A bargain hatched by two school administrators over lunch will give a private Michigan university space to grow and local students a significant perk if they attend their hometown college.

Finlandia University in Michigan’s Upper Peninsula will receive an athletic field and a classroom building that’s no longer needed by the public schools in Hancock, a former mining town of 4,900. In exchange, for at least the next 12 years graduates of Hancock Central High School who qualify for admission to Finlandia will get free tuition.

“I haven’t heard of a partnership quite like this one,” said Tony Pals, spokesman for the National Association of Independent Colleges and Universities.

He said many creative ideas have surfaced to help students afford the escalating price of higher education, but the university’s tuition-for-property swap is unique.

Twenty-five of Hancock’s 55 graduates from last spring have accepted Finlandia’s offer and are enrolled for the fall semester. Previously, fewer than 10 members of the typical Hancock senior class have attended the university, where tuition officially runs nearly $18,000 a year — though routine discounts reduce the average cost to about $12,700.

When officials announced the plan earlier this year, skeptics thought there must be a catch.

“But we spent an hour giving an overview and answering questions,” said John Sanregret, the high school principal. “After the meeting, there were parents hugging one another with tears in their eyes, saying, ‘Can you believe this? We’ll be able to send our kids to college.'”

Among the delighted mothers was Julie Ruotsala, who had wondered how she and her husband could handle tuition payments for two daughters at once.

One already attends Northern Michigan University in Marquette, 100 miles away. Another was considering Northern Michigan, but instead will live at home and study physical therapy at Finlandia. Ruotsala figures over four years, the arrangement will save them $100,000 in tuition, room and board.

“We were just ecstatic,” she said. “What great timing for us.”

Another grad, 18-year-old Margo Anderson, was planning to attend a community college 110 miles away but will instead study graphic design at Finlandia.

“That way, I can get a four-year degree and maybe have a better chance at getting a job,” she said.

Sanregret and the university’s president, Philip Johnson, came up with the idea while lunching together in March 2008. Hancock was preparing to move its middle school students from a four-story, 85-year-old building to a new wing at the high school.

Johnson said the 73,000-foot structure next to the university would be ideal for Finlandia.

The school, founded in 1896 by Finnish immigrants during the copper mining boom in the western Upper Peninsula, wants to boost enrollment from 550 to about 700. Its plans largely called for expanding health sciences and athletics programs, but the small campus was hemmed in by its downtown location.

The 10-acre sports field, which Finlandia will share with the high school, provides a home venue for its teams — including a new Division III football squad that will begin play in 2012.

Although Hancock officials hadn’t put a price on the building, Finlandia administrators figured they couldn’t afford to buy it.

Sanregret suggested the university instead offer tuition-free education to graduates from Hancock, a community that — like most of the Upper Peninsula — has languished economically since the mining industry faded decades ago. Johnson quickly agreed. A joint committee ironed out the details.

Finlandia is seeking about $9 million in donations to upgrade the athletics field and the building, scheduled to be occupied by fall 2011. It needs labs, faculty offices and other improvements so it can house the College of Health Sciences, which includes programs such as nursing and physical therapy assistance.

The gym and auditorium in the refurbished building will be open for public use, while area hospitals will get access to labs for training.

“We want to be a more meaningful partner in growing this area and finding ways to help it thrive,” Johnson said.

Hancock students who accept the free tuition offer will be required to give Finlandia any federal or state grant money they receive. Even so, the university expects to write off roughly $4.2 million in lost tuition payments from Hancock graduates over 12 years, said Nick Stevens, executive vice president for business.

But the deal should pay off simply by helping Finlandia expand, which eventually will attract more paying students, Stevens said.

“They see enrollment going up and their peers coming here and decide they want to be a part of it,” he said.

The university may continue the tuition-free offer beyond 12 years if an outside funding source can be found, Johnson said.

Aside from the property, Finlandia is reaping another benefit: hometown goodwill. Being a good neighbor makes sense particularly when nearly 70 percent of its students hail from the Upper Peninsula and 40 percent from the four nearest counties.

The deal already may be spurring economic development, Mayor Bill Laitila said. Real estate agents are hearing from families interested in moving to Hancock because of the Finlandia tuition break.

“It’s great to have people coming here,” Laitila said, “instead of just shipping our people and money elsewhere.”

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