by Clifford F. Dober

On March 17, 2017 Parasol asked IVGID to entertain  an amendment of the land lease where the Parasol building  is located

History

The land lease is for 2.39 acres and was executed in January 2000  calling for payments of $1 per year for 30 years with  three 23 year options for a potential total of 99 years. Total payments will be $99

The lease allowed Parasol to construct a 31,500 sf building financed by a grant of $6,500,000 from The Donald W. Reynolds Foundation and approximately $7,000,000 provided from other donors.

The land has a deed restriction which limits the use for park and recreational and related purposes.

In order to construct the building, in 1997 IVGID sought and obtained an amendment to the deed restriction from Boise Cascade,  the previous owner,  to allow “the construction of a building for the use of the Parasol Foundation, Parasol Foundation collaborators or the Parasol Foundation legal successors”.

Two known restrictions  of the grant by Donald W. Reynolds  Foundation  are:  Parasol cannot sell the building and must keep a  capital replacements reserve of $1,324,000.  We have been unable to review the grant.

The IVGID lease has many requirements the largest requires  Parasol to continue operating in accordance with a 2002 business plan.

The building was constructed and opened in 2002.

Currently the building has large vacancies as  Project Manna and Tahoe Family Solutions moved out.  The current occupancy  is only 15% to 20% of the building.

This would suggests that Parasol considers their business plan has failed

The existing and ever changing proposed  lease amendment

The March 17, 2017 letter from Parasol only indicates that they would like to change directions  and also states:  “The board believes that this option would not only broadly serve the whole community it would also address pressing issues currently facing the district.”

The letter provided no written  terms of their suggested modification

Since we have seen no terms of a proposal from Parasol, the IVGID Staff is  suggesting the following transaction which is currently being reviewed by the IVGID Board of Trustee:

1) IVGID will purchase the building for $5,500,000 paying        $1,600,000 in cash and the balance of $3,900,000 in five annual          installments with annual interest of 4.5%. Closing no later than January 1, 2018

2) Parasol will 1,700 sf  for 20 years at $1 per year

3) Parasol will lease 2,200 sf for 7 years at $2,500 per month to be used by existing tenants such as Shakespeare.

4) Meeting rooms and storage space will be made available in          an unknown amount.

5) IVGID assumes all risks of the building condition and all       operating expenses which according to Parasol’s audited     statements is approximately $500,000 per year.

6) All artwork, statues, donor wall plaque and chairman wall   plaque will remain displayed in the building.

So why is IVGID even proceeded with a lease amendment?

Simply put the Staff wants the building

After 4 board meetings there has been nothing presented that:

1) Parasol obtained a waiver from the Donald W. Reynolds Foundations     grant agreement to sell the building

2) There is no legal opinion that IVGID can or cannot use the building because of the deed restriction which only allows the use  by Parasol.

3) According to Trustee Matt Dent, at the May 10, 2017 Trustee meeting  43 of 45 community members who spoke  or sent e mails are in opposition to the lease amendment.

Aggressive actions by IVGID

1) Began the preparation of a new lease not an amendment.  There is no correlation with the original lease.

2) Decided that the building purchase should be made by the Community Service Fund rather than the General Fund  where the intent is to house all of the administrative staff currently in the IVGID Southwood building.   The General Fund does not have adequate revenues  and cannot  afford the required debt payments to Parasol and the increased operating expenses. The General Funds revenues are taxes capped by the State.  The Community Services Fund generates an annual Rec fee that can be raised or lowered at any time by the 5 member board of Trustees.

3) On a 3-2 vote the Board decided to transfer $1,600,000  from Community Services operating funds  to the capital projects fund for the required down payment.  This is in complete violation of board policies regarding capital project funding.

4) The board authorized to begin spending money on consultants

What is wrong with this purported lease amendment

1) Parasol is off the hook for its obligation to the community to conduct a nonprofit center

2) Parasol will get $5,500,000, get the space they need, and continue to pay $1 per year.

3) The building will continue to marquee the greatness of Parasol

4) The building cannot be used or purchased by IVGID because of deed and grant restrictions.

5) The replacement of the existing IVGID Southwood 10,500 sf administration building  in the just passed budget is a LOW priority project  not even included in the five year capital plan.

6) The Parasol building is 2.6  times the size of the Southwood building and a recent study by IVGID determined that the  office space needs are only 12,000 sf  yet the Board is considering a much larger building.  After deducting the space  used by Parasol approximately 10,000 sf would not be used.

7) Annual operating expenses because of the larger building size  will increase from approximately $200,000 to over $500,000

8) There is an unknown amount of additional retrofit and moving costs which have not been considered.

9) The building is 15 years old and will require futures capital replacements in unknown amounts

10) Operating a building  to lease for nonprofit organizations would be beyond the power granted to IVGID which is limited to recreational activates.

11) IVGID has two very high priority projects: the Diamond Peak culvert replacement and pavement of the parking lot and Skiway Blvd.  These projects are estimated to be $5,450,000 and are scheduled to begin this year.  Funds are now be directed away from these two projects.

Closing

I ask each of you to speak out to the Board of Trustees one way or another.

Kendra Wong     Wong_trustee@IVGID.org

Matt Dent           Dent_trustee@IVGID.org

Phil Horan           Horan_trustee@IVGID.org

Peter Morris        Morris_trustee@IVGID.org

Tim Callicrate     Callicrate_trustee@IVGID.org