Fact sheet.

Fact sheet.

UPDATE AS OF APRIL 2022: The Library Board voted against the conversion to the long-term lease and has placed Coventry PEACE, and thus the nonprofit businesses located in the Coventry PEACE Building on a month-to-month holdover. They have increased our rent by 25% per month and we are still responsible for covering all the costs of the building, including a $9,127 per month payment to the Library to cover utility costs and maintenance, in addition to other costs we pay for directly to our vendors. The decision to not convert to the longterm lease has prevented key expansions from occurring, and has made it impossible for us to fill our vacant spaces because we do not have the ability to issue long-term leases. This has resulted in CPC losing out on an additional $3,000+/mo in rent from our tenants – money we would use to help cover maintenance costs, to help fund our ongoing LED lighting conversion project, and to build a reserve account for larger repairs and improvements.

The Library has decided to hire an outside building management company (a service that CPC has been providing for free, and would continue to provide if the conversion had been granted) and will soon be signing a contract with Cresco Playhouse Square to fulfill this role. According to the RFP submission by Cresco Playhouse Square, the minimum monthly fee they will charge for their services will be $2,750 plus additional hourly rates of $45-67.50/hr billed in 4 hour increments, plus new lease fees of 6% (gross rents for the term), 4% lease renewal fees (gross rents for the term) and construction management fees of 5%-10% of total job costs. This bid by Cresco Playhouse Square was apx. 50% higher than a bid submitted by Simplified Solutions, and about 400% higher than the bid CPC submitted – both of which were rejected by the Library as being unqualified bids. The Library has not yet fully clarified if this new cost will be paid for by tax payers or through higher rents charged to the tenants. 

In addition to the hiring of an outside facility management company, the Library has also hired Allegro Realty to conduct a facility feasibility study for the cost of just under $15,000. Unlike the one CPC commissioned IFF to do a few years ago, this one is not taking into consideration the programming, needs and budgets of the businesses already located in the building, and will primarily be looking at other local rent rates in order to advise the Library as to what rent rates they should charge the tenants going forward. It is CPC’s feeling that this study is redundant and not nearly as in-depth as the previous study conducted. Our preference would have been to re-engage IFF to update their study – they are an experienced company that specializes in studies for nonprofits and they are already familiar with the building and project.

We are in the midst of reconciling the accounting of the utilities fees we have paid to the Library for the period of October 2020 to the end of December 2021. During this period, the Library kept utility accounts and some maintenance contracts in their name and CPC paid between $9,127 – $10,000/mo to the Library to cover all of these costs. At the end of the term the Library provided an accounting to us which showed that CPC paid more than what the actual costs were. The Library stated that we have an overage of around $16,000, but upon our review we identified what we believe to be errors which result in the Library owing us just under $39,000. We have submitted our findings to the Library and are awaiting their response. The previous time we went through a reconciliation with the Library in 2020, they stated publicly that we owed them nearly $100,000, but after our review of their accounting it was determined that we actually owed them nothing, which the Library agreed to. Looking back at all of the accounting from the time the Library purchased the building to December 2021, it shows that CPC and the nonprofit businesses have paid over $450,000 to the Library to cover the costs of the building and rent to the Library. This is in addition to any costs we paid for directly for maintenance or improvements, or directly to vendors ourselves.

Despite CPC and our partner tenant organizations’ calls for the Library to meet with us, the Library Board has turned us down. Our current ask is for the Library Board to pause their process and hold off on signing any contracts with Cresco Playhouse Square so that both parties can meet to discuss the exciting potential of working with the Cleveland Foundation. CPC is in discussions with the Cleveland Foundation in regard to a program called Collateral Funding which has the potential of alleviating the concerns the Library has voiced, as well as the concerns CPC has. In order to pursue this potential solution further, the Cleveland Foundation has requested that our two organizations meet to discuss the details we would be required to provide to them.

