A Pathway to Responsible Community Ownership of the Renaissance Center

7/30/2019 A Pathway to Responsible Community Ownership of the Renaissance Center

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A Pathway to Responsible

Community Ownership of

the Renaissance Center

Fund for Democratic Communities

May 24, 2013

620 S. Elm St.Greensboro, NC 27403

f4dc.org ~ twitter.com/f4dc

FUND

DEMOCRATICCOMMUNITIES

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f4dc.org ~ twitter.com/f4dc2

Executive Summary

Te best option or ongoing community wealth building in Northeast Greensboro is to or the City to allow thecommunity to purchase the Renaissance Center in Northeast Greensboro. Tis document maps out the pathwayto that end. Community ownership is made possible by the development o a Community Land rust (CL).Tis community-controlled entity would buy the shopping center rom the city using a combination o nancingincluding accumulated prot rom the operation o the Renaissance Community Coop, nancing rom Sel-Help Credit Union and possibly some loan assistance rom the City o Greensboro. Debt service would be repaidusing the unds generated in the net operating income o the shopping center with a balance o unds availableto nance other community projects. Tis analysis includes provision or vacancy rates and ullling the existinglease agreement to Family Dollar Store.

Tree scenarios o purchase and ownership are included, each having dierent dates or purchasing o the prop-erty and the retirement o all debt. Also analyzed is the rate and amount o accumulation o community wealthunder each scenario. Spreadsheets are attached that summarize these scenarios. Tis document also looks at theprocess o preparation o the community group to exercise the responsibilities o ownership through a Commu-nity Land rust.

Our hope is that this document will illustrate possible pathways to community ownership o the RenaissanceCenter and help the City Council to be able to evaluate community ownership o the Renaissance Center as aserious option as they decide the ate o the shopping center.

Background

For more than a decade, residents o Northeast Greensboro have been aced with the run-down, nearly emptyRenaissance Center (ormerly the Bessemer Center). In its current decaying shape, the Renaissance Center is aneyesore and a symbol o economic desolation. Te City o Greensboro, recognizing the need to turn this situa-tion around, committed to improving the area. In 2008, the City purchased the Center, and then built the beauti-ul McGirt-Horton branch library on the ront quarter o the property.

Extensive community discussions and negotiations with the City established several ways the community wishedto see the balance o the buildings and property be put to use. Concerned Citizens o Northeast Greensboro,Citizens or Economic and Environmental Justice (CEEJ) and others who participated in the many orums,charrettes and endless meetings believed that they were on the road to a vibrant, healthy acility that would meeta range o community needs, including a ull-service grocery store, a health acility, job training, and other retailand commercial opportunities.

Sadly, these eorts to turn the shopping center around sputtered and stalled. aking matters into their ownhands, residents o Northeast Greensboro began working together to meet the long-standing community needor a ull-service grocery store. Tey ormed themselves into the Renaissance Cooperative Committee and are

making great strides towards turning their dream into a reality. Te Committee is on track to open the Renais-sance Community Cooperative (RCC) Grocery Store by June o 2014. Tey completed a market study and proorma business projections that establish the viability o the project. Since then they have promises or over$745,000 towards the $2 million needed to open the store.

Te City is now contemplating whether to maintain ownership o the center or sell it to a private development


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group (with the RCC grocery in the mix either way). City Council is weighing which o these two paths willcost-eectively lead to a turn-around o the Centers and the communitys economic ortunes. Tere are manyactors to be weighed, including the question o whether it is easible and appropriate or the City to own andoperate a retail shopping center. On the other side, there are questions about whether private ownership o theCenter will lead to the kinds o stores the community wants that meet real community needs, or will it resultin extractive slum type stores that do little in the way o providing jobs and building community wealth andhealth.

