NEWPORT, R.I. — Salve Regina University closed a $3.4 million purchase of a private school’s 19 acres of buildings and grounds this week.
The long-term sale and leaseback agreement, which closed Tuesday between Salve and the Pennfield School, will eliminate Pennfield’s debt and allow the Pre-K-8 school to invest in academic programming, teacher support, and building the school’s endowment.
The school, which is located in Portsmouth, R.I., had $3.4 million in debt from two bonds issued by the Rhode Island Health and Education Building Corporation. The bonds financed building the school and campus in 2004, according to Rob Kelley, the head of Pennfield.
The deal provides Salve with a complementary asset and stable cash flows, and a potential for new opportunities to coordinate internships and joint programs with the private school. The university reported in June 2020 that its endowment had exceeded $63.2 million.
Bill Hall, Salve’s chief financial officer, would not say how much the university will receive in rent each month, but said that the price was “below market.” Eventually, “in about 10 years,” Hall said, the rent will phase to market rent.
The total appraised value of Pennfield’s buildings is approximately $9 million.
Hall, whose children previously attended the school, told the Globe that he and Dr. Kelli J. Armstrong, Salve’s president, toured Pennfield’s campus last year, and the leaders at both schools continued communication. Hall said that Pennfield’s administration made it clear that the school’s debt was preventing them from further improving academic programs.
From this deal, Pennfield’s operational investments will also support the school’s after-school and enrichment programs, workshops, summer camps and various clubs offered to students, staff, parents and other community members, according to Kelley.
The Pennfield School was founded in 1971, and this upcoming school year will mark its 50th anniversary as an independent private day school. It’s 19-acre campus is next to Aquidneck Island Land Trust’s Sakonnet Greenway Trail and Glen Farm.
“For five decades, the dedicated faculty and staff of The Pennfield School have been providing families with a high-quality educational experience,” said Armstrong. “The mission statements of both our institutions are well-aligned and I look forward to our future together on Aquidneck Island as we work to create the best possible learning environments for our respective students.”
Kelley said future collaboration between the schools for faculty and students are “vast and so very exciting,” but are still in the planning phase. Hall said Salve’s education majors might be able to intern at Pennfield in the future because of this deal.
“I am now able to focus the majority of my time to improving and building new academic programs, while staying true to our mission,” said Kelley.