Procedure 6.7.3 Use of Non-College and University Facilities (College or University as Lessee/Tenant).

System Procedures
Chapter 6 - Facilities Management

Part 1. Purpose
This procedure guides colleges’ and universities’ use and leasing of land and buildings not owned by the State of Minnesota under the jurisdiction of Minnesota State Colleges and Universities (“Minnesota State”), consistent with state law, Board of Trustees policies, system procedures, and the strategic mission of Minnesota State.

Part 2. Definitions
For the purposes of this procedure only, the following words and terms are defined as follows.

College or University
A member institution of Minnesota State, a public higher education system.

Real Estate Manager
The primary contact within the Minnesota State system office for all Facilities Agreements.

Facility or Facilities
Land, building or other improvements on property neither owned nor under the jurisdictional control of Minnesota State that is the subject of a Facilities Agreement.

Facilities Agreement
An agreement that governs the terms of use and occupancy of land or improvements, neither owned nor under the jurisdictional control of Minnesota State, for the benefit of a college, university, or the system office.

Lease
An agreement where a college or university user shall have the right to exclusive use and possession of space in a Facility (including land) not owned by Minnesota State for a defined term in exchange for the payment of rent and/or other consideration.

Leased Premises
The extent of the facilities possessed and controlled by the Lessee under the terms of a Lease, and may include any parking for the exclusive use of the Lessee’s staff, students, clients, guests and invitees.

Leasehold Improvements
Improvements made to the Leased Premises prior to Lessee’s occupancy and necessary for the Lessee to use the facilities as described in a Facilities Agreement. Leasehold Improvements permanently attach to the facility and remain with the Facility at the end of the lease term.

Lessor or Landlord
The legal entity or individual unrelated to Minnesota State that leases land, building, or other real property interest to a college, university or the system office.

Lessee or Tenant
The State of Minnesota by and through the Board of Trustees of the Minnesota State Colleges and Universities.

Minnesota State Colleges and Universities (Minnesota State)
Minnesota State Board of Trustees, Office of the Chancellor, its colleges and universities, and the system office. The legal entity established and authorized to enter into Facilities Agreements as Lessee or Tenant.

Minnesota State/System Office
The central administrative and staff office under the direction and supervision of the chancellor, which includes the appropriately delegated staff members who have authority to negotiate, sign, and/or approve Facilities Agreements.

Use
The occupation, possession, or utilization of land, building space, or a building to accommodate a college- or university-sponsored program or event that is not otherwise accomplished on a Minnesota State campus.

Use Agreement
A contract where a college or university has the right to use or possess space for a fee, but does not enjoy the rights and privileges associated with a lease. A Use Agreement is more transient, and is usually terminable at will.

Vice Chancellor for Finance and Facilities
The Vice Chancellor for Finance and Facilities for Minnesota State, unless otherwise noted, who has authority to sign and approve all Facilities Agreements on behalf of the system.

Part 3. Applicability
This procedure applies when a college, university or the system office seeks to use off-campus facilities or facilities otherwise owned by a private or public third-party, including other government entities. A written and fully signed Facilities Agreement is required prior to occupancy by a college or university for facilities not owned by Minnesota State.

Part 4. Authority
Pursuant to Minnesota law, the Board of Trustees of the Minnesota State Colleges and Universities may use or lease facilities owned and controlled by others, consistent with board policies, system procedures, and applicable state law.

Subpart A. Policy
Board Policy 6.7 Real Estate Transactions and Management requires Minnesota State to approve all real estate transactions, which includes use of facilities by the colleges, universities, and system office subject to the limitations identified herein.

Subpart B. Delegated authority for college and university presidents; Real Estate Manager
College and university presidents and the Vice Chancellor for Finance and Facilities may enter into Facilities Agreements off campus that are valued at $100,000 or less and for five (5) years or less in length (including all renewal options), using Minnesota State standard forms. See Procedure 1A.2.2 Delegation of Authority, Part 1. The college or university shall maintain copies of all Facilities Agreements. Agreements expected to last one year or longer must be provided to Minnesota State Real Estate Services after execution. Facilities Agreements lasting less than one year may be provided at the discretion of a college or university or upon request by Minnesota State.

Subpart C. Legal entity.
The college, university, or system office as Lessee/Tenant must be identified in all Facilities Agreement as the “State of Minnesota, by and through the Board of Trustees of the Minnesota State Colleges and Universities, on behalf of [the college or university or system office].”

