New College of Florida is seeking authority to borrow up to $47.5 million to complete the financial requirements of its sweeping takeover of the University of South Florida’s Sarasota-Manatee campus, which transferred to New College in July under legislation that also made it responsible for the debt attached to the property. That debt is concentrated in Atala Hall, the six-story residence hall and student center USF completed in 2023, with approximately $28.6 million in outstanding obligations New College must address before the end of the year.
Florida lawmakers approved the transfer in May, placing USF Sarasota-Manatee’s land, buildings and permanent facilities under New College’s ownership on July 1 while allowing USF to continue using academic buildings as its remaining students finish their degrees. That arrangement could last as long as four years, although the legislation gives New College only until Dec. 31 to arrange financing for the former campus’s outstanding facility debt — a condition that, if unmet, would void the transfer.
The deadline has brought New College to BankUnited, which would provide approximately $40 million through two loans, and a private accredited investor expected to contribute another $4.3 million under a subordinate financing arrangement. Presented to the college’s Finance and Administration Committee on Oct. 30, the proposal would authorize up to $7.5 million from the private investor, bringing the maximum borrowing to $47.5 million, although the financial model anticipates approximately $44.3 million in actual new debt.
Of that amount, approximately $28.6 million would address the obligations attached to Atala Hall, the roughly 100,000-square-foot building where a student center occupies the first two floors and 200 residential beds fill the four above. The building is the only property on the transferred campus identified in the financing documents as carrying outstanding debt, leaving the remainder of the borrowing to refinance New College’s existing housing obligations dating to 2006 and currently held by Truist Bank.
Those loans would be repaid primarily through student housing revenues, although New College’s projections show that the system would fall short of ordinary State University System debt-service coverage requirements during several of the early repayment years. The proposed financing also includes interest-only periods, increasing annual payments and a subordinate claim on part of the pledged revenue, requiring additional financial support from the New College Foundation, which would contribute money when necessary to maintain the loans’ minimum coverage covenant.
The higher payments would also place greater demands on New College’s housing revenue, which the financial model proposes to increase through a 10% rise in existing residence hall rental rates in fiscal 2028, followed by annual increases of 5% through fiscal 2031 and 3% beginning in fiscal 2032. Those increases have been incorporated into the repayment projections, although the committee materials do not establish that trustees have approved the full rental schedule.