People’s Programs emphasized collective ownership - would they be willing to co-own the building with the existing Omni Commons non-profit? E.g. a Tenants-In-Common arrangement with a 60-40 or 70-30 split for Omni vs PP, based either on how much each party brings to the table (the original $1M donation plus a decade of mortgage payments from Omni vs $890K from PP), or based on the current value of the building.
Feedback from Jesse, our lawyer:
(1) Two non-profits can co-own a commercial property as tenants in common. You would need to have an agreement regarding each party's rights and obligations. I've written residential TIC agreements and roughly similar items would have to be agreed upon in a commercial situations:
-- who gets a right to use which portions of the space. Some portions can be exclusive use areas and others can be common areas.
-- who pays what
-- how decisions about the common areas are made
-- what happens if one party fails to pay for their share
-- what happens if one party wants to sell their share
If Omni and PP want to go this direction I can get you a more precise list.
(2) I don't think a 60 / 40 split is reasonable given the numbers. The split should be based on the current value of the property, not the amount Omni put in. If the building is worth $3 million and PP puts in $890,000, they should get a 29.66% share.
This matters because a TIC owner has a right to sell their share. If PP gets a 40% share and a year later they want to sell their share, they will reap a significant windfall.
(3) If Omni transfers a portion of the building. the portion transferred will be reassessed for property taxes - which may not make any difference if you get the welfare exemption.
(4) Two or more parties can create a partnership or an LLC and own property through the partnership or the LLC. A lot of the same issues that relate to a TIC also apply to a partnership or an LLC. I'm not convinced there are advantages to co-owning the building in this fashion but it could be that advantages would become more evident if Omni and PP wanted to co-own the property.
If both entities are non-profits, then Omni does NOT need to get fair market value for the portion it transfers.
Regarding valuation, the parties can hire a commercial appraiser who will come up with a number. I hired an appraiser in a similar context earlier this year and I think it cost $3 - $4,000 -- and it took 2-3 weeks. I think the appraiser I hired did an excellent job in that situation. - jesse
Sudoroom will have to have another meeting this Wednesday night.
The last delegates meeting had Peoples Programs present, asking for Omni
Commons to give them the building outright. There is a proposal they made
which is light on details but they were clear in the meeting that they wanted
to take complete control of the Omni Commons, although they claimed they would
allow present tenants to stay.
They are trying to pressure us into making a decision "ASAP" because they are
very excited about being handed a $3M property for $800K with no strings
attached.
Our lawyer is very clear that we have 90 days from a "notice of default" from
our present lender (which they can't even do until after January 1st) before
we need to come up with money to keep the building. There is no reason to
rush into any decision, even if we thought it were a wise decision to make.
Sudoroom and CCL members are moving forward with forming an LLC legal
structure so that people can combine their funds to replace our lender, which
will keep Omni operating the same was as before. I am confident that we can
get that together before the foreclosure deadline, in case we don't find a
normal lender willing to give us a loan. I and others are working on that too.
If we do nothing, and allow our lender to foreclose on the building and sell
it at auction, Omni Commons will be paid out from whatever surplus sale price
the building brings in, meaning probably $1M to split (somehow) between
existing collectives, to allow us (together or separately) to find a new
space.
We need to discuss this and make sure our delegate has a clear position to
represent sudoroom at the Thursday meeting. There will be a lot of pressure,
as I described above, for us to agree to a hasty and irrational decision.
-jake
On Wed, 13 Dec 2023, Jake wrote:
> here's a link to the last Omni Delegates Meeting notes from last Thursday
> where the in-person proposal was made by Abbas of Peoples Programs:
>
> https://omnicommons.org/wiki/Event:2023/12/07_Delegates#peoples_programs_proposals
>
> We are here to meet now in person, please show up or join in the video link
> below.
>
> -jake
>
> On Wed, 13 Dec 2023, Jake wrote:
>
>> In case people haven't heard yet, Omni Commons is facing foreclosure
>> starting on January 1st since our present loan is expiring and we have not
>> found a new one.
>>
>> We as Sudoroom need to meet and discuss the situation, spread awareness and
>> give our delegate instructions on how to represent us when they go to the
>> Omni Delegate's Meeting tomorrow night (thursday).
>>
>> We will be meeting in-person at sudoroom AND have a portal open to the
>> internet through Jitsi, at this URL:
>>
>> https://meet.waag.org/turtlesturtlesturtles
>>
>> We will try to convey things through the telepresence portal but it will
>> certainly be easier to follow and participate in the meeting if you are
>> in-person, so please consider that.
>>
>> We will open an on-line notepad and share in the process of taking notes,
>> and that URL will be shared at the beginning of the meeting. Please
>> consider showing up just to help take notes if you're a fast typer!
>>
>> -jake
>>
>
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