Part 5. Leasing Thresholds and Approval Requirements
Board Policy 5.14 Contracts, Procurements, and Supplier Diversity provides that contracts, including real property leases, must not exceed five years, including renewals, unless otherwise provided for by law or approved by the chancellor or the chancellor’s designee. Board approval is required for Facilities Agreements that exceed the value threshold in Board Policy 5.14 (including all options to renew). Vice Chancellor for Finance and Facilities approval is required for all Facilities Agreements with terms that: a) exceed five (5) years, or b) the total value exceeds $100,000s.

Part 6. Establishing Facilities Off-Campus.
Before entering into any arrangements to use off-campus facilities, the college or university shall consult their strategic academic, enrollment, financial, and facilities plans and the Minnesota State Vice Chancellor for Finance and Facilities. Using off-campus facilities must be consistent with the institution’s comprehensive facilities plan. At a minimum, a college or university should consider the following before leasing off-campus facilities:

Total cost of the lease and the impact of the lease on the institutional operating budget over the term of the lease.
Alternatives to a lease, including remodeling and consolidating and making better use of existing campus space.
Alignment of the length of the need with the length of the agreement.
Logistical issues associated with being off campus including transportation, support services (facilities, information technology) and general proximity and need for contiguous space

Subpart A. Academic programs
A college or university seeking to add an academic program in an off-campus location shall follow the process established by Minnesota State Academic and Student Affairs System Procedure 3.36.1 Academic Programs and ASA-2008-13 – Institutional Intent to Add an Off-Campus Location. All off- campus facility use requires a Facilities Agreement.

Subpart B. Other Programs or administrative space
A college or university shall notify Minnesota State before negotiating an off-campus Facilities Agreement , whenever the Facilities Agreement is expected to exceed the thresholds identified above. All off-campus facility use requires a Facilities Agreement.

Subpart C. Institutional request to system office
When threshold amounts are reached, the institution shall make a request to Minnesota State Real Estate Services to lease off-campus facilities. The request shall include:

Space Type (office, warehouse, lab, storage, etc.)

Funding (source and type)

Description of the Property to be leased, including property address,

Gross, usable and rentable square footage,

Lessor/Owner name and address,

Term (start and end date) with any options to renew

Rent, including all estimated operating expenses (if not a gross lease)

Explanation of the need for such space, rent rate, including operating costs, lessee improvements or any additional costs associated with the lease.

Use of the Facility

Parking requirements.

Telecommunication requirements.

Number of staff assigned to the location.

Estimate of moving costs.

Subpart D. Facilities agreement templates and copies
Minnesota State Real Estate Services shall maintain Facilities Agreement templates approved by the Office of General Counsel and/or Attorney General’s Office for college and university use. Copies of all fully executed Facilities Agreements lasting one (1) year or longer must be provided to the system office - Real Estate Services. Copies of Facilities Agreements lasting less than one (1) year must be provided upon request.

Subpart E. Reporting obligation
Colleges and universities shall annually report all Facilities Agreements to Minnesota State currently in effect as of June 30.

Part 7. Leasehold Improvements
The Owner shall be responsible for completing any leasehold improvements to the Facility. The Lease may be structured to amortize the leasehold improvement costs during the term of the Lease. Major capital maintenance and repairs of the Facility (i.e. roof, building structure, HVAC) must remain a building owner’s responsibility in any Facilities Agreement.

Part 8. Other Governmental or Public Property
Colleges and universities often use property owned and controlled by another state agency or another governmental entity, such as a city, county, school district or the University of Minnesota. Minnesota State shall enter into a Facilities Agreement with these governmental or public entities. Colleges and universities shall consult with the Minnesota State system office before proceeding with using space in a government or public property.

Part 9. Termination Language
All Facilities Agreements must be subject to cancellation upon thirty (30) days written notice by the board for any reason except the lease of other non-state-owned land or premises for the same use.

Part 10. Contact
The primary contact person for this procedure and Facilities Agreements is the Minnesota State Real Estate Manager.

Procedure History:

Date of Adoption: 4/07/09
Date of Implementation: 4/07/09
Date of Last Review: 1/22/26

Date and Subject of Amendments:

01/22/26 – Full Review. Amendments include technical edits, updated position titles, and the application of new formatting and writing standards. Amendment added criteria for review/consideration when establishing off-campus facilities.

1/25/12 - The Chancellor amends all current system procedures effective February 15, 2012, to change the term "Office of the Chancellor" to "system office" or similar term reflecting the grammatical context of the sentence.

No additional History

Procedure 6.7.3 Use of Non-College and University Facilities (College or University as Lessee/Tenant).

Related Documents:

Procedure History: