DEMOCRATIC COMMUNITIES

FUND

A Pathway to Responsible Community Ownership of the Renaissance Center

Fund for Democratic Communities May 24, 2013

620 S. Elm St. Greensboro, NC 27403 f4dc.org ~ twitter.com/f4dc

Executive Summary
The best option for ongoing community wealth building in Northeast Greensboro is to for the City to allow the community to purchase the Renaissance Center in Northeast Greensboro. This document maps out the pathway to that end. Community ownership is made possible by the development of a Community Land Trust (CLT). This community-controlled entity would buy the shopping center from the city using a combination of financing including accumulated profit from the operation of the Renaissance Community Coop, financing from SelfHelp Credit Union and possibly some loan assistance from the City of Greensboro. Debt service would be repaid using the funds generated in the net operating income of the shopping center with a balance of funds available to finance other community projects. This analysis includes provision for vacancy rates and fulfilling the existing lease agreement to Family Dollar Store. Three scenarios of purchase and ownership are included, each having different dates for purchasing of the property and the retirement of all debt. Also analyzed is the rate and amount of accumulation of community wealth under each scenario. Spreadsheets are attached that summarize these scenarios. This document also looks at the process of preparation of the community group to exercise the responsibilities of ownership through a Community Land Trust. Our hope is that this document will illustrate possible pathways to community ownership of the Renaissance Center and help the City Council to be able to evaluate community ownership of the Renaissance Center as a serious option as they decide the fate of the shopping center.

Background
For more than a decade, residents of Northeast Greensboro have been faced with the run-down, nearly empty Renaissance Center (formerly the Bessemer Center). In its current decaying shape, the Renaissance Center is an eyesore and a symbol of economic desolation. The City of Greensboro, recognizing the need to turn this situation around, committed to improving the area. In 2008, the City purchased the Center, and then built the beautiful McGirt-Horton branch library on the front quarter of the property. Extensive community discussions and negotiations with the City established several ways the community wished to see the balance of the buildings and property be put to use. Concerned Citizens of Northeast Greensboro, Citizens for Economic and Environmental Justice (CEEJ) and others who participated in the many forums, charrettes and endless meetings believed that they were on the road to a vibrant, healthy facility that would meet a range of community needs, including a full-service grocery store, a health facility, job training, and other retail and commercial opportunities. Sadly, these efforts to turn the shopping center around sputtered and stalled. Taking matters into their own hands, residents of Northeast Greensboro began working together to meet the long-standing community need for a full-service grocery store. They formed themselves into the Renaissance Cooperative Committee and are making great strides towards turning their dream into a reality. The Committee is on track to open the Renaissance Community Cooperative (RCC) Grocery Store by June of 2014. They completed a market study and pro forma business projections that establish the viability of the project. Since then they have promises for over $745,000 towards the $2 million needed to open the store. The City is now contemplating whether to maintain ownership of the center or sell it to a private development

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

group (with the RCC grocery in the mix either way). City Council is weighing which of these two paths will cost-effectively lead to a turn-around of the Centers and the communitys economic fortunes. There are many factors to be weighed, including the question of whether it is feasible and appropriate for the City to own and operate a retail shopping center. On the other side, there are questions about whether private ownership of the Center will lead to the kinds of stores the community wants that meet real community needs, or will it result in extractive slum type stores that do little in the way of providing jobs and building community wealth and health. The logic of profit alone as a business motivation creates these types of stores. This logic requires that businesses strive simply to make the maximum profit. It means that they must take advantage of every opportunity to make a sale. They will utilize every fad, every prejudice, every weakness and every dependency existing in the neighborhood in order to sell at the highest allowable price while making the lowest possible expenditures on wages and benefits and providing as little upkeep and maintenance as possible to their facility. This is especially true in neighborhoods where business patterns are such that there is little competition and a captive audience with no worry about the need to provide high quality goods and services. We see this now with the businesses that intentionally seek to locate in what they perceive as low-income neighborhoods. There is a Third Option: Community Ownership There is a third path, however: the community could buy the Renaissance Center and democratically own and control it, using it as a major asset to leverage on behalf of ongoing community wealth-building. Some people have raised concerns that this is not a realistic option, saying that the community is not now and will not soon become capable of purchasing or governing a shopping center. We at F4DC dispute this bleak view of the current and potential capability of the community. After working closely with the RCC Steering Committee and other Northeast Greensboro organizations for more than a year, we have a gained a good sense of the communitys current and emergent capabilities. We see a clear pathway to responsible community ownership of the Renaissance Center within the next four to ten years. Structure and Purpose of this Document The purpose of this document is to map out the pathway to community ownership of the Renaissance Center so it can be evaluated as a serious option while the City Council makes up its mind about the fate of the shopping center. There are three main questions to answer, to assess whether this community ownership of the Renaissance Center is a viable option: 1. Can the community raise the money to purchase the Renaissance Center? 2. Are there viable forms of legal ownership and governance that would allow a community to responsibly and democratically own and operate a shopping center? 3. How will the community gain the requisite capabilities to pull this off? In the next three sections of this document, well attempt to answer each of these questions. But before that, well discuss the benefits of community ownership to the immediate community surrounding Renaissance center and to the City as a whole.