—————————————–

Coventry PEACE Inc. has built Coventry PEACE Campus into a viable operation with a clear vision. Here is some background on what CPC’s leaders have accomplished, while also steering our own organizations through the pandemic.

Where things stand

For 15 months, CPC has operated under a temporary lease that was specifically designed to convert to a 99-year lease on January 1, 2022. We have met all of the Library’s requirements for the conversion outlined in the current agreement. The first indication that anything was amiss came less than two weeks ago, when we were informed that a Library board subcommittee had voted 2-1 against proceeding with the long-planned conversion. We have asked for specifics about the benchmarks that the Library expected to see, but have not received a response.

Meanwhile, our all-volunteer staff has been working on:

• growing and stabilizing our board
• finalizing an amended code of regulations
• researching and planning for a large-scale HVAC project
• organizing outreach events
• working with current tenants to secure commitments to long-term leases with increased space obligations and/or higher rent rates
• negotiating with several prospective long-term tenants
• securing short-term agreements to supplement revenue
• overseeing interior building improvements
• organizing numerous documents required by the Library to finalize the transition to the 99-year lease.

Positive cash flow & reserves

Coventry PEACE Inc. enters 2022 with $43,041.86 in the bank. Our projections show net positive cash flow in each of the next nine years and an accumulated reserve of $1,023,357.

Rent and occupancy

Tenants paid $133,022.66 in rent to CPC in 2021. CPC in turn:

• Covered nearly $128,000 in building expenses
• Paid $5,500 in rent and $107,426 in utility fees to the Library

Current tenants alone will pay $144,999 in 2022.

Three current tenants are poised to expand if the Library Board approves the long-term lease. Artful will expand by 40%, Future Heights by 20%, and Reaching Heights by 10%, bringing the building occupancy rate up to 60%, above the breakeven point. We will continue to add tenants and expect the occupancy rate to rise to 70% in year 2 and 87% in year 4.

CPC has signed letters of intent/term sheets from all current tenants for leases in 2022 with a combined average rental rate of $7 per square foot, a significant increase from three years ago.

CPC recently welcomed two new long-term tenants: Singers Club of Cleveland in July, and Grace Communion Cleveland in September. We also have several short-term agreements with Studio Institute, Lakeshore Aikido, and Pick-Up Stix, and all three have expressed interest in long-term leases in 2022. In addition, we have Sherri Skedel, Family Therapist; Dobama Theatre; and University Heights Symphonic Band in the building on short-term agreements.

Fundraising

CPC raised $12,766 in 2021, and is planning new events and campaigns for 2022. We have been informed by major funders, including the Cleveland Foundation, that the long-term lease must be in place before we can raise funds for our planned capital projects like handicap accessibility improvements, roof repairs and solar panel installations.

IFF, a Community Development Financing Institution (CDFI) that worked with us on the Feasibility Analysis in January 2020, has committed to providing technical assistance in qualifying for a loan for facility improvement.

Building improvements

Our proposal budgets regular maintenance at $12,000/year, well above the average maintenance costs for the recent past of $9,500/year. The accumulated reserve from rents and fundraising would be accessed for major repairs or improvements. CPC will pay $10,000 toward the impending HVAC repairs, and $10,000 per year to the library until the debt is resolved.

Benefits of converting CPC lease

Coventry PEACE Inc. has demonstrated its ability to manage this complex project, even through unprecedented times. With the stability of a long-term lease, the tenant organizations can thrive, continue to enrich the community and incubate new nonprofits aligned with the vision and with the 100-year history of this unique location. 

Finally, it’s important to understand that there is no Plan B. If the Library board refuses to grant the long-term lease, the tenants’ current leases will convert to month-to-month (at lower rents than under a long-term lease). No business, nonprofit or for profit, can operate indefinitely amid such instability. As the building empties, the Library will be on the hook for all costs and work currently covered by the tenants and the building will stand as a 60,000-square-foot daily reminder of what could have been.