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7/27/2019 A Pathway to Responsible Community Ownership of the Renaissance Center - August 7, 2013 Revision
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APathwaytoResponsibleCommunity
OwnershipoftheRenaissanceCenter
FundforDemocraticCommunities
OriginallypublishedMay24,2013
RevisedAugust7,2013
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APathwaytoResponsibleCommunityOwnershipofthe
RenaissanceCenter
AnoteontheAugust7versionF4DCfirstpublishedAPathwaytoResponsibleCommunityOwnershipoftheRenaissanceCenterinMay2013.Sincethattime,manyofourelectedleadershaveindicatedbyvoteandpubliccommentthattheyareanxioustogetoutoftheshoppingcenterbusinessasquicklyaspossible.UrgencytoselltheRenaissanceCenterhasledCounciltoconsideracompetingproposalthataskstheCityfor$2millionina0%fullyforgiveableloan.
InrespectoftheCitysurgencytoselltheshoppingcenter,wehaveupdatedthisversionofthePathwaytoincludeafourthscenarioinwhichtheCommunityLandTrustcouldpurchasetheShoppingCenterasearlyas2015,withtheCityplayingastrongerfinancingrole.Wenote,however,thattheCitysfinancingroleinthisnewscenariodoesnotasktheCitytomakeanyforgivableloans.Everydollarwillbepaidbackinthisandallscenarioswediscussinthisdocument.Why?BecausewewanttheCitytobeabletoreplicatethisapproachtoeconomicdevelopmentinotherpartsofthecommunity!
Inaddition,wehaveheardsomeCouncilmembersdiscussthesupportiverentarrangementthattheRenaissanceCommunityCooperative(RCC)hassoughtfromtheCityas a financiall ns pportable b rden that nderc ts the iabilit of the shopping center
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ExecutiveSummary
ThebestoptionforongoingcommunitywealthbuildinginNortheastGreensboroisfortheCitytoallowthecommunitytopurchasetheRenaissanceCenter.Thisdocumentmapsoutseveralpathwaystothatend.CommunityownershipismadepossiblebythedevelopmentofaCommunityLandTrust.Thiscommunity-ownedandcontrolledentitywouldbuytheshoppingcenterfromtheCityusingacombinationoffinancingincludingaccumulatedprofitfromtheoperationoftheRenaissanceCommunityCoop,financingfromSelf-HelpCreditUnionand,insomescenarios,loanassistancefromtheCityofGreensboro.DebtservicewouldberepaidusingthenetoperatingincomeoftheCenter,leavingabalanceoffundsavailabletofinanceothercommunityprojects.ThisanalysisincludesprovisionforvacancyratesandfulfillingtheexistingleaseagreementtoFamilyDollarStore.
Fourscenariosofpurchaseandownershipareincluded,eachhavingdifferentdatesforpurchaseofthepropertyandretirementofalldebt.Alsoanalyzedistherateandamountofaccumulationofcommunitywealthundereachscenario.Spreadsheetsareattachedthatsummarizethesescenarios.Thisdocumentalsolooksattheprocessofpreparationofthe
communitytoexercisetheresponsibilitiesofownershipthroughaCommunityLandTrust.
OurhopeisthatthisdocumentwillillustratepossiblepathwaystocommunityownershipoftheRenaissanceCenterandhelptheCityCounciltobeabletoevaluatecommunityownershipoftheRenaissanceCenterasaseriousoptionastheydecidethefateoftheRenaissanceCenter.
