One week after a California investment firm bought ACT Inc. — morphing the longtime Iowa City-based nonprofit college testing company into a for-profit enterprise — most of its campus is being sold, but ACT will remain as a tenant.
As part of the restructuring, a related nonprofit was created and maintained ownership of the east side Iowa City campus that has housed ACT Inc. since the 1980s. Now the nonprofit has entered into an agreement to sell the land to Iceberg Development Group of West Des Moines, a 10-year-old firm led by Jim Bergman that in the past has received state incentives for housing projects.
A Flourish map
Officials didn’t share details of how much the campus is selling for, but said Iceberg Development plans to “create a community that offers a variety of housing options while prioritizing partnerships with nonprofit organizations that align with ACT’s historic mission and ensure the betterment of the community.”
“The high-level vision for the development of the property includes a variety of uses, primarily focused on education and housing, in line with these community priorities,” according to a news release.
The for-profit ACT Inc. will continue leasing space for its operations on the campus, as will its new separate nonprofit named “IntermediaryEd.”
“ACT will continue to maintain an ongoing presence in the community and continue operations from the ACT campus in Iowa City as a tenant,” according to a news release.
The entrance to the ACT Inc. campus in Iowa City is seen in 2017. (Gazette photo)
In April, when ACT announced a partnership with private equity firm Nexus Capital Management LP of Los Angeles that would move it forward as a for-profit company using ACT’s name and brand, it indicated proceeds from the partnership would fund the “continuation of an Iowa nonprofit organization that will be headquartered in Iowa City.”
“The nonprofit organization will conduct programs, services, and research focused on education and workplace success,” according to ACT’s partnership announcement in April, adding the new nonprofit “will also retain an investment in the new public benefit corporation and have direct representation on ACT’s board of directors.”
ACT Inc. — first incorporated as an Iowa-based nonprofit in 1960 — officially changed its name with the Secretary of State’s Office earlier this month to IntermediaryEd.
Precipitating the ACT changes have been massive shifts in the standardized testing industry — aggravated by the COVID-19 pandemic, when many colleges and universities went test-optional, meaning they stopped requiring ACT or SAT scores for admission.
Assessments show 300,000 fewer students took the SAT in 2023 than in 2019, and 400,000 fewer took the ACT over the same span, according to Inside Higher Education.
Financially, public records show ACT lost nearly $61 million in 2020; $6 million in 2021; and $12 million in 2022. The last year ACT reported a surplus was in 2018, of $21.3 million.
Last year, it laid off more than 100 employees and began selling buildings on its campus. The Iowa City Community School District in 2022 bought a building for $8.7 million to provide space for professional development, online learning programming and career and technical education.
Earlier this year, University of Iowa Health Care received Board of Regents approval to lease 65,760 square feet of warehouse, office and support space on the ACT campus for its pharmacy services group. The 20-year agreements for two adjoining facilities have the university paying $31,442 a month for the warehouse space and $18,750 a month for the office space — or a combined $602,304 a year, amounting to $12 million over 20 years.
Those UIHC leases and the school district building are unaffected by this recent sale — which includes the rest of the campus’ 385 acres and main buildings, according to Josh Seamans, senior vice president for the Cushman & Wakefield commercial advisers group involved in the transaction.
Although officials didn’t share sale specifics, the Johnson County Assessor’s Office reports the largest ACT parcel is valued at $19.7 million — down from $22.4 million in 2022.
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As part of the restructuring, a related nonprofit was created and maintained ownership of the east side Iowa City campus that has housed ACT Inc. since the 1980s. Now the nonprofit has entered into an agreement to sell the land to Iceberg Development Group of West Des Moines, a 10-year-old firm led by Jim Bergman that in the past has received state incentives for housing projects.
A Flourish mapOfficials didn’t share details of how much the campus is selling for, but said Iceberg Development plans to “create a community that offers a variety of housing options while prioritizing partnerships with nonprofit organizations that align with ACT’s historic mission and ensure the betterment of the community.”
“The high-level vision for the development of the property includes a variety of uses, primarily focused on education and housing, in line with these community priorities,” according to a news release.
IntermediaryEd
The for-profit ACT Inc. will continue leasing space for its operations on the campus, as will its new separate nonprofit named “IntermediaryEd.”
“ACT will continue to maintain an ongoing presence in the community and continue operations from the ACT campus in Iowa City as a tenant,” according to a news release.
In April, when ACT announced a partnership with private equity firm Nexus Capital Management LP of Los Angeles that would move it forward as a for-profit company using ACT’s name and brand, it indicated proceeds from the partnership would fund the “continuation of an Iowa nonprofit organization that will be headquartered in Iowa City.”
“The nonprofit organization will conduct programs, services, and research focused on education and workplace success,” according to ACT’s partnership announcement in April, adding the new nonprofit “will also retain an investment in the new public benefit corporation and have direct representation on ACT’s board of directors.”
ACT Inc. — first incorporated as an Iowa-based nonprofit in 1960 — officially changed its name with the Secretary of State’s Office earlier this month to IntermediaryEd.
Unaffected by the sale
Precipitating the ACT changes have been massive shifts in the standardized testing industry — aggravated by the COVID-19 pandemic, when many colleges and universities went test-optional, meaning they stopped requiring ACT or SAT scores for admission.
Assessments show 300,000 fewer students took the SAT in 2023 than in 2019, and 400,000 fewer took the ACT over the same span, according to Inside Higher Education.
Financially, public records show ACT lost nearly $61 million in 2020; $6 million in 2021; and $12 million in 2022. The last year ACT reported a surplus was in 2018, of $21.3 million.
Last year, it laid off more than 100 employees and began selling buildings on its campus. The Iowa City Community School District in 2022 bought a building for $8.7 million to provide space for professional development, online learning programming and career and technical education.
Earlier this year, University of Iowa Health Care received Board of Regents approval to lease 65,760 square feet of warehouse, office and support space on the ACT campus for its pharmacy services group. The 20-year agreements for two adjoining facilities have the university paying $31,442 a month for the warehouse space and $18,750 a month for the office space — or a combined $602,304 a year, amounting to $12 million over 20 years.
Those UIHC leases and the school district building are unaffected by this recent sale — which includes the rest of the campus’ 385 acres and main buildings, according to Josh Seamans, senior vice president for the Cushman & Wakefield commercial advisers group involved in the transaction.
Although officials didn’t share sale specifics, the Johnson County Assessor’s Office reports the largest ACT parcel is valued at $19.7 million — down from $22.4 million in 2022.
ACT creates new nonprofit, sells Iowa City campus to developer
One week after a large California investment firm bought ACT Inc. – morphing the longtime Iowa City-based nonprofit testing company into a for-profit enterprise – a separate nonprofit organization the new ACT conglomerate promised to maintain retained the Iowa City campus and now is selling it.
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