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

Readers should note that this document is speculative in nature, even as we attempt to anchor our speculations in realistic assumptions. It is not a prospectus, pro-forma, statement of commitment, or formal feasibility assessment. Nor is it a business plan. Its purpose is to provide rough-cut, good faith estimates and information that help to answer the question of whether there is a realistic pathway for the community to assume ownership of the Renaissance Center. Our hope is that this document will help elected officials in the City of Greensboro and community members decide that it is worth continuing a serious conversation about whether and how the community can step up to purchase and operate the Renaissance Center.

The importance of Community Ownership

There are some who question why the community should own the real estate in which community owned businesses operate. While the RCC Community and F4DC strongly prefer that it be owned by the city, the RCC Coop Grocery Store could possibly exist inside a shopping area and building owned by another developer as is the case with Deep Roots. The reason that we think we should move down the path toward community ownership is because it is clearly better for the community. While community ownership comes with greater responsibility, it will create opportunities to stabilize the community, and opportunities to create, accumulate and retain wealth that will improve the quality of life in the community for years to come. The ownership of the center is both a business opportunity and an opportunity to enhance the community in the following ways: the ownership will bring in revenues from the rental of business space to other businesses the ownership will allow the community to select which businesses are brought into the community and to decide which businesses are not welcomed there by the regulation of rent structures (within the business limits of what is needed to handle the debt service) the community can offer incentives to particularly desirable tenants who will have a significant impact on the community i.e. health facilities, job training facilities, community arts, recreation, culture, history, etc. As important as it is to select good tenants, it is also important to exclude tenants that do not contribute to the community and instead extract the communitys limited wealth. Unhealthy fast food, predatory lending establishments, high priced rent-to-own centers, and speculative businesses such as sweep-stakes parlors that prey on community members economic uncertainty do not help the community reach its full potential. Even the provision of creating jobs doesnt help very much if the jobs are at or near minimum wage and without benefits. A study done by economics professor Christopher Gunn of Hobart and William Smith Colleges, using standard industry data, shows that in a typical McDonalds franchise the total surplus exceeds the payroll and of that surplus, more than 75% is taken out of the community (Reclaiming Capital, Cornell University Press, 1991, 28-29). In contrast, community ownership of the shopping center will ensure that the majority of the surplus generated by the co-op grocery and the shopping center will stay in that community. It will be controlled and managed by the people who live there, put back to work developing economic strength, quality of life, and general well-being that community desires. We think that creating good jobs and community wealth must be the objective of community economic development. The city has a commitment to help alleviate some of the long standing inequities that are evident in the disparities that numerous studies, including the recent parity study, show and that are reflected in the lives of Greensboro residents. The citys use of economic incentives for job creation along with its involvement with community

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

redevelopment efforts are expressions of that commitment. Helping to create the democratic structure and the opportunity for ownership of the Renaissance center as a hub of the economic life of this northeast Greensboro community will be important steps on the road to equity in development. Cities across the country are in similar positions. The current economic crisis increases the urgency of these efforts at equitable community development, but it did not create it. Greensboro will have the opportunity to be a model for other cities in answering the questions on the minds of many: How can we best develop the economic and physical infrastructure that will allow all of our neighborhoods the chance and the means to help themselves? The balance of this document is intended to bring the answer to that question closer to us all.

