1 nalcab conference 2301 mission st, co – ownership model presented by: luis granados, mission...
TRANSCRIPT
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NALCAB Conference2301 Mission St, Co – Ownership Model
Presented by:Luis Granados, Mission Economic Development Agency
September 4, 2007
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MEDA Background
Incorporated in 1973 Most Capacity Focused on Loan
Packaging In 2001, Revised Mission Vision
Revised Vision, Mission Changed Understanding of Its Role
Relative to Its Community and Constituency
Developed more Comprehensive Set of Services
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2008 Vision and Mission
Vision:We envision generations of Latino families that, inspired by the past and present life of the Mission District, are a part of vibrant, diverse, proud and forward-thinking communities in which residents own their homes and businesses, and are rooted and actively engaged in the civic and political life of their neighborhoods and the institutions that affect their lives. We see these families as having sufficient assets to provide them and future generations with the opportunity to call San Francisco their home permanently.
Mission:To achieve economic justice for San Francisco’s low- and moderate-income Latino families through asset development
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Strategic Goals Direct services: Enhance MEDA’s role as the leading channel for providing effective asset
development services to San Francisco's low- and moderate-income Latino families.
Policy advocacy and development: Building on our existing work, play a major strategic role in policy development and advocacy efforts that engage and further the asset development standing of San Francisco's low- and moderate-income Latino families.
Organizing: Building on our existing community engagement, and coordinated with our asset development service and policy work, play a major strategic role in organizing to empower San Francisco's low- and moderate-income Latino families to improve their asset development standing.
Research and analysis: Building on our existing work, perform research and analysis to clearly understand the socio-economic conditions and asset development needs of San Francisco's low- and moderate-income Latino families, and to evaluate and improve the effectiveness of and client satisfaction with our asset development services.
2301 Mission Street / Service Integration: Through the successful development of the 2301 Mission Street project, further the provision of a full spectrum of family support and asset development services to San Francisco's low- and moderate-income Latino families and enhance the long-term sustainability of community partners providing these services.
Organizational development: Continue MEDA’s organizational development to improve and systematize efficient and effective program and operational work, financial health, and a sound and sustainable workplace.
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2301 Mission Background
Wholesale Neighborhood Displacement
Strengthening of Organization’s Financial Standing
Significant Increase in Real Estate Values
Market Rate Housing is Most Prominent New Development
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Intent of Project
Provide a stable location for MEDA to provide services
Assist other organizations serving the same constituency to secure a stable location for service delivery
Develop system for coordination of asset development and family support services
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Desired Goals/Outcomes
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Elements of Building Purchase
MEDA to establish a Limited Liability Corporation (LCC)
Limited Liability Corporation to purchase building
MEDA guarantees bank loan
Co-Owners
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Potential Co-Owners will initially be tenants
Rents will market rate and will cover mortgage, operating costs and reserves
Will participate in service integration plan
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Facility Management
Building LLC will be managed by a board of directors composed of co-owners
MEDA will always retain 51% of control of board of directors
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Ownership Interest Variables
LLC will own building Size of ownership interest will
determine share of proceeds and/or debt
MEDA will own at least 51% of membership interest
Remaining 49% will be divided in proportion to the amount of capital contributions
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Conditions for Co-Ownership
Provide asset or family support services to target constituency
Make a capital contribution to the LLC Amount to be based on: loan payment
needs, building maintenance needs, number of co-owners
First co-ownership opportunity at year 7, and thereafter at refinancing
Become a co-guarantor of bank loan
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Sale of Ownership Interests
If co-owner sells its interest, then MEDA will have first right of refusal
Co-owners will have 2nd right of refusal, outside groups will have 3rd option
If MEDA decides to sell, co-owners will have second right of refusal
Price based on project value, % of membership interest, & rate of inflation
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Conclusions
Leverage Lead Organization’s Financial Standing to Engage in Real Estate Acquisition
Engage in Co-Ownership Model to Share Benefits and Risks with Partner Organizations Leading to Long-Term Sustainability
Increase and Improve Access to Service Delivery Through Service Integration
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Remaining Questions
Do risks, benefits justify involvement by lead and partner organizations?
What are benefits to consumers without a service integration system?
Is model replicable?