Concordia’s Purchase of Second Campus a ‘Once-in-a-Lifetime Opportunity’

ONE YEAR AGO, Concordia University Irvine’s leadership was not even considering purchasing another campus. But an unforeseen opportunity, the Lord’s guidance, and leadership from strategically-placed people has allowed Concordia to acquire a $43.5-million building which Dr. Michael Thomas calls one of the most important developments in Concordia’s history. “In essence, we are adding 40 percent more square footage to our classroom and office space,” Dr. Thomas says. “This building unleashes us to think in completely new ways in terms of programs we can launch. It will allow us to accelerate our plans to grow health-care related programs. It will bring us forward a decade in time because we don’t have to repurpose buildings on campus or go through the approval process to renovate it for another purpose.”

Before the purchase, Concordia’s campus building space totaled around 280,000 square feet, which includes every internal space except residence halls. The new building adds 113,882 more square feet in a three-story building on 6.6 acres at the corner of Alton Parkway and Laguna Canyon Road, adjacent to the Kaiser Permanente Irvine Medical Center and Hoag Hospital Irvine. Just three miles from the current campus, the facility comes with a 690-space parking lot and parking structure. It sits at 16355 Laguna Canyon Road in Concordia - Spectrum Campus™ Planning Area. Providentially, the building is zoned for education, as it was previously occupied by another university. It features 20,000 square feet of furnished, state-of-the-art nursing teaching space and more than 90,000 square feet of classrooms, offices, workstations, and unique educational spaces. This new building will house Concordia’s growing Accelerated Bachelor of Science in Nursing (ABSN) program as well as other academic programs and university offices. The ABSN program will move to the new location this summer, and other offices and programs will follow in the coming months.

But the major purchase began with a minor crisis last summer.

The Need for Space

Concordia’s growth has been “a tale of restrictions,” says Dr. Thomas. “Restrictions on the number of cars allowed on campus, and the amount of parking. Restrictions on the growth of academic programs, especially graduate programs.”

One pressing example is the nursing program, which is growing and requires additional square footage for labs, classrooms, and offices. When the leased space it occupied in a nearby office building came up for renewal, the new lease price was substantially higher, and there was no room to expand. Tim Odle, Concordia’s vice president of university operations, athletics, and enrollment services, and a broker began scouting other locations in Irvine that could accommodate the nursing program’s growth. When nothing seemed to fit, the broker asked if Concordia’s leadership had considered buying. Another university was selling a building which had been outfitted for nursing and medical education training, then essentially vacated in early 2020 with the advent of COVID.

“When we walked through the building, it was quite eerie,” says Dr. Thomas. “Many of the calendars were still turned to March 2020 because the people had left and never really come back. In the nursing skills labs, the beds and mannequins were there with all the exam rooms and classrooms for nursing. We couldn’t believe it.” Still, “We all thought the idea of buying it was little bit insane, like, ‘How can we honestly do this?’” he says.

With other investors circling, the prospects for success seemed daunting. But Concordia had just hired Steve Strauch, an expert in these kinds of deals, to be its vice president of finance — and Strauch, who had a career’s worth of experience working for the Lutheran Church Extension Fund (LCEF) and other financial entities, saw a way forward. “It penciled out, financially,” Strauch says. “We could take the same money we were paying for the lease and put it into a building we owned which would appreciate. It was also a way to diversify our investments. We took it to the finance committee of the Board of Regents and then prayed hard about it, asking, ʻIs this where God is leading us?’ The farther we went down that road, I was always anticipating a roadblock, but every roadblock that came our way was removed quickly.”

Because of its strong financial footing, Concordia was in a position to receive a loan of $45 million with attractive terms from Lutheran Church Extension Fund (LCEF). Bart Day, LCEF president and CEO, says the purchase was “a once-in-a-lifetime opportunity for Concordia, to find this type of property and space in that proximity to campus being used for a program you wanted to expand. The ability to capture this piece of property and set the direction of the University for the next ten or twenty years as they expand those programs — we thought it was an opportunity they couldn’t pass up.” Still, closing on the property was never certain. “The odds of these really big deals going through is 20 or 30 percent,” Strauch says. “I always knew this thing could go off the rails at any moment. I just kept watching it stay on the track and saying, ‘Wow. Wow.’” Dr. Thomas calls the confluence of factors and people “a God thing.” “God gives us the right people and the right circumstances at the right time,” he says. “As we went through the process, every wall, every obstacle fell with almost no pushing. It was remarkable. Everything we did, every step we took convinced us that the Lord’s hand was guiding this process.”

Serendipitously, the building closed on the day of Irvine’s State of the City address, which Concordia co-sponsored. That evening, the mayor announced during the address that Concordia had purchased the building and pointed to it as a significant commitment to and  investment in Irvine’s workforce. The property will be called the Concordia - Spectrum Campus™. Concordia’s original site will be called the Turtle Rock Campus, after the Turtle Rock area of Irvine where it is located.

Peter Senkbeil, vice president and special assistant to the president, is leading a task force on how to use the building. “I was amazed. I was thrilled. I never thought we would be able to get this kind of facility in this location at this price,” says Senkbeil. “It’s everything we were hoping for. It’s almost a miracle of God that this was available and we were able to get it when all the pieces fell into place.” In addition to the building, the Concordia - Spectrum Campus™ comes with all existing furniture, fixtures, and equipment which includes nursing beds and mannequins, classroom furniture, computer technologies, projectors, white boards, and more.

“It’s incredible, the opportunity this new campus provides,” says Senkbeil.

Beginning in August, students in Concordia's ABSN program will attend classes at the Concordia - Spectrum Campus™. Additional health care programs are in the works, and the university is developing a proposal for a master of science in nursing (MSN) that would allow graduates to become certified as family nurse practitioners.

Graduate programs within the School of Health and Human Sciences, as well as other health care related programs, may one day relocate there, and the close proximity to Kaiser and Hoag hospitals provides potential opportunities for student internships and clinical assignments, enabling Concordia to consider plans for expansion with other healthcare programs.

For now, personnel are working quickly to prepare the building for the fall semester, re-carpeting, and re-painting the interior in Concordia green and gold. The building will house on-site IT personnel, cleaning and maintenance staff, a campus safety representative, an administrative staff head, and property management staff. Parking for Concordia community members will be free. Chapels will be streamed, and food services will be available.

Unaffected will be Concordia's undergraduate student population and online students. No undergraduate programs, classes, or residential halls are slated to be housed at the Concordia - Spectrum Campus™. Per the terms of the purchase agreement, the previous owner will continue to lease one floor of the building for approximately 18 months while they transition to a new facility.

Financially, there is “tons of upside for the university,” Day says.

The Concordia - Spectrum Campus™ acquisition also happens simultaneously with the implementation of a new strategic plan just adopted by the Board of Regents in February to guide the university through its 50th anniversary and beyond.  Thomas says Concordia is ready to launch into its next major phase as the Concordia of the western United States: “We are poised to come into our own,” he says. “This acquisition enables us to expand new academic programs to meet the workforce development needs of this entire region. And as a Christian university, we are grateful to the Lord for opening up the tremendous blessing of the Concordia - Spectrum Campus™. 

 

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