Question 1: Can the community raise the money to purchase the Renaissance Center?
Purchase Price of the Shopping Center The first step in answering the question of whether the community can raise the money to purchase the shopping center is to establish an estimate of its purchase price. The Citys own studies show current fair market value (FMV) for the Renaissance Center at $490,000. An April 2013 report prepared for the City by Michael Watts estimates a projected FMV of $1.9 million, should the City invest the roughly $2 million it is considering investing in improvements. We assume the communitys purchase of the shopping center would take place after the City has made its improvements, so we will use Watts estimate of $1.9 million as he purchase price. Of course, if the Center takes off over the next few years and becomes a bustling, vibrant shopping destination filled with tenants paying high rents, the FMV will go up. Thats not the scenario we have data or experience with, so in this paper, well not consider this as part of our analysis. Even if the FMV of the center goes higher, the rents that could be charged would go up accordingly, which would cover the debt service on extra financing needed to cover the increased purchase price. We note that the City will consider its own fiscal concerns in setting a purchase price for the Renaissance Center. But the City also has public policy interests in the economic and community development of Northeast Greensboro. Thus, making the shopping center affordable to the community may be a choice that influences the City downward in setting the asking price. However, for purposes of this analysis, well work with the $1.9 million figure. Financing the Purchase of the Shopping Center -Net Operating Income from Rental of the Shopping Center In all scenarios in which the community purchases the shopping center, the presumption is that the net operating income from the rental of stores in the center would be used to cover any debt service related to the financing. In the attached spreadsheet, we do a quick-and-dirty, non-discounted, non-depreciated, non-inflated cash flow analysis where we calculate an annual net operating income, before debt service, of $91,414 per year. We based our revenue and expense figures on explicitly named assumptions drawn from the Michael Watts report and the May 20 proposal of New Bessemer Associates. With a healthy reserve of .35 per square foot included, we think that our assumptions are quite conservative. Thus, we see the $91,414 figure as a lower bound estimate on annual cash flow.

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

Financing the Purchase of the Shopping Center - Equity To obtain the $1.9 million purchase price, the community would bring a minimum of $400,000 in equity to the table, with the balance financed by Self Help Credit Union and, perhaps, the City. In all scenarios, the largest part of the equity stake would come from surpluses generated by the RCC grocery store. RCCs cash flow analysis suggests that the RCC can contribute a minimum of $250,000 of surplus accumulated during the first five years after launch, and as much as $800,000 over ten years. We believe that the RCCs governing body would agree to using a significant portion of its surpluses over the first five to ten years of its operation, for a couple of reasons: Within the RCC community, there is already a great deal of supportive conversation about the longer-term goal of purchasing the shopping center. Members of the community see ownership of the shopping center as good for the co-op as well as connected to the co-ops larger mission of contributing to the communitys ongoing economic development, health, and well-being. The RCC Steering Committee is aware that it is asking for a very affordable monthly rental rate, and this low rent is one reason the surpluses are expected to accumulate. In a sense, the RCC sees the low rent arrangement as a trade-off for the uses of its surplus to benefit the community in the first five to ten years. Rounding out the RCCs contribution to equity, we are confident that we can raise an additional $150,000 in donations and grants from individuals as well as local, regional, and national foundations. It may well be possible to raise considerably more financial support from foundations and government sources, which would be applied toward increasing the equity stake: there is a great deal of interest nationally and regionally in the use of community land trusts as a tool for turning around blighted areas and rebuilding local economies. However, in the interest of presenting responsible scenarios, were holding to the conservative figure of $150,000 for donor, foundation, and government support. Financing the Purchase of the Shopping Center - Lending F4DC has had a preliminary conversation with Self-Help; they have indicated that they could bring financing of up to $1,500,000 into a deal in which the community purchases the shopping center from the City, holding the land and buildings as collateral. While Self-Help has the capacity and interest to meet all the need for outside lending, the debt service on $1.5 million is too big to be covered by the annual net operating income from the center. That shortfall can be addressed in two ways: (1) the City of Greensboro could participate as a 0% interest lender in a subordinate position to Self Help, thus lowering the cost of borrowing, or (2) the community can wait longer to purchase the shopping center, which would allow more time for a larger equity stake to be raised (from RCC surpluses). Lots of Ways to Accomplish The Purchase: Three Possible Financing Scenarios Please see the attached spreadsheet in which we compare three different financing scenarios, with different timelines and implications for cash flow. Scenario 1: The community is able to purchase the shopping center in 5 years and pay off the debt within 40

