Tuesday, July 14, 2015

The Cathedral Campus Redevelopment Plan: Questions and Answers (5)

This blog, by the LLC manager Mark Lester, is the fifth in a series of Questions and Answers about the Campus Redevelopment plan.  See all entries here.

Q: What can you tell us about other recent LLC activities, including sale of the Nutmeg Parcel and the Laurel Bay condo?

A: Thank you for the insightful and sometimes challenging questions over the past several weeks. In chatting with members of the St. Paul’s community about the Olive St. Parcel phase of the Cathedral Campus Redevelopment Plan, we realized that there were also some unanswered questions about other recent activities of the LLCs. This blog post will address two areas where there has been recent activity: sale of the Nutmeg Street Parcel, and sale of one of the condos held by Fifth and Laurel LLC.

The sale of the Nutmeg Street Parcel, sometimes known as the “cooking school site,” concluded in February 2014. At one time, there was to have been office space for the Episcopal Diocese of San Diego in the structure built here. However, after the Diocese announced plans to redevelop the Holy Trinity campus in Ocean Beach as the Episcopal Church Center, the LLC planned for development of a structure that would not include any Cathedral owned space. As the real estate market began to rebound after the recession of 2008, the LLC sought proposals for the Nutmeg Parcel. Following due diligence to ensure that the design and use of the structure built on the site would be compatible with Cathedral activities, we concluded an agreement with ColRich, Inc., which is now building “Vue on 5th.” Here is a link to their web page on the project: http://colrich.com/communities/vue-on-5th/. So, in answer to a frequent question, neither the LLC nor SPC has a continuing financial interest in the edifice across Nutmeg St. that currently grows every week. The developers have agreed to CC&Rs that protect the Cathedral’s freedom to sing, hold parades, ring bells, etc., and future owners of condos in the building will also be required to assent to those CC&Rs.

The proceeds from the sale of this parcel enabled the LLC to eliminate all debt that had been incurred for the Site Development Permits we obtained for the Nutmeg and Olive parcels. This was great news for both the LLC and the Chapter. The net balance of the proceeds, around $2 million, are currently either invested along with the Cathedral’s enduring funds through the Episcopal Church Foundation (ECF), or are held in certificates of deposit, by Nutmeg and Olive LLC, in trust for the Cathedral. Annual distributions from the interest on the invested funds are being made by the LLC to the Cathedral’s operating fund. Also, due to the increase in overall SPC-related deposits with them, ECF reduced the management fee percentage on all Cathedral-related ECF investments.

Many of you know that the “second” LLC, Fifth and Laurel LLC, owned two condos on behalf of the Cathedral in the Laurel Bay complex. These condos were given to the Cathedral by a parishioner in 2006, in an act of characteristic generosity. Her intention was that they support the Cathedral’s operating budget. Net proceeds from the rents of these units have been distributed by the LLC to the Cathedral. Earlier this year, the Cathedral Finance Committee, via the Chapter, asked the LLC to liquidate one of the condos and distribute the proceeds to SPC. A one bedroom/one bath unit on the first floor of Laurel Bay closed escrow last month for $350,000. The net proceeds from this sale were distributed to the Cathedral, which invested most of the funds along with our enduring funds through ECF, while retaining $100,000 as the basis of an ongoing budget operating reserve. Fifth and Laurel LLC still holds one unit at Laurel Bay and will continue to make distributions from the rents as appropriate; this condo, on the fourth floor, may still appreciate somewhat in the current real estate market, and there is no reason to sell it at this time.

If these comments have prompted new questions, or if you have other questions about the Cathedral Campus Redevelopment Plan, please contact me at mlestersd@sbcglobal.net or Dean’s Warden Don Pellioni at djpellioni@cox.net.


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