Te logic o prot alone as a business motivation creates these types o stores. Tis logic requires that businessesstrive simply to make the maximum prot. It means that they must take advantage o every opportunity to makea sale. Tey will utilize every ad, every prejudice, every weakness and every dependency existing in the neigh-borhood in order to sell at the highest allowable price while making the lowest possible expenditures on wagesand benets and providing as little upkeep and maintenance as possible to their acility. Tis is especially true inneighborhoods where business patterns are such that there is little competition and a captive audience with noworry about the need to provide high quality goods and services. We see this now with the businesses that inten-tionally seek to locate in what they perceive as low-income neighborhoods.

There is a Third Option: Community Ownership

Tere is a third path, however: the community could buy the Renaissance Center and democratically ownand control it, using it as a major asset to leverage on behal o ongoing community wealth-building.

Some people have raised concerns that this is not a realistic option, saying that the community is not now andwill not soon become capable o purchasing or governing a shopping center. We at F4DC dispute this bleak viewo the current and potential capability o the community. Aer working closely with the RCC Steering Commit-tee and other Northeast Greensboro organizations or more than a year, we have a gained a good sense o thecommunitys current and emergent capabilities. We see a clear pathway to responsible community ownership othe Renaissance Center within the next our to ten years.

Structure and Purpose of this Document

Te purpose o this document is to map out the pathway to community ownership o the Renaissance Center soit can be evaluated as a serious option while the City Council makes up its mind about the ate o the shoppingcenter.

Tere are three main questions to answer, to assess whether this community ownership o the Renaissance Cen-ter is a viable option:

1. Can the community raise the money to purchase the Renaissance Center?

2. Are there viable orms o legal ownership and governance that would allow a community to responsibly

and democratically own and operate a shopping center?

3. How will the community gain the requisite capabilities to pull this o?

In the next three sections o this document, well attempt to answer each o these questions. But beore that, weldiscuss the benets o community ownership to the immediate community surrounding Renaissance center andto the City as a whole.


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Readers should note that this document is speculative in nature, even as we attempt to anchor our speculationsin realistic assumptions. It is not a prospectus, pro-orma, statement o commitment, or ormal easibility assess-ment. Nor is it a business plan. Its purpose is to provide rough-cut, good aith estimates and inormation thathelp to answer the question o whether there is a realistic pathway or the community to assume ownership othe Renaissance Center.

Our hope is that this document will help elected ocials in the City o Greensboro and community membersdecide that it is worth continuing a serious conversation about whether and how the community can step up to

purchase and operate the Renaissance Center.

The importance o Community Ownership

Tere are some who question why the community should own the real estate in which community owned busi-nesses operate. While the RCC Community and F4DC strongly preer that it be owned by the city, the RCC Co-op Grocery Store could possibly exist inside a shopping area and building owned by another developer as is thecase with Deep Roots. Te reason that we think we should move down the path toward community ownershipis because it is clearly better or the community. While community ownership comes with greater responsibility,it will create opportunities to stabilize the community, and opportunities to create, accumulate and retain wealth

that will improve the quality o lie in the community or years to come. Te ownership o the center is both abusiness opportunity and an opportunity to enhance the community in the ollowing ways:

the ownership will bring in revenues rom the rental o business space to other businesses

the ownership will allow the community to select which businesses are brought into the community andto decide which businesses are not welcomed there

by the regulation o rent structures (within the business limits o what is needed to handle the debtservice) the community can oer incentives to particularly desirable tenants who will have a signicantimpact on the community i.e. health acilities, job training acilities, community arts, recreation, culture,history, etc.

As important as it is to select good tenants, it is also important to exclude tenants that do not contribute to thecommunity and instead extract the communitys limited wealth. Unhealthy ast ood, predatory lending estab-lishments, high priced rent-to-own centers, and speculative businesses such as sweep-stakes parlors that prey oncommunity members economic uncertainty do not help the community reach its ull potential. Even the provi-sion o creating jobs doesnt help very much i the jobs are at or near minimum wage and without benets. Astudy done by economics proessor Christopher Gunn o Hobart and William Smith Colleges, using standardindustry data, shows that in a typical McDonalds ranchise the total surplus exceeds the payroll and o that sur-plus, more than 75% is taken out o the community (Reclaiming Capital, Cornell University Press, 1991, 28-29). Incontrast, community ownership o the shopping center will ensure that the majority o the surplus generated bythe co-op grocery and the shopping center will stay in that community. It will be controlled and managed by the

people who live there, put back to work developing economic strength, quality o lie, and general well-being thatcommunity desires. We think that creating good jobs and community wealth must be the objective o communi-ty economic development.