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

years of purchase (45 years from now). Down-Payment: $400,000 (21% equity) $250,000 from accumulated surplus from grocery store $150,000 in donations and grants from local, regional, and national foundations Lending: $1,500,000 (79% financing) $800,000 @ 4% over 20 years from Self-Help (annual debt service in years 1-20 is $58,174) $700,000 @ 0% over 40 years from the City of Greensboro (annual debt service in years 21-40 following payoff of Self Help note is $35,000) Note that in Scenario 1, the debt to Self-Help is retired before the Citys debt begins to be paid off. Scenario 2: The community is able to purchase the shopping center in 10 years and pay off the debt within 15 years of purchase (25 years from now). Down-Payment: $950,000 (50% equity) $800,000 from accumulated surplus from grocery store $150,000 in donations and grants from local, regional, and national foundations Lending: $950,000 (50% financing) $500,000 @ 4% over 15 years from Self-Help (annual debt service in years 1-15 is $44,381) $450,000 @ 0% over 15 years from the City of Greensboro (annual debt service in years 1-15 is $30,000) In Scenario 2, both the City and Self Help are paid back within 15 years of purchase. Scenario 3: The community is able to purchase the shopping center in 10 years and pay off the debt within 20 years of purchase (30 years from now) Down-Payment: $950,000 (50% equity) $800,000 from accumulated surplus from grocery store $150,000 in donations and grants from local, regional, and national foundations Lending: $950,000 (50% financing) $950,000 @ 4% over 20 years from Self-Help (annual debt service in years 1-20 is $69,082) The City does not participate as a lender in Scenario 3. Self Help is paid back within 20 years of purchase. Community Wealth Building

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

The three scenarios have different implications for the goal of building community wealth, as can be seen in some detail in the Comparison spreadsheet. From the perspective of community wealth-building alone, Scenario 2 is both the fastest and the most effective, achieving full community ownership of the shopping center by 2038 (20 years earlier than Scenario 1 and five years earlier than Scenario 3), and generating almost $2.5 million in cash by 2058.

Question 2: Are there viable forms of legal ownership and governance that would allow a community to responsibly and democratically own and operate a shopping center?
Community Land Trusts Across the U.S., communities are turning to community ownership of real property to accomplish a number of goals: building community wealth, renewing decaying residential and commercial properties, providing economically sustainable opportunities for affordable housing and commercial development, combatting the destabilizing effects of gentrification, and gaining community control over the environment. Many communities are using the 501(c)3 non-profit Community Land Trust (CLT) as the legal formation to manage community ownership of shared real estate assets. The closest CLTs we know of are in Orange County (Community Home Trust) and Durham (Durham Community Land Trustees). For information about CLTs, check out these websites: Durham Community Land Trustees, www.dclt.org Community Home Trust, www.communityhometrust.org Burlington Associates, www.burlingtonassociates.com National Community Land Trust Network, ww.cltnetwork.org Institute for Community Economics, www.iceclt.org While most CLTs have focused on housing stock, some are purchasing and managing commercial property as well. Governance In this preliminary discussion, we dont want to go too far in specifying the details of how the land trust should be set up or governedthese are matters that have to be worked out in the community among the people who take the responsibility of forming the land trust, working with knowledgeable legal and financial experts. However, we think its appropriate to talk about the need for authentic democratic governance structures and practices to be in place, embedded within a strong Policy Governance framework. We are sometimes asked how it is possible for a whole community to operate a grocery store, a shopping center, or any kind of business. Some people believe that if there are not one or two people at the top, then all decisions will be labored and fraught, requiring far too much patience and taking far too much time. Policy Governance is a system of governance that clarifies the roles and relationships of membership, board, and management. Policy Governance is widespread in the cooperative movement, because it allows for coherent, flexible, and effective day-to-day management of business operations, while long-term policy, strategy, and direction are determined

