Capital Needs CommitteeTownhall

Leaside United Church6 May 2012

What we have done Results to date What is next Discussion

Agenda

To survey the building and grounds to ascertain those elements needing capital improvement and future development

to explore alternative solutions to ensure LUC’s viability

to develop a strategic plan of major projects to address the needs over the coming decade, including priorities, timing, scale, fund-raising and implementation

to oversee the execution of the plan once approved by the congregation

Mandate (2009)

To extend our ministry in this community

Our obligation to ensure the future

To honour the legacy we have been given

To build on the foundation of 84 years of ministry in Leaside

To lead from a position of strength

Objective for LUC

Pattern of deficits in operating budget Declining membership Building dating from 1941 in need of major

maintenance Gym floor, organ, kitchen, roof leaks Energy inefficiencies

About 30 UCC congregations within 5 miles

Why now?

The building needs to be retained and maintained

The basic footprint of the sanctuary should be retained

Financial sustainability of the congregation needs additional revenue sources

Fits with our mission Doing nothing is not an option

Assumptions

12 May 2010 – Fabric study report 31 October 2010– Overview of alternatives 27 February 2011 – MacSween Feasibility

Study 27 March 2011 – 3 Re-development

partnering options 1 May 2011 – Amalgamation/merger 12 June 2011– Congregational report and

survey 6 May 2012 – Update and report

Townhall Discussions

Survey of the condition of the building and its mechanical systems by BB&R architects – delivered in Jan 2010

Building is generally in good condition, but needs maintenance attention in a number of areas

Total costs in the range of $1 million over 10 years

Building Fabric Survey 2010

Partner, merge, or amalgamate with other congregations

Develop or enlist new tenants; redevelop space as required Day care or similar Senior housing (not feasible on existing foot

print) Centre for community not-for-profit

organizations (wrong area to attract these tenants)

Alternative models for future sustainability

1. Maintain our present building 2. Redevelopment on present footprint3. Redevelopment with new footprint4. Amalgamation

4 Options to Consider

Proper maintenance of our current building Pros

Cheapest ($750k-1000k), good profile in community

Cons Doubtful finances under current situation;

substantial fund-raising required Limited improvements to accessibility,

environmental aspects, building code

Option 1

Redevelopment on present footprint for daycare Pros

Revenue generation; timelines achievable Achieve needed accessibility, environmental and

code improvements Eventual revenue of $300k annually available for

ministry Cons

Much higher costs ($3-5m); more fund-raising Business model risks Potential short term impact with existing tenants

Option 2

Request for proposal issued; 3 architectural firms responded

Montgomery Sisam chosen; 2 month schedule of consultation

Feasibility confirmed using north side of building

Costs refined by cost consultant Turner & Townsend

Redevelopment costs of about $3.4 million Major maintenance still required about

$600k

Refinement of Option 2

Turner & Townsend estimated the daycare building renovation to be $3.4 Million.

It is estimated that the remaining part of our building would require an additional $600,000 for maintenance as outlined in the BB&R report.

Research indicates that net rent from potential tenants is approximately $300,000/annum with escalating rent over a long term lease (e.g. 10 yrs).

Financial Analysis

LUC Congregation Fundraising $1,000,000Additional LUC Fundraising $

250,000Tenant Capital Contribution $

250,000Loan / Debentures $2,500,000Total Funding $4,000,000

Funding Scenario

Payback on a $2.5 Million loan would be roughly 12 years. With a 12 Year Payback period LUC would have an

Operating Revenue contribution of $25,000/annum and a Capital Expenditure Fund contribution of $15,000/annum.

After the 12 year period it is projected that LUC would receive a $300,000+ contribution to Operating Revenue.

In a 15 year Payback scenario, LUC would have an Operating Revenue contribution of $70,000/annum with the Capital Expenditure Fund contribution of $15,000/annum.

Financial Analysis

Daycare option is fully feasible Space is available; partner is available Very limited impact on neighbours Not for profit tenant; no impact on our

charitable status Simple governance models

However, the financing is quite challenging, and we would lose access to a substantial portion of our building

We are not prepared to recommend implementation at this time

Committee analysis

Amalgamation Pros

New members; new givings; new energy Possible financial assets brought with new partner Positioning LUC for success; parallel process Always an option in conjunction with other options

Cons Loss of old members; potential loss in givings Need for new governance Timelines appear to be long No immediately willing partner

Option 4

Continue major maintenance work as required Plan for major fund raising to respond to the full

maintenance program Are we fixing a building we cannot afford?

Explore options for cooperation with Manor Road Explore regional amalgamation interests,

including Northlea, Thorncliffe and Presbytery

How to Proceed Now?

Open discussion here or on your own time Engage the committee

What do you think?

Fraser Holman, Ken Kim, John Mills, Graham Lute, Jim Miller, Karen Whitewood, Doug Mackenzie, Rev John, John Coyne, George Heintzman, Don Forsey, Tim Burkholder, John Parker, Margaret Casey, George Hurst, Bill Pashby

Speak to any member of the committee

Discussion