Te city has a commitment to help alleviate some o the long standing inequities that are evident in the dispar-ities that numerous studies, including the recent parity study, show and that are refected in the lives o Greens-boro residents. Te citys use o economic incentives or job creation along with its involvement with community


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redevelopment eorts are expressions o that commitment. Helping to create the democratic structure and theopportunity or ownership o the Renaissance center as a hub o the economic lie o this northeast Greensborocommunity will be important steps on the road to equity in development. Cities across the country are in similarpositions. Te current economic crisis increases the urgency o these eorts at equitable community develop-ment, but it did not create it. Greensboro will have the opportunity to be a model or other cities in answeringthe questions on the minds o many: How can we best develop the economic and physical inrastructure that willallow all o our neighborhoods the chance and the means to help themselves? Te balance o this document isintended to bring the answer to that question closer to us all.

Question 1: Can the community raise the money

to purchase the Renaissance Center?

Purchase Price of the Shopping Center

Te rst step in answering the question o whether the community can raise the money to purchase the shop-ping center is to establish an estimate o its purchase price. Te Citys own studies show current air market value(FMV) or the Renaissance Center at $490,000. An April 2013 report prepared or the City by Michael Wattsestimates a projected FMV o $1.9 million, should the City invest the roughly $2 million it is considering invest-

ing in improvements.

We assume the communitys purchase o the shopping center would take place aer the City has made its im-provements, so we will use Watts estimate o $1.9 million as he purchase price. O course, i the Center takeso over the next ew years and becomes a bustling, vibrant shopping destination lled with tenants paying highrents, the FMV will go up. Tats not the scenario we have data or experience with, so in this paper, well notconsider this as part o our analysis. Even i the FMV o the center goes higher, the rents that could be chargedwould go up accordingly, which would cover the debt service on extra nancing needed to cover the increasedpurchase price.

We note that the City will consider its own scal concerns in setting a purchase price or the Renaissance Center.

But the City also has public policy interests in the economic and community development o Northeast Greens-boro. Tus, making the shopping center aordable to the community may be a choice that infuences the Citydownward in setting the asking price. However, or purposes o this analysis, well work with the $1.9 milliongure.

Financing the Purchase of the Shopping Center -Net Operating Income

from Rental of the Shopping Center

In all scenarios in which the community purchases the shopping center, the presumption is that the net operat-ing income rom the rental o stores in the center would be used to cover any debt service related to the nanc-ing. In the attached spreadsheet, we do a quick-and-dirty, non-discounted, non-depreciated, non-infated cash

fow analysis where we calculate an annual net operating income, beore debt service, o $91,414 per year. Webased our revenue and expense gures on explicitly named assumptions drawn rom the Michael Watts reportand the May 20 proposal o New Bessemer Associates. With a healthy reserve o .35 per square oot included, wethink that our assumptions are quite conservative. Tus, we see the $91,414 gure as a lower bound estimate onannual cash fow.


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Financing the Purchase of the Shopping Center - Equity

o obtain the $1.9 million purchase price, the community would bring a minimum o $400,000 in equity to thetable, with the balance nanced by Sel Help Credit Union and, perhaps, the City. In all scenarios, the largestpart o the equity stake would come rom surpluses generated by the RCC grocery store. RCCs cash fow analysissuggests that the RCC can contribute a minimum o $250,000 o surplus accumulated during the rst ve yearsaer launch, and as much as $800,000 over ten years.

