LOUISVILLE, Ky. (WDRB) --  In 2014, the University of Louisville announced what it called one of the largest gifts in school history: $10 million from NTS Corp. Chairman J.D. Nichols.

The university renamed its downtown innovation park after Nichols and named him its 2015 alumnus of the year.

On Dec. 29, Nichols began to make good on his pledge, but no cash changed hands.

Instead, Jefferson County property records show Nichols – through an entity called NTS Realty Holdings Limited Partnership – gave the retail building housing Bed, Bath & Beyond at 996 Breckenridge Lane to the U of L Real Estate Foundation, an arm of the university’s nonprofit foundation.

U of L received the portion of the building rented to Bed, Bath & Beyond, which is valued at $7 million, according to the deed.

University spokesman John Karman confirmed that the building donation represents Nichols’ “initial payment” toward his $10 million pledge. The rest of the pledge will be fulfilled over the next five years, Karman said.

The foundation will collect rent from the Bed, Bath & Beyond while deciding what to do with the building, Karman said.

“We need to evaluate it and its income potential before determining whether to sell it or maintain it,” Karman wrote in an email. “If we sell it, that would occur after a thorough review and examination of market demand. We would also study the proper timing in order to maximize the return to the foundation. This is our approach with all property donated to the foundation.”

Dr. Robert Hughes, chairman of the U of L Foundation’s board of directors, said Nichols’ gift is no less valuable in the form of real estate than cash.

“It really doesn’t matter; if it’s been valued at $7 million, then $7 million is $7 million,” Hughes said.

The foundation has options in extracting value from the building, he added.

“You can hold onto it and let it appreciate, or you may decide you don’t want to do any landlord business and sell it right away,” he said.

Karman said the $7 million value was established by an independent appraisal – a requirement with real estate donations to the foundation.

Constructed in 1999, the 50,000-square-foot building is assessed at $2.2 million for tax purposes, according to Jefferson County PVA records. In 2004, Nichols put a $1.9 million value on the property when transferring it between companies he controlled, according to deeds.

Karman said U of L officials don't know whether they will seek an exemption from property taxes for the building. Nichols' company paid just over $23,000 in taxes on the building last year, records show.  

Nichols, who lives in Colorado and in Florida, was in the Bahamas on Friday and unavailable for comment, his assistant said.

It’s unclear how the remaining $3 million of Nichols’ pledge will be fulfilled. WDRB has requested, but not yet received, agreements governing the pledge from the U of L Foundation under the Kentucky Open Records Act.

The U of L Foundation has had a long relationship with Nichols’ firm that has been financially beneficial for both.

The foundation and NTS co-own three new office buildings -- 500, 600 and 700 N. Hurstbourne Parkway – on U of L’s Shelby campus, which command some of the highest rents in the city.

On Dec. 22, the foundation designated NTS as its “development partner” for the remainder of its Shelby Campus, the downtown campus named after Nichols and its planned engineering park just south of the J.B Speed School of Engineering.

Nichols also made headlines last year when he offered to personally fund Ramsey’s incentive pay from the foundation – an effort to quell controversy over Ramsey’s compensation.  The foundation board declined Nichols’ offer.

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