The University of Maine System Board of Trustees approved $20 million for the purchase of a downtown Portland building on Monday.
The building, located at 7 Custom House St., has been leased with an option to purchase by the UMaine System since 2023. The space has housed the University of Maine School of Law and Maine Graduate and Professional Center, or Maine Center.
The lease’s option to purchase the building opens on Oct. 1, but an earlier purchase time can be discussed with the owner, according to meeting documents.
The building was valued at $20.1 million in 2023 when the system entered the lease, according to documents.
The $20 million in funding comes from the Harold Alfond Foundation, which has helped fund many of the construction projects across the University System. In September, the Board approved renaming the Maine Center the Alfond Exchange, but a public name change has not been made yet, according to meeting documents.
The purchase follows UMaine asking its departments to slim their budgets by 7% because of an $18 million budget shortfall projected for the next fiscal year. Cuts have been asked for in previous years, spokesperson Samantha Warren said in December.
Payments from the Alfond Foundation will be made until the loan for the Portland building is paid off in 2030, said Seth Goodall, CEO of Maine Center Ventures and executive director of the Graduate and Professional Center.
Board members questioned if buying an aging building was the right thing for the system to be doing, despite Vice Chancellor for Finance and Strategic AI Integration Ryan Low calling the purchase a “remarkable opportunity.”
A sustainability report on the Maine Center is set to be presented to the Board in March, but the vote for purchase was approved and finalized on Monday.
“I know there’s a lot of enthusiasm, excitement, I share in that. I do just worry as a fiduciary of the board that we’re getting that sustainability report in March and have to make this vote today,” Trustee Elise Baldacci said on Monday.
Similar concerns that the purchase of an old building would create obligations for future trustees were shared by Board Chair Trish Riley.
The report is in progress and has uncovered no outstanding issues past when the payments are finished in 2030, Low said.
The funding for the downtown building was discussed immediately after Board members approved a plan that included the demolition of a 192-year-old building on UMaine’s campus because it had become too expensive to maintain.
The purchase gives the UMaine System access to space beyond what the program currently uses.
Commercial spaces make up nearly a third of the building and will generate revenue for the UMaine System, Goodall said. The purchase also includes the land under it and the connected building at 300 Fore St. that the university already owns and uses to house the UMaine Law School.
Owning the land gives the UMaine System the ultimate say in what the area can be used for, Goodall said.
“We’re seeing the Law School flourish, and the Maine MBA is housed there as well as the related programming, so we’ll have control over all of that and control over that city block,” Goodall said.
The UMaine Law School, which moved to 300 Fore St. in 2023, has seen a 7% increase in student enrollment over the past five years, according to the university. That increase brought the largest class, the class of 2027, in nearly two decades to the school.
Purchasing the building will allow the Law School to expand in the future and also gives extra space for people using the area now, Chancellor Dannel Malloy said.
“The additional space will allow the law school to grow, if that is in its future, but it also allows us to use space that better meets the requirements of the faculty and students in part of the building as well,” Malloy said on Monday.