Issue:  Vol. 44 / No. 38 / 18 September 2014
 
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LGBT center seeks
$157K loan from city

NEWS


s.hemmelgarn@ebar.com

Rebecca Rolfe. Photo: Jane Philomen Cleland
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Openly gay Supervisors Bevan Dufty and David Campos are co-sponsoring a resolution that would allow a $157,500 loan for the San Francisco LGBT Community Center.

The center is working with First Republic Bank to modify the terms of its loan related to the outstanding costs from the construction of the center's building years ago.

As part of the loan agreement, the center needs to keep $157,500 in an account with First Republic. The resolution to authorize the loan and make the appropriation was introduced Tuesday, February 2.

Dufty said the center's loan with the bank has been "a difficult burden." He said the bank "felt the city needed to provide some guarantees in order to improve the terms of the loan and extend the life of the loan."

Rebecca Rolfe, the center's executive director, said the loan is not a sign that the center is in financial trouble, but it is looking to cut costs.

"We, like other people, are working with our financial institutions to come up with modified terms to reflect the lower interest rates that are available," said Rolfe.

"This is not a crisis," she said. "This is a situation that we've been looking at multiple solutions to over a long period of time that include fundraising, revenue, and reduction of expenses, so this is just one part of a multi-prong approach."

The original loan amount was $3.2 million, according to Rolfe. Of that amount, $3,150,000 remains to be paid. The loan, which was put into place in 2009, consolidated all the center's construction-related debt. The center opened its doors in March 2002.

When the center opened it had a staff of 20 and a nearly $3 million annual budget, But the center struggled to stay solvent and lost $642,000 between July 2002 and February 2003.

The center's budget for 2009-10 is $1.85 million. The budget is balanced this year, said Rolfe.

She said prior to the modification, the center's payments were $19,883 a month, including interest and amortized principle. Dufty said the center is going to save about $60,000 over two years in loan costs.

Before the modification, the center had been making interest and principal payments. Once the loan modification becomes final, the center will make interest-only payments for two years. After that, the center will be making interest and principal payments again, according to Rolfe.

The loan from the city will be repaid starting in 2015, and that has to be paid back by 2020.

The payments on the city loan will be made directly to the city. The city's interest will be approximately 1 percent per year.

Rolfe said the center is making payments directly to the bank for the outstanding loan. The bank loan and the city loan are two separate loans.

James Williamson, co-chair of the center's board, said, "The center, like every nonprofit, is facing tough times, and like every nonprofit we have been looking for ways to reduce our expenses. The only expense we hadn't figured out a way to reduce was the interest from the loan," because it's a fixed amount.

A First Republic spokesman would only say, "We are working cooperatively to finalize a positive resolution for all parties."

Center looking at costs

Last year, the center's budget was $2.1 million. Rolfe said part of the reduced budget is that staff count is down 15 percent from a year ago. There are currently 22 staff members.

Rolfe said nobody has been laid off since its director of administration and finance was let go just over a year ago.

However, she said, "As staff turnover has happened, we have consolidated staff positions."

She also said, though, that in order to expand the development team and increase fundraising capacity the center is bringing in a new staff person. That person hadn't been hired as of Tuesday, February 2.

Rolfe said the center has seen a decrease in short-term rentals for events and meetings, but it has had no vacancy in terms of long-term tenants. She said a couple offices are vacant but the center is "looking at making some significant change ... We're evaluating how we use the building." The center is holding the space available, pending a final decision.

"Basically, we're looking for opportunities to maximize revenue," said Rolfe.

She also said, "We've looked at a variety of different cost-saving measures, pretty much across the board."

This has been done "while preserving the core services and programs of the center, with a particular focus on safety net services," such as programs involving youth and economic development, said Rolfe.

Asked if she sees more cuts coming up, she said, "I sure hope not."

Dufty said the proposal would probably be assigned to the budget and finance committee and he hopes it will be calendared in two to three weeks.






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