Parasol’s building proposal gets no quick answer
The nonprofit Parasol Foundation may have to wait a while before they find out if they’re off the hook for the financial responsibility of their building.
The Incline Village General Improvement District Board of Trustees tabled discussion June 12 on a controversial proposal that would move IVGID out of its old building and into the Donald W. Reynolds Community Nonprofit Center. Currently, the district owns the land that the building is on, but the Parasol Foundation owns and maintains the center.
“There seems to be this false narrative here that taking the property back is one of the options. That isn’t what we have here,” said District General Manager Steve Pinkerton during the meeting. “What we have here is an offer from the Parasol that as an alternative to their current way of business they would like to change their business model. They are not requiring that they change their business model.”
A district memo from the meeting shows the foundation is seeking $5.5 million in the deal, and would like to retain space in the building for its own operations.
According to the foundation’s website, Parasol partners with charitable donors to make their contributions more meaningful.
Pinkerton said the proposal before the board would allow the district to take over the building now, rather than in approximately 80 years like the original lease had intended.
“This is not a proceeding where there is a default, this is simply a situation where they would like to change the terms of the lease in what they see as a win-win, wherein they are proposing that we take over the improvements now and not some 80 years from now, and that they would then like to tap the assets they have in the building for the purposes of running a foundation,” he said.
Tax documents for the Parasol Foundation show the nonprofit’s 2014 total functional expenses of $5,245,546 exceeded their net income of $3,615,819. In 2013, their $8,114,806 in expenses exceeded their income for $5,054,147.
The foundation’s net income in 2012 was $955,625 compared with $4,077,131 in expenses. In 2011, their net income was $969,378 and expenses totaled $3,632,503.
Continuing his address to the board, Pinkerton said, “So what they’ve proposed is, ‘We would like to get out of the property management business, we would like to tap the assets we have in the building, we have a building that right now you do not have the right to occupy under our lease and options for another 80-plus years. What we’re proposing is modifying the lease where you take over the improvements in the building sooner and get a benefit from those, and here’s the price that we would do that for.”
He said that under no circumstances is the proposal a discussion about the district declaring a default on the lease.
“We keep hearing this in the community over and over again, and that’s not one of the options on the table,” he said. “The board has the option of either looking at an agreement where we take over the property sooner and pay Parasol some consideration for the building, or we just continue with the lease as-is.”
As part of the “lease modification,” the foundation, which currently supports other local nonprofits by providing them workspace in the building, would no longer do that. District documents state that the foundation would continue to provide financial support to the nonprofits instead of working space.
The district has long considered relocating its administrative facility because the current structure is outdated, but questions remain as to whether the foundation’s $5.5 million proposal is the most financially sensible option.
Trustee Philip Horan said despite concerns in the community whether the district has the authority to modify the lease, legal counsel has assured the board that they can.
“From here forward, I’m committed to keeping this as an item on our agenda to continue the conversation at every board meeting,” said Trustee Kendra Wong. “When the time comes to make a decision, whenever that may be, this will likely be an item that’s a special meeting that will be the only thing that we discuss.”
Wong said later in the meeting that she expects this to be a very lengthy process.
Pinkerton stated that once the final decision meeting is scheduled, he would work with staff to make sure that is clear on the agenda.
District documents regarding the Parasol Foundation lease modification proposal can be viewed at yourtahoeplace.com/ivgid/resources/ptcf-modification-request. You can review documents and watch the June 12 meeting at yourtahoeplace.com/ivgid/board-of-trustees/meetings-and-agendas.
Amanda Rhoades is a news, environment and business reporter for the Sierra Sun. She can be reached at email@example.com or 530-550-2653. Follow her on Twitter, Facebook and Instagram @akrhoades.