Attorney General of Wisconsin — Opinion
July 10, 1974.
Land; University; The University of Wisconsin System may sell a dormitory which no longer is needed for educational purposes upon such terms as are agreeable to the Wisconsin State Agencies Building Corporation and H.U.D. to guarantee the payment of the bonds issued for the initial construction of the building.
ROBERT W. WARREN, Attorney General
J.S. HOLT, Secretary, Board of Regents, University of Wisconsin System
You have asked me certain questions related to the possible conversion of a vacant student residence hall at the University of Wisconsin — Whitewater into a housing facility for the elderly.
Enclosed is a copy of an opinion relating to the same matter which I recently sent to Mr. Charles Hill, Secretary, Department of Local Affairs and Development. It answers some of your inquiries.
You ask these four specific questions:
“1. Do provisions of any of the `securing documents’ which relate to the bonds issued to finance the construction of
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Wellers Hall at UW-Whitewater or like buildings under similar bond issues prohibit a change in use and possession of the building?
“2. Can the University, within its statutory authority, operate Wellers Hall as an elderly housing facility? If your answer is in the affirmative, would the property become subject to real estate taxes and the income be considered `unrelated’ for income tax purposes?
“3. Can the University lease or sell Wellers Hall or similar buildings to another State agency, non-state non-profit agency, or a private profit-oriented organization for purposes of providing an elderly housing facility?
“4. If the University can sell or lease Wellers Hall or similar buildings, must the proceeds be sufficient to guarantee the University’s debt service payments for the life of the lease with Wisconsin State Agencies Building Corporation?”
The answers to questions 1 and 2 are “yes” and “no,” respectively, for the reasons stated in my letter to Mr. Hill.
The answer to question 3 is that the University of Wisconsin System can sell the property, assuming that it is no longer needed for educational purposes. I have assumed the University of Wisconsin System has concluded there no longer is a need for this building as a student dormitory, or for any other educational purpose. If the building still can fulfill an educational need, I assume the University of Wisconsin System would not even be contemplating the possibility of such a conversion. If my assumptions are correct, it is my opinion that the building, and the land upon which it rests, must be sold and not leased. If the University of Wisconsin System concludes the building can no longer fulfill an educational purpose, it should be disposed of by outright sale, as provided under sec. 37.02 (1), Stats.
The proceeds of any sale must be sufficient to guarantee the payment of the bonds issued for the initial construction of the building, and upon such terms as are agreeable to the Wisconsin
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State Agencies Building Corporation and the holder of those bonds, H.U.D.
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