We believe that the RCCs governing body would agree to using a signicant portion o its surpluses over the rstve to ten years o its operation, or a couple o reasons:

Within the RCC community, there is already a great deal o supportive conversation about the lon-ger-term goal o purchasing the shopping center. Members o the community see ownership o the shop-ping center as good or the co-op as well as connected to the co-ops larger mission o contributing to thecommunitys ongoing economic development, health, and well-being.

Te RCC Steering Committee is aware that it is asking or a very aordable monthly rental rate, and thislow rent is one reason the surpluses are expected to accumulate. In a sense, the RCC sees the low rent ar-rangement as a trade-o or the uses o its surplus to benet the community in the rst ve to ten years.

Rounding out the RCCs contribution to equity, we are condent that we can raise an additional $150,000 indonations and grants rom individuals as well as local, regional, and national oundations.

It may well be possible to raise considerably more nancial support rom oundations and government sources,which would be applied toward increasing the equity stake: there is a great deal o interest nationally and region-ally in the use o community land trusts as a tool or turning around blighted areas and rebuilding local econ-omies. However, in the interest o presenting responsible scenarios, were holding to the conservative gure o$150,000 or donor, oundation, and government support.

Financing the Purchase of the Shopping Center - Lending

F4DC has had a preliminary conversation with Sel-Help; they have indicated that they could bring nancing oup to $1,500,000 into a deal in which the community purchases the shopping center rom the City, holding theland and buildings as collateral.

While Sel-Help has the capacity and interest to meet all the need or outside lending, the debt service on $1.5million is too big to be covered by the annual net operating income rom the center. Tat shortall can be ad-dressed in two ways: (1) the City o Greensboro could participate as a 0% interest lender in a subordinate po-sition to Sel Help, thus lowering the cost o borrowing, or (2) the community can wait longer to purchase theshopping center, which would allow more time or a larger equity stake to be raised (rom RCC surpluses).

Lots of Ways to Accomplish The Purchase: Three Possible Financing Scenarios

Please see the attached spreadsheet in which we compare three dierent nancing scenarios, with dierent time-lines and implications or cash fow.

Scenario 1: Te community is able to purchase the shopping center in 5 years and pay o the debt within 40


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years o purchase (45 years rom now).

Down-Payment: $400,000 (21% equity)

$250,000 rom accumulated surplus rom grocery store

$150,000 in donations and grants rom local, regional, and national oundations

Lending: $1,500,000 (79% nancing)

$800,000 @ 4% over 20 years rom Sel-Help (annual debt service in years 1-20 is $58,174)

$700,000 @ 0% over 40 years rom the City o Greensboro (annual debt service in years 21-40 ollowingpayo o Sel Help note is $35,000)

Note that in Scenario 1, the debt to Sel-Help is retired beore the Citys debt begins to be paid o.

Scenario 2: Te community is able to purchase the shopping center in 10 years and pay o the debt within 15years o purchase (25 years rom now).




Lending: $950,000 (50% nancing)


$450,000 @ 0% over 15 years rom the City o Greensboro (annual debt service in years 1-15 is $30,000)

In Scenario 2, both the City and Sel Help are paid back within 15 years o purchase.

Scenario 3: Te community is able to purchase the shopping center in 10 years and pay o the debt within 20years o purchase (30 years rom now)




Lending: $950,000 (50% nancing)


Te City does not participate as a lender in Scenario 3. Sel Help is paid back within 20 years o purchase.

Community Wealth Building


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Te three scenarios have dierent implications or the goal o building community wealth, as can be seen insome detail in the Comparison spreadsheet. From the perspective o community wealth-building alone, Scenario2 is both the astest and the most eective, achieving ull community ownership o the shopping center by 2038(20 years earlier than Scenario 1 and ve years earlier than Scenario 3), and generating almost $2.5 million incash by 2058.

Question 2: Are there viable orms o legal ownership and

governance that would allow a community to responsibly

and democratically own and operate a shopping center?