Background
Formorethanadecade,residentsofNortheastGreensborohavebeenfacedwiththerun-down,nearlyemptyRenaissanceCenter(formerlytheBessemerCenter).Initscurrentd i h h R i C i d b l f i d l i
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towardsturningtheirdreamintoareality.TheCommitteeisontracktoopentheRenaissanceCommunityCooperative(RCC)GroceryStorebyJuneof2014.Theycompleted
amarketstudyandproformabusinessprojectionsthatestablishtheviabilityoftheproject.Themarketstudyandproformahavebeenexaminedbyexperiencedgroceryprofessionals(UpliftSolutions)andlenders(SelfHelp)whobelievethattheRCCgrocerystorehasrealfinancialviability.1
TheCityisnowcontemplatingwhethertomaintainownershipoftheRenaissanceCenterorsellittoaprivatedevelopmentgroup(withtheRCCgroceryinthemixeitherway).CityCouncilisweighingwhichofthesetwopathswillcost-effectivelyleadtoaturn-aroundoftheCenterandthecommunityseconomicfortunes.Therearemanyfactorstobeweighed,includingthequestionofwhetheritisfeasibleandappropriatefortheCitytoownandoperatearetailshoppingcenter.
TherearealsoquestionsaboutwhetherprivateownershipoftheCenterwillleadtothekindofdevelopmentthecommunitywantsstoresthatmeetrealcommunityneedsandjobsthatpayadecentwageorwhetherprivateownershipwillresultinextractiveslum
typestoresthatdolittleinthewayofprovidingjobsandbuildingcommunitywealthandhealth.Thelogicofprofitasthesolebusinessmotivationcreatesthesetypesofstores.Thislogicrequiresthatbusinessesstrivetomakethemaximumprofit,takingadvantageofeveryfad,prejudice,weaknessanddependencyexistingintheneighborhoodinordertosellatthehighestallowablepricewhilemakingthelowestpossibleexpendituresonwagesandbenefitsandprovidingaslittleupkeepandmaintenanceaspossibletotheirfacilities.Inlow-incomeneighborhoods,wherethereislittlecompetitionandacaptiveaudiencewithlimitedtransportation,slum-typebusinessesoperatingwithprofitastheirsolemotive
neednotworryaboutprovidinghighqualitygoodsandservices.
ThereisaThirdOption:CommunityOwnership
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TheImportanceofCommunityOwnership
TherearesomewhoquestionwhytheCityorthecommunityshouldowntherealestateinwhichcommunity-ownedbusinesses,liketheRCCGroceryStore,operate.WhiletheRCCCommunityandF4DCstronglypreferthattheRenaissanceCenterbeownedbytheCityuntilthecommunitycanbuytheCenter,theRCCGroceryStorecouldconceivablyexistinsideashoppingareaandbuildingownedbyanotherdeveloper,asisthecasewithDeepRoots.Thereasonthatwethinkweshouldmovedownthepathtowardcommunityownershipisbecauseitisclearlybetterforthecommunity.Whilecommunityownershipcomeswithgreaterresponsibility,itwillcreateopportunitiestostabilizethecommunity,alongwithopportunitiestocreate,accumulateandretainwealththatwillimprovethequalityoflifeinthecommunityforyearstocome.Theownershipofthecenterisbothabusinessopportunityandanopportunitytoenhancethecommunityinthefollowingways:
Communityownershipwillbringinrevenuesfromtherentalofbusinessspacetootherbusinesses
Communityownershipwillallowthecommunitytoselectwhichbusinessesarebroughtintothecommunityandtodecidewhichbusinessesarenotwelcomedthere
Byregulatingrentstructures(withinthebusinesslimitsofwhatisneededtohandlethedebtservice),thecommunitycanofferincentivestoparticularlydesirabletenantswhowillhaveasignificantimpactonthecommunity,e.g.,healthfacilities,jobtrainingfacilities,communityarts,recreation,culture,history,etc.
Asimportantasitistoselectgoodtenants,itisalsoimportanttoexcludetenantsthatdonotcontributetothecommunityandinsteadextractthecommunityslimitedwealth.Unhealthyfastfood,predatorylendingestablishments,highpricedrent-to-owncenters,
d l ti b i h t k l th t it
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incentivesforjobcreationalongwithitsinvolvementwithcommunityredevelopmenteffortsareexpressionsofthatcommitment.Helpingtocreatethedemocraticstructureand
theopportunityforownershipoftheRenaissanceCenterasahuboftheeconomiclifeofthisNortheastGreensborocommunitywillbeimportantstepsontheroadtoparity.
