LOUISVILLE, Ky. (WDRB) – The University of Louisville Real Estate Foundation has repaid about $28 million of a controversial $38 million loan it received from the university last year.

The loan, which was not approved by the university’s Board of Trustees, was first reported by WDRB News on June 1. It was one reason three former trustees refused to approve the university’s proposed budget and tuition increases at a meeting on June 2.

The real estate foundation is a creation of the U of L Foundation, which oversees the university’s $680 million endowment and has developed several office buildings around Louisville.  

Jason Tomlinson, the foundation’s chief financial officer, disclosed the repayment during a meeting of the U of L Foundation’s finance committee on Thursday.

He said the university has earned $228,000 in additional interest by allowing the real estate foundation to use the money instead of parking it in a short-term bank account.

“It was a positive use of cash management and cash policies,” he said during the meeting. (Tomlinson continued to say that the deal was not a loan but a “cash management policy.” However, the university’s independent auditors called it a loan).

Under the deal approved July 1, 2015 by Tomlinson and U of L / Foundation President James Ramsey, the real estate foundation has three years to use the $38 million. Only interest payments are required until the three-year window closes.

The $28 million repayment comes less than a year into the transaction. In an interview, Tomlinson said the repayment was prompted by the availability of other foundation funds and not by the negative publicity.

“The intent was only ever to be a period of time,” he said.

A little less than $10 million in university funds remains outstanding with the real estate foundation, he said.

Once that is repaid, the real estate foundation does not intend to tap the university money again, he added. 

Copyright 2016 WDRB News. All rights reserved.