Community Land Trusts

Across the U.S., communities are turning to community ownership o real property to accomplish a number ogoals: building community wealth, renewing decaying residential and commercial properties, providing eco-nomically sustainable opportunities or aordable housing and commercial development, combatting the desta-bilizing eects o gentrication, and gaining community control over the environment.

Many communities are using the 501(c)3 non-proft Community Land rust (CL) as the legal ormation to

manage community ownership o shared real estate assets. Te closest CLs we know o are in Orange County(Community Home rust) and Durham (Durham Community Land rustees). For inormation about CLs,check out these websites:

Durham Community Land rustees, www.dclt.org

Community Home rust, www.communityhometrust.org

Burlington Associates, www.burlingtonassociates.com

National Community Land rust Network, ww.cltnetwork.org

Institute or Community Economics, www.iceclt.org

While most CLs have ocused on housing stock, some are purchasing and managing commercial property aswell.

Governance

In this preliminary discussion, we dont want to go too ar in speciying the details o how the land trust shouldbe set up or governedthese are matters that have to be worked out in the community among the people whotake the responsibility o orming the land trust, working with knowledgeable legal and nancial experts. How-ever, we think its appropriate to talk about the need or authentic democratic governance structures and prac-tices to be in place, embedded within a strong Policy Governance ramework.

We are sometimes asked how it is possible or a whole community to operate a grocery store, a shopping center,or any kind o business. Some people believe that i there are not one or two people at the top, then all decisionswill be labored and raught, requiring ar too much patience and taking ar too much time. Policy Governance isa system o governance that claries the roles and relationships o membership, board, and management. PolicyGovernance is widespread in the cooperative movement, because it allows or coherent, fexible, and eectiveday-to-day management o business operations, while long-term policy, strategy, and direction are determined


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by the membership, either directly in the annual meeting, or through their elected representatives, the Board.

Roughly, Policy Governance applied to community ownership o the shopping center would work like this: theCL would be established as a non-prot membership-based organization, consistent with North Carolina andederal non-prot law. Te membership would elect the Board and decide major strategic direction in an annu-al meeting. Te Board would ollow that strategy in establishing policy. Te Board would also hire or contractand supervise proessional management or the shopping center. Te management would run the day-to-dayoperation o shopping center, ollowing the policies outlined by the Board. Te management is accountable to

the Board. Te Board is accountable to the Membership. Tis model aords tremendous fexibility to manage-ment. As long as the management successully enacts the strategic direction and ollows the policies establishedby the Board and the membership, it is ree to carry out operations in the way that works. Tis enables the dailyoperations to be carried out eciently and eectively. (For more on Policy Governance see www.governance-coach.com.) I you remain skeptical o the eectiveness o Policy Governance in a business setting, consider thesuccess o Weaver Street Market (annual revenue $14 million) Deep Roots Market (annual revenue $4 million),and Company Shops Market (annual revenue $5 million), all o which utilize Policy Governance structures andpractices.

Authentic Democracy and Community Control

Broad membership, anchored in the immediate neighborhood and joined by allies rom across the city, is thestarting point or democratic unctioning o the CL. Te membership in the CL can begin rather small (say100 people) and easily grown to 500 to 1,000 or more people. It will be important or members to have nancialor time commitment requirements as an expression o their seriousness about the organization. Tere are vari-ous ways other CLs have decided membership, but ultimately these requirements will be decided by this com-munity. Any resident o North Carolina could become a member, but membership recruitment would be ocusedon the area immediately surrounding the shopping center, with secondary attention to the wider community oGreensboro.