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

by the membership, either directly in the annual meeting, or through their elected representatives, the Board. Roughly, Policy Governance applied to community ownership of the shopping center would work like this: the CLT would be established as a non-profit membership-based organization, consistent with North Carolina and federal non-profit law. The membership would elect the Board and decide major strategic direction in an annual meeting. The Board would follow that strategy in establishing policy. The Board would also hire or contract and supervise professional management for the shopping center. The management would run the day-to-day operation of shopping center, following the policies outlined by the Board. The management is accountable to the Board. The Board is accountable to the Membership. This model affords tremendous flexibility to management. As long as the management successfully enacts the strategic direction and follows the policies established by the Board and the membership, it is free to carry out operations in the way that works. This enables the daily operations to be carried out efficiently and effectively. (For more on Policy Governance see www.governancecoach.com.) If you remain skeptical of the effectiveness of Policy Governance in a business setting, consider the success of Weaver Street Market (annual revenue $14 million) Deep Roots Market (annual revenue $4 million), and Company Shops Market (annual revenue $5 million), all of which utilize Policy Governance structures and practices. Authentic Democracy and Community Control Broad membership, anchored in the immediate neighborhood and joined by allies from across the city, is the starting point for democratic functioning of the CLT. The membership in the CLT can begin rather small (say 100 people) and easily grown to 500 to 1,000 or more people. It will be important for members to have financial or time commitment requirements as an expression of their seriousness about the organization. There are various ways other CLTs have decided membership, but ultimately these requirements will be decided by this community. Any resident of North Carolina could become a member, but membership recruitment would be focused on the area immediately surrounding the shopping center, with secondary attention to the wider community of Greensboro. We propose that the CLTs board be elected entirely from its members. Every election would need to be contested, with at least two times as many candidates as there are seats. Contested elections enhance democratic functioning as more ideas, kinds of people, and experience are weighed and evaluated by the electorate. The majority of board seats would be filled by members who live within a 1-2 mile radius of the shopping center. This would ensure that the shopping center would be operated with the concerns of the immediate community most in mind. Two to three seats could be reserved for members who live outside the immediate community. These people can bring needed perspectives, expertise, and connections to complement those of the immediate community. Taking its cues from the membership meeting, the Board will need to set policy on a number of issues, starting with the question of what needs of the community are to be met by the shopping center, by whom, and at what cost. The Board will also have to set policy around uses of the community space that is in the shopping center, and guidelines for the recruitment of tenants and the setting of lease terms that sustain the CLT while encouraging appropriate community economic development. The Annual Membership Meeting would need to be conducted in a substantive, democratic way, so that members have real say about the strategic direction and questions facing the land trust. The cooperative movement can provide many examples of annual meetings with large memberships where serious matters are decided by

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

the membership. One key question that should be addressed in each annual meeting will be whether and how to spend the annual surplus. The CLTs bylaws will almost certainly restrict certain kinds of expenditures, to prohibit self-dealing and ensure maintenance of a charitable and community focus of the CLT. Throughout the year, there need to be ways for members of the CLT to affect policy and day-to-day practices, while building community among members. For example, members can serve on committees, attend sponsored social and educational events, and volunteer for community improvement efforts sponsored by the nonprofit land trust. Non-members who live in the immediate community should be invited to at least one event each quarter, designed to strengthen the CLTs connection to the immediate community and to hear about any issues or opportunities facing the community. The CLT should also conscientiously interact with other community organizations and institutions in the area, including CEEJ, Concerned Citizens, Woodmere Park Neighborhood Association, Peeler Recreation Center, and McGirt-Horton Library.

Question 3: How will the community gain the requisite capabilities to pull this off?
What capabilities are needed? We see three broad capabilities that the community will need to succeed: 1. Collective and individual skills and aptitudes related to democratic Policy Governance of a CLT that owns a substantial asset 2. A moderate level of community cohesiveness and trust, enhanced by soft skills in community engagement and community building 3. Specific knowledge and skills related to owning and operating a shopping center Where will the community get these capabilities? Keep in mind that there are different spheres and contexts in which the needed capabilities can reside: In the community as a whole (for example, a shared sense of community trust has to be held in the community at large or it isnt authentic) In individual community leaders (e.g., skill at engaging people in the community, knowledge of policy governance and how it applies to this situation, etc.) Within hired experts (e.g., real estate attorneys, CPAs, board development consultants, etc.) Our experience organizing in Northeast Greensboro on the grocery store project has taught us that theres more capability already present in the community than it is generally credited with. The RCC experience is not a fluke: after all, the same community came together in a highly effective way to stop the re-opening of the White Street Landfill. CEEJ and Concerned Citizens have proven themselves to be well-organized, purposeful, hard-working, and in it for the long-haul. So there is clearly a solid set of capabilities to work from. We are also confident that the experience of launching and operating a cooperatively owned grocery store will

