than $20.5 million in principal, interest and fees, according to court records.
That includes the remaining payments on $20 million in tax-exempt bonds the bank purchased in 2008 – bonds issued by the Ohio Higher Educational Facility Commission to help pay for campus construction projects. It also includes money that Notre Dame owns under a contract that borrowers and lenders use to hedge against fluctuations in interest rates.
And last year, Bank of America provided a $2 million credit line for maintenance and security at the shuttered campus as part of a liquidation and sale plan.
Most of that money has been spent. The line of credit expires at the end of June, according to court records.
“Absent the appointment of a receiver in whom the bank has confidence, no further funding will be forthcoming from the bank,” the lender’s attorneys wrote in one of their filings.
Without someone new in charge, the lawyers added, the value of the property "will decline and may be irreparably lost if it is not maintained and managed while an appropriate sales process is conducted."
A Bank of America spokesman declined to comment.
Notre Dame’s chief liquidation officer, Sam Steinhouse of Mentor-based Inglewood Associates, did not respond to an interview request.
“There’s a lot of questions that just can’t be answered right now,” said Justin Tisdale, a Notre Dame alumnus who is one of the plaintiffs in two lawsuits filed last year against the college’s board members.
RELATED: Notre Dame College students, staff hope finance talks reopen to save school
Along with former business professor Peter Corrigan and former baseball coach Len Barker, Tisdale has been trying to get authority to negotiate with Bank of America – in hopes of finding a way to settle the college’s debts with money from unidentified benefactors.
They want to work with an eventual buyer to preserve part of the campus for educational uses and to salvage the Notre Dame name.
The trio filed a lawsuit in Cuyahoga County Common Pleas Court last spring against the college’s board president, who later resigned. A judge tossed the case out, but the group is appealing.
In December, they sued other board members and the chief liquidation officer in Geauga County Common Pleas Court.
“We’re working hard to get Notre Dame, the essence of Notre Dame College, back to this community,” said Tisdale, who is also a member of South Euclid City Council.
“The goal of Notre Dame was to serve the underserved,” he added. “And that was a big piece of why we got into this fight.”
Ohio AG says board misused endowment money
Nearly all of the college’s board members have resigned, according to court filings.
But they’re under fire – and not just from Tisdale, Corrigan and Barker.
In a lawsuit filed May 22, Attorney General Dave Yost accused the board of tapping restricted endowment funds to pay off debt and other expenses. He’s also asking for a receiver to take control of the college’s assets – and for a full accounting of what was spent.
The attorney general’s office, which oversees nonprofits, says approximately $2.1 million in donor funds were misused and must be replaced. The lawsuit, filed in Cuyahoga County Common Pleas Court, caught city officials and other onlookers by surprise.
“We are deeply concerned by these developments and are conducting a thorough review of the lawsuit to understand their full implications,” South Euclid Mayor Georgine Welo wrote in a statement in response to the news.
Corrigan, the former business professor, said he was “blown away” by the attorney general’s lawsuit. “We just didn’t know,” he said of the claims of misappropriated funds.
With lawsuits in state and federal court, it’s not clear what will happen next. Bank of America is asking for a decision on its receivership request before the end of this month.
'A once-in-a-lifetime opportunity'
Love said potential buyers are still waiting in the wings.
The only suitor identified publicly is Cleveland Soccer Group, which pursued the campus last year as a site for a soccer training facility and headquarters. The group is working to launch an MLS Next Pro men’s team and a Division II women’s team, with plans for a stadium downtown.
RELATED: Cleveland is getting a women's pro soccer team - in a lower division
“We are very enthusiastic about the soccer group, and we’re hoping to be able to work with them to make Notre Dame the home for their training facility,” Love said, adding that sports could coexist with other uses, including education.
“They are working with some other people, as well, to hopefully do a full master plan for the property,” he added. “I can’t give too many more details than that.”
In April, Cleveland Soccer Group put out a broad request for proposals for 40 to 100 acres for its training needs.
On Monday, the group’s chief marketing officer said they’re talking to a few communities, including South Euclid, and reviewing proposals. “It’s still an open field right now,” Gina Prodan Kelly wrote in a text message.
Corrigan and Tisdale aren’t giving up on their vision for bringing Notre Dame back in some form, perhaps as a satellite campus for another university.
“I have students that call me every single day,” Corrigan said. “We had a lot of good things going on at that school, and I’m not just ready to turn my back on it and say ‘OK, that’s it. It’s over.’ … The city can’t stand to lose another institute of higher learning.”
For Tisdale, it’s painful to see the vacant buildings and quiet athletic fields – places where students and neighbors gathered for more than a century. “It’s hard to have all of this space and not be able to use it in the community,” he said.
Love echoed that, saying that public access must be part of any solution. With the recent legal developments, he hopes that the solution will take months, not years, to reach.
“It’s very rare in a community like South Euclid that a 50-acre site becomes available,” he said. “So this is a once-in-a-lifetime opportunity to see something happen.”