We propose that the CLs board be elected entirely rom its members. Every election would need to be con-

tested, with at least two times as many candidates as there are seats. Contested elections enhance democraticunctioning as more ideas, kinds o people, and experience are weighed and evaluated by the electorate. Temajority o board seats would be lled by members who live within a 1-2 mile radius o the shopping center. Tiswould ensure that the shopping center would be operated with the concerns o the immediate community mostin mind. wo to three seats could be reserved or members who live outside the immediate community. Tesepeople can bring needed perspectives, expertise, and connections to complement those o the immediate com-munity.

aking its cues rom the membership meeting, the Board will need to set policy on a number o issues, startingwith the question o what needs o the community are to be met by the shopping center, by whom, and at whatcost. Te Board will also have to set policy around uses o the community space that is in the shopping center,

and guidelines or the recruitment o tenants and the setting o lease terms that sustain the CL while encourag-ing appropriate community economic development.

Te Annual Membership Meeting would need to be conducted in a substantive, democratic way, so that mem-bers have real say about the strategic direction and questions acing the land trust. Te cooperative movementcan provide many examples o annual meetings with large memberships where serious matters are decided by


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the membership. One key question that should be addressed in each annual meeting will be whether and how tospend the annual surplus. Te CLs bylaws will almost certainly restrict certain kinds o expenditures, to pro-hibit sel-dealing and ensure maintenance o a charitable and community ocus o the CL.

Troughout the year, there need to be ways or members o the CL to aect policy and day-to-day practices,while building community among members. For example, members can serve on committees, attend sponsoredsocial and educational events, and volunteer or community improvement eorts sponsored by the nonprotland trust.

Non-members who live in the immediate community should be invited to at least one event each quarter,designed to strengthen the CLs connection to the immediate community and to hear about any issues oropportunities acing the community. Te CL should also conscientiously interact with other community or-ganizations and institutions in the area, including CEEJ, Concerned Citizens, Woodmere Park NeighborhoodAssociation, Peeler Recreation Center, and McGirt-Horton Library.

Question 3: How will the community gain

the requisite capabilities to pull this of?

What capabilities are needed?

We see three broad capabilities that the community will need to succeed:

1. Collective and individual skills and aptitudes related to democratic Policy Governance o a CL thatowns a substantial asset

2. A moderate level o community cohesiveness and trust, enhanced by so skills in community engage-ment and community building

3. Specic knowledge and skills related to owning and operating a shopping center

Where will the community get these capabilities?

Keep in mind that there are dierent spheres and contexts in which the needed capabilities can reside:

In the community as a whole (or example, a shared sense o community trust has to be held in the com-munity at large or it isnt authentic)

In individual community leaders (e.g., skill at engaging people in the community, knowledge opolicy governance and how it applies to this situation, etc.)

Within hired experts (e.g., real estate attorneys, CPAs, board development consultants, etc.)

Our experience organizing in Northeast Greensboro on the grocery store project has taught us that theres morecapability already present in the community than it is generally credited with. Te RCC experience is not a fuke:aer all, the same community came together in a highly eective way to stop the re-opening o the White StreetLandll. CEEJ and Concerned Citizens have proven themselves to be well-organized, purposeul, hard-working,and in it or the long-haul. So there is clearly a solid set o capabilities to work rom.

We are also condent that the experience o launching and operating a cooperatively owned grocery store will


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prove to be a valuable training ground or both individual leaders and the larger community in the areas odemocratic unctioning, community engagement, nance, retail operations, etc. In act, we see the next ew yearso RCC start-up and operations as essential to getting the community ready or the larger project o owning acommunity asset like the shopping center.

Frankly, were suspicious o other proposals that have suggested giving part or all o the shopping center to thecommunity, without any serious consideration o the communitys preparation to take on that responsibility.Without an extended, concrete opportunity or learning and practice at democratic governance o a business and

in the absence o an organization with a mechanism in place to carry this out, we dont see how the communitywill be able to identiy its most important goals in owning the center, elect an accountable Board, and secure andsupervise appropriate qualied management.

In our opinion, community ownership is not an immediate workable option. We think that it is very workableour to ten years rom now. Tats partly a unction o the time needed to raise the equity stake, but its also basedon a realistic assessment o community capacity at the present time and the amount o community eort that willbe needed to launch the grocery store. We, the RCC, and the community have our hands ull with the start-up othe grocery store. In a ew years, well be able to turn our attention to the next goal: ownership o the RenaissanceCenter. Its important to allow time or each o these projects to emerge, grow, and become sustainable.

