Relocation Team Update
February 28, 2018 by David_Engelbrecht
At our meeting on January 29, the relocation team reached broad agreement to not pursue our current location for purchase. Initially we identified some significant benefits in purchasing the building which include the following:
- The building is a historic property. Built by the Carnegie foundation as a public library, it comes with special tax exemptions and credits for preservation of the structure.
- The building is situated in a rapidly developing area near public transit. Its inner-east location allows our existing membership to easily access our center, and would be within walking distance of the numerous new apartments being built in the neighborhood.
- The building has three floors of spaces, some of which could be rented out for revenue.
- The current owner and landlord of the building also owns an adjacent parking lot. Purchase of both the building and the parking lot would have allowed us access to off-street parking.
- The building has significant yun, or good energy, which was identified early on by consultant Eva Wong when she visited our facility many years ago. It is aesthetically pleasing and is situated in an area of the city where there is a lot of growth and vitality.
The building owner was receptive to the possibility of our purchase of the space, and provided us with a recent assessment indicating a combined building/parking lot value of $2.8 million. An outside assessment, commissioned by the Relocation Team, recommended an asking price of $2 million along with designating $200,000 in deferred maintenance costs.
We considered two options for purchasing this space. The first was the formation of a Limited Liability Corporation (LLC) composed of both members and others who would purchase and own the building with the option for us to buy from them in the future. This was presented to us as the best option, given the current Portland real estate market. In addition, we needed to consider the cost for rehab of our existing space to meet our stated needs (expansion of the shrine room, community space, classrooms, etc) and the cost of making the building handicapped accessible. Both of these projects would be in addition to $200,000 in deferred maintenance costs (above). This plan was deemed too complex given the limits of time (multi-year endeavor), staff and volunteer resources, and the cost of hiring professionals to manage these details.
The second option was an outright purchase of the building with a traditional mortgage, coupled with space renovation for short- and long-term rentals for income production. This was deemed not possible given our community’s current financial capability, and in light of our current expenses and revenue from membership dues, programming and fundraising. We base this in large part on an analysis solicited from an outside professional who examined the building’s current rental income and the condition of the property. The owner’s asking price of $2.8 million was not justifiable for us based on this analysis, nor could we meet the $2 million price which was suggested as a reasonable offer from us.
We anticipate the start of a fundraising campaign this year toward raising money for a down payment, and we will continue the search for a space that is both within our community’s budget and within the boundary established by consultant Eva Wong many years ago (bordered by the river on the west, NE Fremont St. to the north, SE Powell to the south, and I-205 to the east). We encourage anyone who has ideas or expertise in the property search to contact Mark Douglass, who will connect you with the appropriate team members.
