Event:2015/07/06 Until the Revolution Working Group

7/5 'Until the Revolution' Meeting

Attendees

• Libbie, Laura, Yar, Jesse, Jenny, Noemie, Matt

Discussion

• Laura: I just want to get it done asap
• Jenny: We can always pivot, create a subsidiary or work with a land trust later. Simplest option would be to just do it as Omni.
• Yar: Yeah, the simplest option, path of least resistance
• Jesse: Prefer Omni owning both the land and the building, not ceding control to some other organization that may not be aligned. Decisions for community land trust must provide a say 1/3 to the neighboring community residents, providing community control to land trusts
• Yar: If we go with the land trust, is there any protection for us if the land trust turns evil?
• Laura: There's a legal contract they're held to, would have to be a legal
• Yar: Good to set the bar high at first - we want the building no strings attached
• Jesse: Comparatively easy to put stipulations in our bylaws than into contracts
• Yar: Really easy to do things, but also to undo things at Omni
• Laura: Need to create checks and balances. <Discussion of Jesse Palmer's recommendation of a 501c7 for creating a coop social club> - with the housing coop it came down to them wanting this to solve all their financial problems and solve all their standard housing needs (eg; proximity to BART)
• Yar: Which one sounds worse?
  • 1) 501c3 (just Omni);
  • 2) Omni creates a 501c2 subsidiary which holds the land;
  • 3) Omni makes a contractual agreement with a community land trust which holds the land and Omni owns the building (or we lease from them);
  • 4) Omni makes a contractual relationship with another 501c3 that's aligned;
  • 5) Form an actual trust, where the trust owns and manages the building for the benefit of beneficiaries (omni members) - relationship between trust / trustees / beneficiaries
• Jesse: Least favorite is naming beneficiaries - excessively complicated without many benefits. Who would be the trustees, seems kind of arbitrary. Lotta work for not much gain. As my concerns about the land trust are being answered, 501c2 also seems overly complicated - have to create another board, not many further benefits. Unless it's a technicality about whether or not we can have sliding-scale rent
• Yar: Question about whether 501c3 is allowed to collect rent as a majority of its income
• Jenny talks about the Berkeley Business Law mentors who suggested that Omni create a for-profit subsidiary for this reason
• Libby: So a land trust might trump another 501c3 as it can both provide checks and balances and hold the land?
• Yar: Do we want to replace our landlord with another landlord, or do we just want to be the landlord?
• Libby: Within the trustee model, there's turnover of the board - so we'd be our own landlord. But separation and long-term consistency key. Staggered terms for trustees
• Laura: Contract law vs. trust law, need to clarify the requirements and terms
• Jesse: But 501c2 isn't a trust, it's a nonprofit org
• Libby: So you're not into the trust idea?
• Laura: Yeah, I think we're not into the trust idea.
• Yar: which of these options is the most courageous/cowardly?
• Jenny and Libby: Courageous: Church of Omni!
• Yar: Also the most risky
• Which are based on hypothetical fears?
• Laura: there are actual examples of organizations in a similar situation to us that have facds challenges or failed and we can learn from these situations and try to prevent them. They aren't hypothetical fears. They are real things that could happen.

What do we need to do next?

• Need to figure out what the donors want
• Specifics of legalities around collecting rent
• Actually get nonprofit status - what's next?
  • Finance audit of all receipts for the past year
  • Filling out and filing the 501c3 application and getting feedback
• Research case studies of similar projects that have failed

What do the donors want?

• Lender prefers we create a contractual relationship with another 501c3
• Jesse also suggested this - ground lease with a community land trust *is* a contract with another 501c3

Requirements

• Creating a contractual relationship with another nonprofit
• Preserving the asset from being sold or financialized
• What we do is reproducible
• Consistent w/ anticapitalist values and practices
• Remain consistent with our vision and mission
• Sustainability of project over time
• Adaptability of project over time
• Threatening the status quo
• Popular control (?)

Discussion

• Yar: 'Anticapitalist values' can be further broken down. Values alone will not destroy capitalism
• Matt: Maybe better to frame it as 'what kind of a compromise are we willing to make?'
• Yar: What is the material threat to Nautilus, Google, etc;
• Matt: Also popular control, how can we frame this to give more control to the people who are building and using it, participatory
• Libbie: Need to be resilient to the near future of super-gentrification. This could be SF in 5 years
• Laura: The sooner we buy it the more likely we are to make an impact

Options

• 1. Land Trust (6.5/8)
• 2. Omni 501c3 (4.5/8)
• 3. Family Trust (4.5/8)
• 4. Church (4.5/8)
• 5. 501c2 (4.5/8)

Strategy

• Put this on the pad and lists early
• Go to every collective meeting to discuss the options

Action Items

• Check in with Berkeley Business Law folks about their recommendation proceeding from here [Jenny]
• Talk to Janelle about being able to collect rent below market rate as a 501cX [Jenny/Laura/Yar/Jesse]
• Finish presentation for delegates [Matt/Noemie]