In both projects, F4DC is willing to commit signicant sta time and some nancial resource to supportingongoing individual and community capacity building. Trough our relationships with national and regionalnon-prots and cooperative development agencies, we can provide workshops, consultants, and trainers who canhelp prepare the community and its chosen leaders in the various tasks and roles required. We believe that otheroundations in the region would also like to participate in these kinds o capacity-building eorts. So the com-munity and its leaders will have ample support to grow the capacities they need to succeed.


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PathwaystoCommunityOwnership-NetOperatingIncome

FundforDemocraticCommunities f4dc.org

nnualIncomefromRents

FamilyDollar $39,680.00

RCC $24,000.00

19,000remainingsquarefeet $140,600.00

Annualmaxincome $204,280.00

Revenuelosttovacancy -$32,560.00

Grossincomefromrents $171,720.00

nnualExpenses

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

etOperatingIncomebeforeDebtService $91,414.00

ssumptions

Sqfootageofgrocerystore/comm'yspace 15,000

Grocerystorerentperyr $24,000.00

FamilyDollarsqfootage 10,000FamilyDollarrentperyr $40,000.00

Totalsqfootageofcenter 44,000

Remainingsqfootage 19,000

Annualsqftrentalprice $7.40 seeassumptionsusedbyNewbessemerAssociatesin5/20submission

Vacancyrate 10% likelygivenlong-termleasessignedbyFamilyDollarandRCC

managementcosts 5% seeassumptionsusedinMichaelWatts4/23reporttoCity

Insurancepersqft $0.18 seeassumptionsusedinMichael Watts4/23reporttoCity

Maintenancepersqft $0.90 seeassumptionsusedinMichaelWatts4/23reporttoCity

Utili tiespersqft $0.20 seeassumptionsusedinMichael Watts4/23reporttoCity

Reservepersqft $0.35 seeassumptionsusedinMichael Watts4/23reporttoCity


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PathwaystoCommunityOwnership-3scenarios

FundforDemocraticCommunities f4dc.org

Scenario1 Scenario2 Scenario3

PurchasePriceofShoppingcenter $1,900,000 $1,900,000 $1,900,000

Yearstosavedownpayment 5 10 10

Yearofpurchase 2018 2023 2023

Yearstopayoff(Term) 40 15 20

Yearpaidoff 2058 2038 2043LastyearCityisowedmoney 2058 2038 N/A

InitialEquityStake $400,000 $950,000 $950,000

AmountofdownpaymentfromRCC $250,000 $800,000 $800,000

Amountofdownpayment-othersources $150,000 $150,000 $150,000

AmountofFinancingNeeded $1,500,000 $950,000 $950,000

FinancingfromSelfHelp@4% $800,000 $500,000 $950,000

FinancingfromCity@0% $700,000 $450,000 $0

AnnualNOIbeforedebtservice $91,414 $91,414 $91,414

AnnualDebtServiceYears1-15 $58,174 $74,381 $69,082

Years16-20 $58,174 $0 $69,082

Years21-40 $35,000 $0 $0

AnnualNOIafterdebtservice

Years1-15 $33,240 $17,033 $22,332

Years16-20 $33,240 $91,414 $22,332

Years21-40 $56,414 $91,414 $91,414

AccumulatedCashrelativetopurchasedateYear5 $166,200 $85,164 $111,661

Year10 $332,399 $170,327 $223,323

Year20 $664,798 $712,561 $446,646

Year40 $1,793,078 $2,997,911 $2,274,926

Accumulatedcashbyyear

2023 $166,200 $0 $0

2028 $332,399 $85,164 $111,661

2038 $664,798 $255,491 $334,984

2058 $1,793,078 $2,540,841 $1,817,856

A Pathway to Responsible Community Ownership of the Renaissance Center

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