Citiesacrossthecountryareinsimilarpositions.Thecurrenteconomiccrisisincreasestheurgencyoftheseeffortsatequitablecommunitydevelopment,butitdidnotcreateit.Greensborowillhavetheopportunitytobeamodelforothercitiesinansweringaquestiononthemindsofmany:Howcanwebestdeveloptheeconomicandphysicalinfrastructurethatwillallowallofourneighborhoodsthechanceandthemeanstohelpthemselves?
ThebalanceofthisdocumentattemptstoresponsiblytacklethisbigquestioninthespecificcontextofNortheastGreensboro,byaddressingthreequestionsthatcollectivelyassesswhethercommunityownershipoftheRenaissanceCenterisaviableoption:
1. CanthecommunityraisethemoneytopurchasetheRenaissanceCenter?2.
Arethereviableformsoflegalownershipandgovernancethatwouldallowacommunitytoresponsiblyanddemocraticallyownandoperateashoppingcenter?
3. Howwillthecommunitygaintherequisitecapabilitiestopullthisoff?Byansweringthesequestions,wewillmapoutmultiplepathwaystocommunityownershipoftheRenaissanceCentersoitcanbeevaluatedasaseriousoptionwhiletheCityCouncilmakesupitsmindaboutthefateoftheshoppingcenter.2
Question1:CanthecommunityraisethemoneytopurchasetheRenaissanceCenter?
Purchase Price of the Shopping Center
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bustling,vibrantshoppingdestinationfilledwithtenantspayinghighrents,theFMVwillgoup.Thatsnotthescenariowehavedataorexperiencewith,sointhispaper,wellnot
considerthisaspartofouranalysis.EveniftheFMVofthecentergoeshigher,therentsthatcouldbechargedwouldgoupaccordingly,whichwouldcoverthedebtserviceonextrafinancingneededtocovertheincreasedpurchaseprice.
WenotethattheCitywillconsideritsownpublicpolicy,fiscal,andstatutoryconcernsinsettingapurchasepricefortheRenaissanceCenter.SomeoftherelevantstatutesrequiresaleatFMVasdeterminedbythreeindependentappraisals,whereasothersallowsaleatalowerprice,ifcertainpublicnoticeandpublichearingrequirementsaremet.Forpurposesofthisanalysis,wellworkwiththe$1.9millionfigure,whichseemsafairestimateofFMV.
FinancingthePurchaseoftheShoppingCenter:NetOperatingIncomefromRentalofthe
ShoppingCenterGoestoDebtService
Inallscenariosinwhichthecommunitypurchasestheshoppingcenter,thepresumptionisthatthenetoperatingincomefromtheleasingofstoreswouldbeusedtocoveranydebt
servicerelatedtofinancing.Intheattachedspreadsheet,wedoaquick-and-dirty,non-discounted,non-depreciated,non-inflatedcashflowanalysiswherewecalculateanannualnetoperatingincome,beforedebtservice,of$91,414peryear.WebasedourrevenueandexpensefiguresonexplicitlynamedassumptionsdrawnfromtheMichaelWattsreportandtheMay20proposalofNewBessemerAssociates.Withahealthyreserveof.35persquarefootincluded,wethinkourassumptionsareconservativeandresponsible.
FinancingthePurchaseoftheShoppingCenter:Equity
Toobtainthe$1.9millionpurchaseprice,thecommunitywouldbringsomeamountofequitytothetable,withthebalancefinancedbySelfHelpCreditUnionand,perhaps,theCity In scenarios 1 3 the community would bring a minimum of $400 000 in equity with
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contributingtothecommunitysongoingeconomicdevelopment,health,andwell-being.ThereisexplicitunderstandingthatthesupportiverentfigurethattheRCCisseeking
($2,000permonth,or$24,000annually$2.40persquarefoot)istobetiedtocommunitybenefit,includingusingaportionofsurplustobuycommunity-ownedassetssuchastheRenaissanceCenter.
