The University of Kentucky will buy the Lexington Theological Seminary's 7-acre campus on South Limestone for $13.5 million, officials announced late Monday.
The UK Board of Trustees is expected to approve the deal at its meeting Tuesday, adding room for expansion on the west side of Limestone. The seminary has moved almost all of its instruction online since 2011 and plans to relocate to a smaller campus in Lexington.
"When high-quality space adjacent to your campus becomes available, the responsible thing is to explore the possibilities," UK President Eli Capilouto said. "The Lexington Theological Seminary space represents great potential for the university as we grapple with how to grow and manage within our existing footprint."
In the immediate future, UK plans to use seminary buildings as "swing space" for the Gatton School of Business as it starts a major renovation and expansion across the street.
The 63-year-old seminary property includes 131,000 square feet of built space, including four classroom buildings, 44 apartments, 16 townhouses, a maintenance building and a parking lot.
For the past 20 years, about 75 percent of the seminary's housing has been rented to UK students, said seminary President Charisse Gillett. UK officials said they would honor any current leases made with Lexington Theological Seminary for the next academic year, then fold those spaces into UK Housing.
Gillett said the seminary's move — which she hopes will be to a downtown location — is part of the school's new identity.
"Change for every academic institution is inevitable, and change has been our mantra," she said Monday. "This is another step in our transformation and revitalization."
Eric Monday, UK's vice president of finance and administration, said the sale would be a cash deal, paid for with $13.5 million in excess funds created by increased enrollment last fall. Going forward, recurring money from increased enrollment will be used to soften budget cuts across campus, Monday said.
Bob Wiseman, UK's vice president for facilities, said the seminary's buildings probably would become a temporary home for various programs during the next five to 10 years as UK embarks on construction and renovation projects throughout campus.
Wiseman said the seminary's academic buildings and housing spaces were in good physical shape.
"With the amount of building we are doing, we have a great need for swing space," he said. "This is very helpful for short-term."
In addition, the 284-space parking lot will help ease UK's chronic parking woes, he said.
Wiseman said the new property would be folded into UK's ongoing master planning process, but there are no immediate plans to designate a permanent use for the land. Although the property is across the street from UK's law school, which is looking to expand, "you couldn't easily reconfigure the space for a law school," he said.
Lexington Theological Seminary was founded in 1865 as part of the Christian Church (Disciples of Christ). Gillett said the seminary once was on the campus of Transylvania University, then moved closer to UK when it became a residential seminary.
The 2008 economic downturn hit the seminary's finances and enrollment hard, pushing the school to put much of its instruction online by 2011.
Today, enrollment has climbed to about 110 students, 55 of whom are full-time. Most still seek a master's degree in divinity, Gillett said, but a growing number of students are seeking certificates in pastoral ministry.
Half the coursework is online and half is done in congregations. Students also come to campus twice a year for two weeks of intensive residential instruction.
The seminary's 23 full-time employees were notified about the sale Monday.
Gillett said the $13.5 million from the sale of the property would help establish a new location for the seminary and give the school more financial stability.
Linda Blackford: (859) 231-1359. Twitter: @lbblackford.