Event:2024/07/30 Delegates

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CAST office hours - 07/30 2024 6-7pm

  • Shreya - we are not in position to act between a buyer and seller. But we are able to review any documents, pro formas. This might be a good time to start transition planning, I know some groups have already started this. We are happy to support in that process too.
  • Patrik - would like to share an email from our lawyer, correcting some of the timing for foreclosure. Would love to hear a second opinion. May 17 was recording, so that is when he says clock starts ticking. 3 months after that would be August 17. 5 days before that they can do notice of sale, August 12. 20 days after is earliest they could have a sale, which is September 6. Legally could pay back any time before the sale. This does extend our timeline quite a bit. Do you think this would make a difference for CAST's funding leads?
    • Shreya - that is excellent news. Yes I passed along that information.
  • Dane - I reached out to Sogorea Te land trust, they were interested but would need more time and would like to know the exact number. For me that would be the group that I would want to move towards. Would Mulberry be willing to take a smaller portion as a leverage?
    • unlikely for extension at this point
  • Ajay - someone was trying to tell me that title is now in hands of whoever owns Mulberry's debt?
    • Shreya - my understanding is Mulberry owns it, but has contracted with a third party to handle foreclosure.
    • Ajay - the person talking to me made it sound like it was too late at this point to pay off loan, but if no one else verifying it, I will assume not true. I'm also curious about the past, and how to get exact foreclosure timeline?
  • Yar - my question is when does the 900k go up? Like once a bid is made? What I care about most is saving building from demolition. Rather see it go to another group who wants to preserve the building, if thats what it takes to preserve the building
    • Shreya - This would be a good question for mulberry
    • Patrik - expect notice of sale, early as Aug 12, should include a finalish number in there
    • Yar - People who want to buy the building want to know when the deadline is to still buy at 900k
    • Patrik - Sep 6
    • Shreya - yes, timing would be end of august
    • Yar - if money could show up in escrow early september, could that potentially prevent auction?
    • Shreya - sooner is better. Challenging to know how flexible. Racing the clock here.
  • Phillip - shortest timeline would be Aug 15 not 17, that is soonest they could remove title from omni. 20 days from that is soonest it could be listed for sale. Placer foreclosure inc is who is listed on the letter. Any time after Aug 15 could be really hard, because would need to roll things back. Their interest is going to be in selling more than loan amount.
  • Phillip - Update from me, which is good but not solid news: I have a lender lined up, but they have some contingencies. Working with our lawyer to draw up an LOI. Omni delegates and officers would be replaced by CiM team. Giving the lender a tour of the building soon, they have been there a number of years ago. Seeing we have more time now, going to use that time to reach out to other lenders who can make smaller loans (though still greater than $10k each). I've been working full time on this. Hopeful, but still everyone please assume that we need to be out of the building in Sep until further notice, just to be safe.
  • Phillip - have one person willing to put house on the line as collateral. Have two soft commitments of about $100k each. That's maybe enough already to convince the main lender to agree by next week. In the meantime, we have these extra 10 days, if you know anyone, we can only take maximum of 10 people in this loan, so I'm leaning 50k or more, if they want to throw it in, they will loan at 10% for 3 years, or earlier if we refinance or pay it off. Now with the prime lender lined up, dont need to ask for the full million. Guarantor would also help. If we can get folks to put in money now, hope is they will come back again, not a one time thing, if we are wanting to keep this building going for another 100 years.
    • Patrik - do you think you would have a draft for bylaw changes by Thursday?
    • Phillip - Don't think there's a need to change much. I would need to remove consensus voting in bylaws. Jesse wants protections against selling the building which is fine, because that is not my intention. I want protection that CiM staff I would bring in wouldn't get voted out immediately.
    • Patrik - any guesstimate on rent increases needed?
    • Phillip - I have asked CAST and a few others to look at my projection spreadsheets. Once I get some feedback on those projections on increasing tenancy, I can make projections. What is needed is realistic rates that prevent us from getting in this same situation again in the short term. Near term will probably need rent increases until we get more utilization. I am trying to figure out what is the most equitable and makes sense. A flat sq footage rate doesnt make sense here with what we are trying to do. Ballpark 25-30% increase [?]. Patrik, can you share properties you are looking at? I can use that as a maximum limit. I think we will stay way below that.
    • Cere - Phillip when you are talking about pooling funds, that would be with CAST managing?
    • Phillip - I have a property management team that would be coming in. Open to working with CAST, I am talking with them but still building a relationship.
    • Shreya - we are not in any formal agreement to partner. Development deals are a big deal, and CiM is brand new to us. CAST was proposing to form a newco, that would dissolve governance structure, but invite it into a new one
  • Paige - I shared this ranked list of potential outcomes with Jesse. It's based off an old straw poll and my impression of delegate's opinions in meetings. It has outcomes with CAST at the top, CiM partnership allowing Omni to stay in the building after, then selling the building to aligned org, and lastly (least preferred) foreclosure. Would be good to talk about this again. Actual ranking will depend on having more details, too.
    • Yar - to me, most likely option sounds like selling the building. If any org that wants to preserve the building, we should be preserving this. Once this building is gone, it will never come back. That will impact the entire city. I find it hard to think in any other terms at this point
    • Shreya - thats right Yar. CAST has mostly exhausted its options. Open the floodgates, follow any needs. Folks with liquid cash or lenders you may know
    • Phillip - selling also takes time to process
    • Peter - I am wondering if we can align people who can put up the cash with Phillip's proposal. From what Paige said, Phillip's approval is still preferred to selling the building
    • Phillip - my proposal would keep collectives in the building
    • Patrik - Theresa also has found someone interested in buying building and keeping tenants. This is new and don't have details
    • Yar - I appreciate effort to stay in the building, but need to be attaching strings to deal. We would be betraying Oakland, need to choose our role, of letting this building be knocked down for selfish reasons or not
    • Patrik - I want to push back on what Yar said. The purpose of nonprofit Omni Commons, is education of public, scientific research, and to provide relief to the poor, distressed and underprivileged. Would be great if we could save the building, but I think our first duty is to the organization, not to Oakland.
  • Cere - I wanted to make sure I understand. In my mind two different things, one is save the building, maybe we can pool money or a single benevolent person. If we have that person that wants to buy the building, are we assuming they will want to buy the building and keep the collectives intact?
    • Paige - it'll depend on buyer. Right now reaching out to "aligned orgs." Wouldn't want to sell it just to someone who would use it like a residence or something just to save building... we would like to stay in building, but if there's an org doing good work, we would consider passing it off to them, even if we don't get to stay in the building.
  • Peter - given now we have a bit more time, Shreya, very much urge that CAST try and get their leads to reconsider lending.
    • Shreya - yes this is the plan, we will follow up with our leads.

End of Meeting

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