SomepeoplehavecriticizedthesupportiverentfigurefortheRCCasafinanciallyunsupportableburdenthatundercutstheviabilityoftheshoppingcenterasabusinessenterprise.Thatmaybetrueiftheshoppingcenteristobeownedbyaprivatedeveloperseekingmaximumreturnoninvestment,butneitherthecommunitynortheCityasowners
oftheRenaissanceCenterhavesuchanarrowinterest.Infact,itisinboththeCitysandthecommunitysinteresttosettherentfigurefortheRCCatalevelthatensuresthattheCentersbasicexpensesarecovered(lostpropertytax,maintenance,insurance)whileallowingforthecommunitytoaccumulatesurplusatafasterrate.Inthiscontext,thesupportiverentfigureisntaproblemitspartofthesolution,helpingthecommunityachieveitsbigpicturedreamsofcommunityownership,health,andwealth
whileprovidingtheCitywitharesponsiblewayoutoftheshoppingcenterbusiness.SupportfromFoundationsandGrassrootsFundraising
RoundingouttheRCCscontributiontoequity,weareconfidentthatwecanraiseadditionalfundsindonationsandgrantsfromindividualsaswellaslocal,regional,andnationalfoundations.InScenarios1-3,weestimateaminimumof$150,000fromfoundations,individualdonations,andgovernmentsources,suchasthefederal
governmentsHealthyFoodFinancingInitiative.InScenario4,thefast-purchasescenario,wedonothaveasmuchtimetodothegrant-seekingandfundraising,sothisfigureissmaller,at$80,000.
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loweringthecostofborrowing,or(2)thecommunitycanwaitlongertopurchasetheshoppingcenter,whichwouldallowmoretimeforalargerequitystaketoberaised(from
RCCsurpluses).
LotsofWaystoAccomplishThePurchase:FourPossibleFinancingScenarios
Pleaseseetheattachedspreadsheetinwhichwecomparefourdifferentfinancingscenarios,withdifferenttimelinesandimplicationsforcashflow.
Scenario1:Thecommunityisabletopurchasetheshoppingcenterin5yearsandpayoffthedebtwithin40yearsofpurchase(45yearsfromnow).
Down-Payment:$400,000(21%equity)
$250,000fromaccumulatedsurplusfromgrocerystore $150,000indonationsandgrantsfromlocal,regional,andnationalfoundations
Lending:$1,500,000(79%financing)
$800,000@4%over20yearsfromSelf-Help(annualdebtserviceinyears1-20is$58,174)
$700,000@0%over40yearsfromtheCityofGreensboro(annualdebtserviceinyears21-40followingpayoffofSelfHelpnoteis$35,000)
InScenario1,thedebttoSelf-HelpisretiredbeforetheCitysdebtbeginstobepaidoff.
Scenario2:Thecommunityisabletopurchasetheshoppingcenterin10yearsandpayoffthedebtwithin15yearsofpurchase(25yearsfromnow).
Down-Payment:$950,000(50%equity)
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$150,000indonationsandgrantsfromlocal,regional,andnationalfoundationsLending:$950,000(50%financing)
$950,000@4%over20yearsfromSelf-Help(annualdebtserviceinyears1-20is$69,082)
TheCitydoesnotparticipateasalenderinScenario3.SelfHelpispaidbackwithin20yearsofpurchase.
Scenario4:(FastPurchaseScenario):Thecommunityisabletopurchasetheshoppingcenterin2yearsandpayoffthedebtwithin30yearsofpurchase(32yearsfromnow)
Down-Payment:$100,000(6%equity)
$20,000fromaccumulatedsurplusfromgrocerystore $80,000indonationsandgrantsfromlocal,regional,andnationalfoundations
Lending:$1,800,000(94%financing)
$300,000@4%over5yearsfromSelf-Help(annualdebtserviceinyears1-15is$66,299.52)
$1,500,000@0%over15yearsfromtheCityofGreensboro(annualdebtserviceinyears6-30is$60,000)
InScenario4,thedebttoSelfHelpisretiredfirst,inyears15.ThedebttotheCityisretiredoverthenext25years(Years6-30).
