A) According to Chairwoman Wong, Parasol will be on the Agenda of every Board Meeting until the Board reaches a decision. She also stated that a Public Meeting would be dedicated to the Parasol Proposal

Q) What is the Parasol Purchase?

A) In the late 1990’s Parasol made a pledge to IVGID citizens, the Donald W. Reynolds Foundation, private donors and community non-profits to construct, operate and maintain a Community Non-Profit Center that would comply with its long term Business Plan. In response to this commitment, IVGID citizens generously leased Parasol 2.3 acres of our land at $1/year for up to 99 years. The Donald W. Reynolds Foundation granted Parasol $6.5 million to construct the Center and private donors contributed millions more for the building’s programming, operations, maintenance and capital improvements. Many of our local community non-profits welcomed the opportunity to occupy the Center as resident non-profits. Others also welcomed the leadership, training, meeting room space and financial support Parasol promised to offer. The Center’s operations went well from 2002 through 2009. At that point, Parasol defaulted on the terms of its land lease agreement by materially changing its Business Plan without the required IVGID Board approval. Over the past few years, Parasol decided not to renew most resident non-profit leases and the tenants were forced to vacate the building. Two of the largest tenants: Project MANA and Tahoe Family Solutions no longer occupy the building. Project MANA had to find new space in the Spring of 2016 and Tahoe Family Solutions left in January 2017. At that time, Parasol further breached its Lease agreement by decreasing the Center’s occupancy. In short, they were emptying the building of the non-profits the Center was constructed to support. In March, Parasol requested IVGID amend the lease and proposed that IVGID purchase the Leasehold Improvements (the 31,500 sf Non-Profit Center) for $5,500,000. The terms Parasol proposed included a $1,600,000 down payment and five annual principal payments of $780,000 plus 4.5% interest. IVGID General Manager Pinkerton presented the Parasol proposal as a great opportunity for IVGID to acquire much needed Administrative Office space.
While IVGID knew Parasol was in default on the terms of its Lease, the attorney representing IVGID flat out stated that Parasol was not in default.
IVGID began their due diligence process by hiring consultants for building appraisal, space plans, retrofit cost estimates and an estimation of moving costs. They also hired a consultant to determine the cost of remodeling office space at the Rec Center into a workout room in order to relocate the 10 Recreation Center employees into the Parasol building. These employees would join IVGID’s Southwood Building Administrative staff of 24 in the Parasol Building. Ironically, if the two staffs were combined, the space for all 34 already exists in the Southwood Building. The amount of exclusive Administrative Space in Parasol’s proposal is essentially the same 8100 square feet available at Southwood.
At this time, the total anticipated costs have now reached $6,236,000 and are climbing. This does not include future interest payments and other annual expenditures.
The Building appraisal is only $3,500,000 and there are several legal issues related to the land use conditions, covenants and restrictions which will determine what entities can or cannot occupy the building. There are also matters related to determining whether the Community Services Fund is the appropriate District fund to acquire the leasehold improvements.

Q) Why are we buying Parasol if we are short money?

A) At the last board meeting, General Manager Pinkerton presented erroneous numbers to the Board of Trustees through a “stress test” attempting to show the District had adequate funds. A member of the community found several mistakes in the presentation wherein there is not enough money to buy the leasehold improvements from Parasol. Trustee Horan asked Mr. Pinkerton to correct the mistakes. After two weeks the presentation has not been changed. What action the board will take is yet unknown.
Q) How do you determine if you need three or four votes for the Parasol Purchase?
A) Anything purchased for cash requires only 3 Trustee votes. If the purchase is made in installments, a resolution must be adopted by 4 of the 5 Trustees to approve the installment purchase agreement. This Agreement must also be approved by the Executive Director of the Nevada Department of Taxation.

Q) What are the other options if Parasol is not purchased?

A). Lease some space for 5 years as new Administrative Offices was not on the District’s Five Year Capital Improvement Plan or in the District’s Fiscal Year 2018 Budget. There is also a Plan to build a 12,000 sf building next to the Recreation Center which is actually the better idea. The District can also research other commercial buildings available for sale –if the Board has chosen to make Administrative Offices a new top priority.

