Thursday, March 30, 2017
Cathedral Campus Redevelopment Project Update
How do the two LLCs support the ministries of the Cathedral? Nutmeg and Olive LLC continues to transfer the net rental income from the Park Chateau apartment complex to the Cathedral’s operating budget. In addition, Nutmeg & Olive annually transfers 5% of the LLC funds that are invested with the Episcopal Church Foundation to the Cathedral. This 5% transfer of invested funds mirrors the draw the Cathedral makes on its enduring and reserve funds, also invested via ECF. In 2016, these transfers of rental and interest income from Nutmeg & Olive in support of Cathedral operations totaled $157,000.
How did Nutmeg & Olive LLC support the Great Hall Restroom Project?
In addition to the transfer of $157,000 in rents and investment income to St. Paul’s, Nutmeg & Olive also transferred $318,800 to the Cathedral in 2016 for the Great Hall Restroom Project. It is unlikely that the Cathedral would have been able to complete this project without impinging on operational expenses or launching a campaign had it not been for the LLC’s support.
Why did we do the Great Hall Restroom Project, and why did it cost so much?
The convergence of several factors led both Nutmeg & Olive and the Chapter to the conclusion that 2016 was the right time for remodeling the basement restrooms and for adding two new accessible, unisex facilities on the main floor of the Great Hall. First, there was a concern about our preparedness for the loss of four restrooms in the Administration building at the point it is demolished for construction of the Olive parcel project. Second, once the Administration building is gone, we would not have any handicapped-accessible restrooms at the Cathedral. And finally, we had received negative comments from a number of couples who were considering the Cathedral for their weddings, or other special events, about the outdated and inadequate facilities in the basement, especially the restrooms.
Several people have asked about the cost of this project, and this is a fair question. This was not a simple “home bathroom renovation” type of project. In addition to the complete renovation of the two basement restrooms, the project involved construction of two new unisex, fully accessible restrooms in a location that had not been considered for this purpose by the original architects of the Great Hall. Major demolition and structural work needed to be done; a new floor, as well as plumbing and electrical service, needed to be created. Given the age of the structure no one was surprised when we found we would need to do asbestos abatement. Two competitive bids were received, and based on these bids, a budget of $300,000 for the project was adopted by Nutmeg & Olive. The final cost overrun was 6%, and occurred in part because of an upgrade to the quality of tile used and several additions to the project scope. In addition, architectural fees were slightly underestimated.
Here are photos of the demolition of the old basement-level women’s room, side by side with a partial view of one of the completed restrooms
Why did the Fifth & Laurel LLC sell its remaining condominium?
Mindful of the Vision for Mission report, the Chapter adopted a 2016 operating budget to increase the Cathedral’s investment in clergy and lay staff support for our vital ministries. Living into God’s abundance required a “leap of faith” on Chapter’s part to budget beyond the 2016 expectation for pledge, plate and investment income. $125,000 of Chapter reserves were drawn to balance the 2016 budget, with the anticipation that additional draws would be necessary for two more years.
In mid-2016, Cathedral treasurer Betsey Monsell approached Fifth & Laurel about selling the remaining LLC-held condo at Laurel Bay. This property was bequeathed to us with the understanding that it was to be used in support of the Cathedral’s operating budget. Due to its low yield, operating the condo as a rental property was not a good investment strategy for the LLC. Following discussion, the LLC agreed to the Cathedral’s request, and the condo was sold in Fall 2016. Approximately $370K was distributed to the Cathedral in early 2017 from this sale. The distribution of these proceeds from the LLC makes it possible for the Cathedral to preserve the Chapter reserve funds that might have been required during the remaining two years of the planned budget shortfall.
Where does the development of the Olive Street parcel stand?
The process of developing this parcel, which will include new office, program space, and parking for the Cathedral, is complex, with various contractual thresholds and benchmarks. There have been delays and extensions to the originally negotiated timeline; the purchase and sale agreement has been amended five times. The LLC, with outstanding guidance and support from our consultant, Tom Delaney, has been able to increase our benefit from the sale agreement while simultaneously granting developer Greystar the timeline extensions it needs. Due to Greystar’s evolving design for the structure and the requisite amendments to the entitlements that Greystar must obtain from the City, it is unlikely that demolition/construction will begin before mid-2018, and possibly later, and will take about two years from start to completion.
When will the St. Paul’s community be able to see design concepts for the project?
It is safe to say that the structure to be built on the Olive parcel will look different from the artist’s conception of the project which congregants saw when we supported the entitlement process at Uptown Planners and the City Council. The LLC, along with representatives of Chapter, have reviewed revised drawings of the project, and holds a contractual right of approval over general design elements. But the design continues to be fluid as Greystar explores ways to increase the square footage of the structure. Architectural drawings will be shared with the community when there is a more definitive version available, hopefully within the next few months.
The Cathedral Campus Redevelopment Project we are now seeing take shape is the culmination of years of planning and thoughtful work. The two newer LLC managers, Dean Penny Bridges and I, are fortunate that three original managers of the LLC, Jack Lentz, Kendall Squires and Ken Tranbarger, continue their work today, almost 13 years after the formation of Nutmeg & Olive LLC. These three lions of our community have collectively devoted about 40 years of service to this project, which will benefit St. Paul’s Cathedral for generations.
LLC Manager and Dean’s Warden