CommunityWealthBuilding
The four scenarios have different implications for the goal of building community wealth
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gentrification,andgainingcommunitycontrolovertheenvironment.
Manycommunitiesareusingthe501(c)3non-profitCommunityLandTrust(CLT)asthelegalformationtomanagecommunityownershipofsharedrealestateassets.TheclosestCLTsweknowofareinOrangeCounty(CommunityHomeTrust)andDurham(DurhamCommunityLandTrustees).ForinformationaboutCLTs,checkoutthesewebsites:
DurhamCommunityLandTrustees,www.dclt.org CommunityHomeTrust,www.communityhometrust.org BurlingtonAssociates,www.burlingtonassociates.com NationalCommunityLandTrustNetwork,www.cltnetwork.org InstituteforCommunityEconomics,www.iceclt.org
WhilemostCLTshavefocusedonhousingstock,somearepurchasingandmanagingcommercialpropertyaswell.
Governance
Inthispreliminarydiscussion,wedontwanttogotoofarinspecifyingthedetailsofhowthelandtrustshouldbesetuporgovernedthesearemattersthathavetobeworkedoutinthecommunityamongthepeoplewhotaketheresponsibilityofformingthelandtrust,workingwithknowledgeablelegalandfinancialexperts.However,wethinkitsappropriatetotalkabouttheneedforauthenticdemocraticgovernancestructuresandpracticestobeinplace,embeddedwithinastrongPolicyGovernanceframework.
Wearesometimesaskedhowitispossibleforawholecommunitytooperateagrocerystore,ashoppingcenter,oranykindofbusiness.Somepeoplebelievethatiftherearenot
l h h ll d i i ill b l b d d f h i i f
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followsthepoliciesestablishedbytheBoardandthemembership,itisfreetocarryoutoperationsinanywaythatworks.Thisenablesthedailyoperationstobecarriedout
efficientlyandeffectively.(FormoreonPolicyGovernanceseewww.governancecoach.com.)IfyouremainskepticaloftheeffectivenessofPolicyGovernanceinabusinesssetting,considerthesuccessofWeaverStreetMarket(annualrevenue$14million)andCompanyShopsMarket(annualrevenue$5million),bothofwhichutilizePolicyGovernancestructuresandpractices.
AuthenticDemocracyandCommunityControl
Broadmembership,anchoredintheimmediateneighborhoodandjoinedbyalliesfromacrossthecity,isthestartingpointfordemocraticfunctioningoftheCLT.ThemembershipintheCLTcanbeginrathersmall(say50to100people)andeasilygrowto500to1,000ormorepeople.Itwillbeimportantformemberstohavefinancialortimecommitmentrequirementsasanexpressionoftheirseriousnessabouttheorganization.TherearevariouswaysotherCLTshavedecidedmembership,butultimatelytheserequirementswillbedecidedbythecommunity.AnyresidentofNorthCarolinacouldbecomeamember,
butmembershiprecruitmentwouldbefocusedontheareaimmediatelysurroundingtheshoppingcenter,withsecondaryattentiontothewidercommunityofGreensboro.
WeproposethattheCLTsboardbeelectedentirelyfromitsmembers.Themajorityofboardseatswouldbereservedformemberswholivewithina1-2mileradiusoftheshoppingcenter.Thiswouldensurethattheshoppingcenterwouldbeoperatedwiththeconcernsoftheimmediatecommunitymostinmind.Twotothreeseatscouldbereservedformemberswholiveoutsidetheimmediatecommunity,tobringinoutsideperspectives,
expertise,andconnectionstocomplementthoseoftheimmediatecommunity.
