The bankruptcy auction for Dowling College’s 105-acre Brookhaven campus in Shirley adjourned without a winner Wednesday, after hours of creditor deliberation.
Bidding took only a few minutes Wednesday morning, with a high bid of $10.2 million, though creditors for the defunct school did not come to a decision, said Sean Southard, an attorney representing Dowling in its Chapter 11 bankruptcy proceedings.
Three bidding groups, labeled groups A through C, met at the law offices of Certilman Balin Adler & Hyman in East Meadow for the auction of the Shirley campus. The starting bid, determined by initial sealed offers made before Wednesday, was $10 million.
The bidders’ identities will remain sealed until a winner is selected by a board that includes representatives of Dowling’s creditors.
Board trustees and creditors retain other options besides selecting a winning bidder, including accepting none of the bids, seeking to rezone the property, or remarketing it, said Emilio Amendola, co-president of Melville-based A&G Realty Partners, the firm marketing the site.
Price is not the only consideration, Southard said.
“Sometimes just the highest monetary bid doesn’t make it the best bid,” he said. Considerations such as a bidder’s “likelihood of consummating the transaction” are taken into account.
The discussions about the bids are ongoing and “complicated,” he said. “What makes a bankruptcy auction interesting is that no two are alike.”
The property includes a 70-room dormitory, an athletic complex, a two-building office and classroom complex, and a 7,500-square-foot airplane hangar.
The liberal arts college ran out of funds, lost its accreditation and closed in 2016. Dowling said it had $54 million in long-term debt and filed for Chapter 11 bankruptcy protection in November 2016.
Dowling’s estate faced 626 claims totaling $65.8 million filed in bankruptcy court in Central Islip by creditors, vendors, college officials, faculty and staff.
The college’s 25-acre Oakdale campus, which includes a mansion that belonged to the Vanderbilt family, was put up for auction in April. In August, NCF Capital Ltd., a Hong Kong company, purchased that property for $26.1 million after the top bidder in the auction, Princeton Education Center LLC, failed to close on its $26.5 million offer.
The Oakdale campus is now owned by Mercury International LLC of Delaware, a company affiliated with NCF Capital, according to court documents.
The Shirley campus benefits from its proximity to Brookhaven Calabro Airport, but it is “in a residential market that’s not as strong as the Oakdale market,” said David Pennetta, executive director of brokerage Cushman & Wakefield’s Melville office. Moreover, properties on eastern Long Island tend to command lower purchase prices, he said.
“Generally, as you go further east, until you start getting to the Hamptons, there’s a drop in price no matter what sector of real estate you’re in,” he said.
The property lends itself to redevelopment into a potential multifamily or senior housing development, Pennetta said.