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

10

prove to be a valuable training ground for both individual leaders and the larger community in the areas of democratic functioning, community engagement, finance, retail operations, etc. In fact, we see the next few years of RCC start-up and operations as essential to getting the community ready for the larger project of owning a community asset like the shopping center. Frankly, were suspicious of other proposals that have suggested giving part or all of the shopping center to the community, without any serious consideration of the communitys preparation to take on that responsibility. Without an extended, concrete opportunity for learning and practice at democratic governance of a business and in the absence of an organization with a mechanism in place to carry this out, we dont see how the community will be able to identify its most important goals in owning the center, elect an accountable Board, and secure and supervise appropriate qualified management. In our opinion, community ownership is not an immediate workable option. We think that it is very workable four to ten years from now. Thats partly a function of the time needed to raise the equity stake, but its also based on a realistic assessment of community capacity at the present time and the amount of community effort that will be needed to launch the grocery store. We, the RCC, and the community have our hands full with the start-up of the grocery store. In a few years, well be able to turn our attention to the next goal: ownership of the Renaissance Center. Its important to allow time for each of these projects to emerge, grow, and become sustainable. In both projects, F4DC is willing to commit significant staff time and some financial resource to supporting ongoing individual and community capacity building. Through our relationships with national and regional non-profits and cooperative development agencies, we can provide workshops, consultants, and trainers who can help prepare the community and its chosen leaders in the various tasks and roles required. We believe that other foundations in the region would also like to participate in these kinds of capacity-building efforts. So the community and its leaders will have ample support to grow the capacities they need to succeed.

Fund for Democratic Communities f4dc.org ~ twitter.com/f4dc

11

Pathways to Community Ownership - Net Operating Income

Annual Income from Rents Family Dollar RCC 19,000 remaining square feet Annual max income Revenue lost to vacancy Gross income from rents Annual Expenses Management Insurance Maintenance Utilities Taxes Reserves Total expenses Net Operating Income before Debt Service $39,680.00 $24,000.00 $140,600.00 $204,280.00 -$32,560.00 $171,720.00

$8,586.00 $7,920.00 $39,600.00 $8,800.00 $0.00 $15,400.00 $80,306.00 $91,414.00

If community owns as a non-profit land trust, then no taxes due. Otherwise $26,184

Assumptions Sq footage of grocery store/comm'y space Grocery store rent per yr Family Dollar sq footage Family Dollar rent per yr Total sq footage of center Remaining sq footage Annual sq ft rental price Vacancy rate management costs Insurance per sq ft Maintenance per sq ft Utilities per sq ft Reserve per sq ft Fund for Democratic Communities

15,000 $24,000.00 10,000 $40,000.00 44,000 19,000 $7.40 10% 5% $0.18 $0.90 $0.20 $0.35

see assumptions used by New bessemer Associates in 5/20 submission likely given long-term leases signed by Family Dollar and RCC see assumptions used in Michael Watts 4/23 report to City see assumptions used in Michael Watts 4/23 report to City see assumptions used in Michael Watts 4/23 report to City see assumptions used in Michael Watts 4/23 report to City see assumptions used in Michael Watts 4/23 report to City f4dc.org

Pathways to Community Ownership - 3 scenarios

Purchase Price of Shopping center Years to save down payment Year of purchase Years to pay off (Term) Year paid off Last year City is owed money Initial Equity Stake Amount of down payment from RCC Amount of down payment - other sources Amount of Financing Needed Financing from Self Help @ 4% Financing from City @ 0% Annual NOI before debt service Annual Debt Service Years 1-15 Years 16-20 Years 21-40 Annual NOI after debt service Years 1-15 Years 16-20 Years 21-40 Accumulated Cash relative to purchase date Year 5 Year 10 Year 20 Year 40 Accumulated cash by year 2023 2028 2038 2058 Scenario 1 $1,900,000 5 2018 40 2058 2058 $400,000 $250,000 $150,000 $1,500,000 $800,000 $700,000 $91,414 Scenario 2 $1,900,000 10 2023 15 2038 2038 $950,000 $800,000 $150,000 $950,000 $500,000 $450,000 $91,414 Scenario 3 $1,900,000 10 2023 20 2043 N/A $950,000 $800,000 $150,000 $950,000 $950,000 $0 $91,414

$58,174 $58,174 $35,000

$74,381 $0 $0

$69,082 $69,082 $0

$33,240 $33,240 $56,414

$17,033 $91,414 $91,414

$22,332 $22,332 $91,414

$166,200 $332,399 $664,798 $1,793,078

$85,164 $170,327 $712,561 $2,997,911

$111,661 $223,323 $446,646 $2,274,926

$166,200 $332,399 $664,798 $1,793,078

$0 $85,164 $255,491 $2,540,841

$0 $111,661 $334,984 $1,817,856

Fund for Democratic Communities

f4dc.org