Event:2015/07/23 Special Delegates Meeting: Buying the Building

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Attendees

  • Jenny (sudo), Jose (BAPS), Dusty (CDC wg), Helen (FNB), Sarah (finance & commons wg), yar (sudo), Matt (sudo), Daniel (sudo), Lea (BAPS), Carl (sudo), Julio (sudo)

Update from Finance WG

Current Financial Standing

  • $31K in the bank
  • After loan repayments, $24,100 remaining
  • Working with Strength in Numbers to sort the books

Monthly Expenses

  • $12,390 rent
  • Taxes & Building Insurance: $1639
    • Immediate renewals: $4093, $3345 on August 11
  • Utilities: $1042
  • 15,071 total

Montly Income

  • BAPS: $1K
  • CCL: $2K
  • LC: $1100
  • OpAl: $100
  • Phat Beets: $750
  • Sudo: $2000
  • Event rentals: $2K
  • Total: $9850

Short-Term

  • Projected: Aug rent & utilities: $15,071 + Insurance $7438
  • Total: 22,509
  • $11,441 at the end of August
  • Almost definitely will not be able to pay October rent

Discussion

  • Q: How did we get this far?
  • A: Omni's finance culture is akin to ostriches in the sand,lots of blissful ignorance. Finance WG is understaffed and doesn't always do the best job of updating folks. Overspending on building projects. Many collectives struggling to meet their financial obligations. Deficit of $8-9K per month.
  • Q: What are the ramifications of breaking the lease?
  • A: It's a matter of enforcement - John decides our fate. Could get fines, could get evicted, could go to court, or he could just be lenient and let it slide.
  • Q: Does this impact our option to purchase?
  • A: Potentially. Read the lease. Judge would decide if we lose the option by violating the terms of the lease.
  • Q: Does the landlord know the state of our funds?
  • A: No.
  • Q: What about setting up a monthly payment plan for insurance?
  • A: That's possible, talking with State Farm next week.

Background of Fundraising research

  • Berkeley Business Law student practicum
    • Recommendation: Create a for-profit subsidiary that would manage rental of the space, given that rental income cannot count as nonprofit income.
  • Discussion with lender
    • Recommendation: Contractual agreement with another 501c3 that would hold us accountable to our values. Concerned about mortgages and refinancing.
  • Discussion with Jesse
    • Recommendation: Contractual agreement with a 501c3 Community Land Trust that owns the property (Omni's 501c3 owns the building)
  • Discussion with the Sustainable Economies Law Center
    • Recommendation: Trust owns the building, 501c3 is trustee, operating for the benefit of a broad class of people
  • Regular Fundraising meetings for the past two months
    • Recommendation: Community Land Trust agreement - CLT owns the land, Omni as 501c3 owns the building

Recommendation from Fundraising

Hi, we're the fundraising WG, aka "buy the building" aka "until the revolution". People want to give us money but we need to decide a legal structure first. Right now we're a CA nonprofit and haven't applied for 501c3. We need to choose a structure that will make the donors and lenders trust us enough to give us the money. Fundraising WG thinks we should decide to incorporate as a 501c3, and give the land beneath the Omni to a Community Land Trust. We'd still own the building, and lease land from the CLT for $1/century.

FAQs

FAQ #: Who are these people with money? FAQ #: What's the timeline? Soon! Working groups may need to take fast action FAQ #: What is a Community Land Trust? Is it like a regular trust? FAQ #: What are the alternatives? FAQ #: Why is CLT the best option? FAQ #: What are the different CLTs?

What are the next steps?

  • We sign a letter of intent and create an escrow account to funnel through the major donor's money.

What are our obligations to the land trust?

  • Pretty standard terms, entails principally establishing a trusting relationship. We'd write our terms into the lease with the CLT.

Why #1 and not full ownership?

  • Ties us to another strong organization, __-__

Sarah:

  • CLT is also a political move - even were the Omni itself to fold, the CLTs have a social mission that would preserve the property for social good for 100 years.
  • Should consider if we truly want to do this!
    • Only interested in buying the building if we're also committed to transforming the culture of the community - addressing burnout, conflict, oppression
    • See buying the building and giving it to a CLT and the upcoming Omni reboot as one and the same process

Timeline?

  • Lender wants a timeline to full ownership of less than 25 years

Proposals for Consensus

  • PROPOSAL: The Omni Oakland Commons should proceed with purchasing the building.
  • PROPOSAL: Delegates meetings are back to convening weekly.
  • PROPOSAL: Omni Oakland Commons should apply for federal 501c3 status.
  • PROPOSAL: The Finance & Fundraising working groups can act quickly to buy the building.

Action Items

  • Research the variety of Community Land Trusts:
  • Get a refund from the Tax Assessors office for the extra property tax we've been overcharged for [Ben? Matt?]
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