Cash-strapped Metropolitan College of New York is planning to sell its Manhattan campus to the City University of New York for $40 million, a regulatory filing first reported by Bloomberg shows.

The two institutions signed a letter of intent on Monday, according to the regulatory filing, which notes that proceeds will be used to pay off a portion of MCNY’s $67.4 million outstanding debt. 

MCNY agreed to sell the site last year as part of a forbearance agreement with bondholders.

Metropolitan College of New York has struggled to keep up with debt in recent years and failed to maintain the agreed-upon ratio of liquid assets, according to a regulatory filing from July. The small college enrolled fewer than 500 students, according to the latest state data, and posted a deficit of more than $7 million in fiscal year 2023, publicly available financial data shows.

CUNY is purchasing 101,542 square feet across three floors in the shared building, which officials told Bloomberg they intend to use as a temporary site for the Hunter-Bellevue School of Nursing amid ongoing construction projects. The sale will require approval from bondholders as well as Metropolitan College’s accreditor, the Middle States Commission on Higher Education.