MARLBORO — The Vermont attorney general's office (AGO) has issued a “notice of no objection” to the planned sale of the former Marlboro College campus to an entity owned by the Marlboro Music Festival in a transaction totaling $4.34 million.
That nonprofit entity - Potash Hill, Inc. - will acquire the property's 533 acres and 52 buildings from Democracy Builders Fund, a New York City–based nonprofit that purchased the campus in the summer of 2020, only to have its plans for a secondary/post-secondary hybrid educational institution come to naught amid the pandemic, community protests, questions about DBF's financial resources, and the filing of three federal charges against its driving force, Seth Andrew.
Andrew stands accused of wire fraud, money laundering, and making false statements to a bank in connection with his alleged theft of more than $218,000 from a charter school network he founded.
Vermont law provides that, when a nonprofit proposes to transfer “all or substantially all” of its assets to another nonprofit, as in this case, the AGO must review the proposed sale to ensure, among other criteria, that the transaction is “in accordance with” the charitable purposes of the nonprofit making the transfer.
The Sept. 2 notice finds that DBF's board of directors “unanimously resolved to undertake the proposed sale after determining that, among other factors, it was not economically feasible for [DBF] to pursue its mission and operations on the relevant property.”
According to the purchase and sale agreement, Potash Hill will pay DBF $2.74 million, release DBF from a $1.5 million loan obligation to the music festival if certain conditions are met, and pay approximately $100,000 to manage the campus between the date of the contract and the closing date, according to the AGO's notice.
The closing date has not yet been determined.
As part of the transaction, the music festival has committed to keeping 130 acres of the campus open to the public as an ecological preserve.
DBF represented to the AGO that it will use the proceeds of the sale to pay off creditors, and to give half of any remaining funds to the music festival “for its Vermont-based programs, while giving the other remaining half to a purpose consistent with DBF's bylaws and mission,” the AGO's notice stated.
David N. Dunn, the Brattleboro-based attorney for the music festival, said last week that he was in the midst of preliminary work leading up to the closing of the transaction.
“We're still shooting to close [...] by the end of September,” he said. “Because of the complexity of the transaction, all the parties want to make sure we get everything right.”
“We're pleased that we don't see any more regulatory hurdles, and we're pleased that we're moving ahead,” the music festival's president, Christopher Serkin, said in a telephone interview.
Democracy Builders' attorneys could not be reached for comment.