Q) How do we buy Parasol when we already own it?

A) IVGID owns the land upon which the Parasol building was constructed. The law is quite clear that when the building is attached to the land, it becomes the property of the landowner. The only exceptions would be a lease provision that allows the building to be removed by the tenant at the end of the lease term or if there are terms in the lease that require the landlord to reimburse the tenant for the leasehold improvements. Parasol does not have any of these rights under the land lease agreement. What IVGID is actually buying for the proposed $5.5 million –is the right to take possession of the building which means terminating the existing lease. Another lease must be drafted for just the meeting and storage space which Parasol currently occupies and wishes to retain in the building.

Q) Why did Parasol “kick out” organizations such as Tahoe Family Solutions and Project MANA?

A) Parasol chose not to renew several leases, thus the tenants had to vacate. The reasons are different depending upon who you ask. One source stated that Parasol determined that the Community Non-Profit Center would best serve the community by supporting recreational and cultural oriented non-profits over those that served other essential needs and services. Another source was of the opinion that there was a back room negotiation with Senior IVGID staff open to supporting a Parasol lease buyout if Parasol could clear out the largest non-profits so IVGID could obtain exclusive use of about 8,000 square feet for administrative office space. We don’t have the facts here and are only sharing others’ speculation. We, however, find it quite disturbing that the two largest tenants once occupying approximately 9,000 sf of space –Tahoe Family Solutions and Project MANA which provided enormous resourced to so many, including the poor and the struggling, were asked to leave and had to find alternate quarters.
Q) Why are we paying $5,500,000 when the Chief Executive Officer of Parasol indicated the lease had no value and IVGID is the only buyer?
A) At a meeting sponsored by Get Out The Vote, Parasol Executive Director Claudia Andersen did in fact state that the building was worth nothing as IVGID was the only buyer. Since all of the data presented to date would indicate the lease buyout has little value we would expect reason would prevail and a reasonable price is presented. We, however, believe that Parasol should hand the building over to IVGID for free as they are in default and do not want to carry on with their business plan.

Q) Why would an architect be hired and paid to do a remodel plan for a building we don’t own yet?

A) Smith Design Group was hired to do some schematic space planning in order to see if the existing configuration of the office space could accommodate IVGID’s needs. This is quite common. As a result, it has been determined that the 24 employees from the Southwood Building and the 10 employees from the Recreation Center could fit in the space allocated for IVGID in the building. The schematic planning revealed that IVGID would receive only 26% of the space; Parasol and the remaining resident non-profits would receive 13%; the common usage areas such as meeting rooms, commercial kitchen and storage areas 25%; and 37% for corridors, stairwells, reception area, elevators, bathrooms and break rooms. So at the end of the day IVGID gets exactly what they already have at the Southwood building. The estimated costs so far above the $5,500,000 for the building is $736,000 for other expenditures.

Q) Why are we not discussing the other options that IVGID is looking into besides Parasol?

A) IVGID has apparently shut the door on other options indicating that none of the vacant space in the town fits their needs. We find this remarkable since right across the street on Southwood there are two small office buildings that would meet their needs. Remember, all of this is occurring so 10 employees can move out of approximately 2,000 sf at the Recreation Center so that the 2000 sf can be converted into another workout room costing $175,000. Using the most optimistic projections, we cannot see the creation of any new revenues that would justify such an expenditure.

Q) Why is a lease modification required rather than a bill of sale?

A) We have been confounded by this. How is it possible that one could modify a lease and cancel it at the same time? Unfortunately, IVGID legal counsel, Jason Guinasso has very little, if any, real estate experience. His 2014 resume indicates his practice was almost exclusively on employment and labor law. A bill of sale will have to be used as that is the only mechanism to transfer personal property which is what the lease is.

Q) What was the methodology used for the remodel of Parasol?

A) A space planner was hired to determine how the building could be retrofitted to accommodate IVGID’s proposed use of the space.