Takingitscuesfromthemembershipmeeting,theBoardwillneedtosetpolicyonanumber of issues starting with the question of what needs of the community are to be met
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forcommunityimprovementeffortssponsoredbythenonprofitlandtrust.
Non-memberswholiveintheimmediatecommunityshouldbeinvitedtoatleastoneeventeachquarter,designedtostrengthentheCLTsconnectiontotheimmediatecommunityandtohearaboutanyissuesoropportunitiesfacingthecommunity.TheCLTshouldalsoconscientiouslyinteractwithothercommunityorganizationsandinstitutionsinthearea,includingCEEJ,ConcernedCitizens,WoodmereParkNeighborhoodAssociation,PeelerRecreationCenter,andMcGirt-HortonLibrary.
Asstatedearlier,itisntappropriateinthispapertospecifyallaspectsofthegovernanceof
theCLT:itscriticalthatmembersofthecommunitybeengagedindecidinghowtheywantthelandtrusttobestructured.Whatskey,though,isaninitialandsustainedcommitmenttoauthenticdemocracy.Thatmeansgovernancestructuresandpracticesthatareinclusive,transparent,andaccountable,backedupbywell-understoodandagreed-upondecisionmakingprocesses.Itsnotenoughtogetarticlesofincorporationandbylawsinplaceitsaboutbuildingaliving,dynamiccapacityforpracticingauthenticdemocracy.
Question3:Howwillthecommunitygaintherequisitecapabilitiestopullthisoff?
Whatcapabilitiesareneeded?
Weseethreebroadcapabilitiesthatthecommunitywillneedtosucceed:
1. CollectiveandindividualskillsandaptitudesrelatedtodemocraticPolicyGovernanceofaCLTthatownsasubstantialasset
2. Amoderatelevelofcommunitycohesivenessandtrust,enhancedbysoftskillsincommunityengagementandcommunitybuilding
3. Specificknowledgeandskillsrelatedtoowningandoperatingashoppingcenter
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creditedwith.TheRCCexperienceisnotafluke:afterall,thesamecommunitycametogetherinahighlyeffectivewaytostopthere-openingoftheWhiteStreetLandfill.CEEJ
andConcernedCitizenshaveproventhemselvestobewell-organized,purposeful,hard-working,andinitforthelong-haul.Sothereisclearlyasolidsetofcapabilitiestoworkfrom.
Wearealsoconfidentthattheexperienceoflaunchingandoperatingacooperativelyownedgrocerystorewillprovetobeavaluabletraininggroundforbothindividualleadersandthelargercommunityintheareasofdemocraticfunctioning,communityengagement,finance,retailoperations,etc.Infact,weseethenextfewyearsofRCCstart-upand
operationsasessentialtogettingthecommunityreadyforthelargerprojectofowningacommunityassetliketheshoppingcenter.
Frankly,weresuspiciousofotherproposalsthathavesuggestedgivingpartoralloftheshoppingcentertothecommunity,withoutanyseriousconsiderationofthecommunityspreparationtotakeonthatresponsibility,orwho,exactly,representsthecommunity.Withoutanextended,concreteopportunityforlearningandpracticeatdemocratic
governanceofabusinessandintheabsenceofanorganizationwithamechanisminplacetocarrythisout,wedontseehowthecommunitywillbeabletoidentifyitsmostimportantgoalsinowningtheCenter,electanaccountableBoard,andsecureandsuperviseappropriatequalifiedmanagement.
Wehavesketchedoutfourscenariosforcommunityownership,threeofwhichprovidefivetotenyearsforthedevelopmentofcapacity,leadership,anddemocraticorganizationalstructurestoassumeresponsibleownershipoftheRenaissancecenter.Theselonger-term
scenariosareneededtoraiselargerequitystakes,buttheyalsohavethebenefitofprovidingampletimeforcommunitydevelopment.Thefourthscenario,inwhichthecommunitylandtrustisabletopurchasetheshoppingcenterintwoyears,isachievable,but requires an acceleration of community development activities and a more serious
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ComparisonoffourscenariosinwhichaComunityLandTrustpurchasesRenaissanceCenter
Scenario1 Scenario2 Scenario3 Scenario4
PurchasePriceofShoppingcenter $1,900,000 $1,900,000 $1,900,000 $1,900,000
Yearstosavedownpayment 5 10 10 2
Yearofpurchase 2018 2023 2023 2015
Yearstopayoff(Term) 40 15 20 30
Yearpaidoff 2058 2038 2043 2045
LastyearCityisowedmoney 2058 2038 N/A 2045
InitialEquityStake $400,000 $950,000 $950,000 $100,000
AmountofdownpaymentfromRCC $250,000 $800,000 $800,000 $20,000
Amountofdownpayment-othersources $150,000 $150,000 $150,000 $80,000
AmountofFinancingNeeded $1,500,000 $950,000 $950,000 $1,800,000
FinancingfromSelfHelp@4% $800,000 $500,000 $950,000 $300,000
FinancingfromCity@0% $700,000 $450,000 $0 $1,500,000
AnnualNOIbeforedebtservice $91,414 $91,414 $91,414 $91,414
AnnualDebtService
Years1-5 $58,174 $74,381 $69,082 $66,300
Years6-15 $58,174 $74,381 $69,082 $60,000
Years16-20 $58,174 $0 $69,082 $60,000
Years21-30 $35,000 $0 $0 $60,000
Years31-40 $35,000 $0 $0 $0
AnnualNOIafterdebtservice
Years1-5 $33,240 $17,033 $22,332 $25,114
Years1-15 $33,240 $17,033 $22,332 $31,414
Years16-20 $33,240 $91,414 $22,332 $31,414
Years21-30 $56,414 $91,414 $91,414 $31,414
Years31-40 $56,414 $91,414 $91,414 $91,414
AccumulatedCashrelativetopurchasedate
Year3 $0 $0 $0 $75,343
Year5 $166,200 $85,164 $111,661 $125,572
Year10 $332,399 $170,327 $223,323 $282,642
Year15 $498,599 $255,491 $334,984 $439,712
Year 20 $664 798 $712 561 $446 646 $596 782
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RoughCutAnnualNetOperatingIncomeStatementforShoppingCenter
AnnualIncomefromRents
FamilyDollar $39,680.00
RCC $24,000.00
19,000 remainingsquarefeet $140,600.00
Annualmaxincome $204,280.00
Revenuelosttovacancy -$32,560.00
Grossincomefromrents $171,720.00
AnnualExpenses
Management $8,586.00
Insurance $7,920.00
Maintenance $39,600.00
Utilities $8,800.00
Taxes $0.00 Ifcommunityownsasanon-profitlandtrust,thennotaxesdue.Otherwise$26,184
Reserves $15,400.00
Totalexpenses $80,306.00
NetOperatingIncomebeforeDebtService $91,414.00
Assumptions
Sqfootageofgrocerystore/comm'yspace 15,000
Grocerystorerentperyr $24,000.00
FamilyDollarsqfootage 10,000
FamilyDollarrentperyr $40,000.00
Totalsqfootageofcenter 44,000
Remainingsqfootage 19,000
Annualsqftrentalprice $7.40 seeassumptionsusedbyNewbessemerAssociatesin5/20submission
Vacancyrate 10% likelygivenlong-termleasessignedbyFamilyDollarandRCCmanagementcosts 5% seeassumptions usedinMichaelWatts4/23report to City
Insurancepersqft $0.18 seeassumptions usedinMichaelWatts4/23report to City
Maintenancepersqft $0.90 seeassumptionsusedinMichael Watts4/23reporttoCity
Utilitiespersqft $0.20 seeassumptions usedinMichaelWatts4/23report to City
Reserve per sq ft $0.35 seeassumptions usedinMichaelWatts4/23report to City
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