A proposed compromise over the sale of the Northwest Neighborhood Cultural Center building has collapsed, reopening a rift on the nonprofit board that owns the historic structure at 1819 NW Everett St.
Board member Gordy Allen, whose plan for transferring the property to its long-term tenant, the Northwest Children’s Theater, was favorably received by the theater’s managing director last July, recently issued a statement indicating a division exists on the board. The conflict surrounds the sale price of $100 and terms to complete seismic upgrades, estimated to cost $6 million.
Here is the full text of Mr. Allen’s letter:
I have been on this board since February 2017. I have come to the unhappy conclusion that the board does not intend to tell the whole truth about the facts and motivation for recommending this deal.
Under the NWNCC bylaws, article 6.4, the board “shall take no action to dispose of the building . . . without the approval of two-thirds of the members present at a special meeting called for the sole purpose of considering such disposal.” The proposed contract of sale will include promises that the Children’s Theater will raise a certain sum of money within six years and do certain seismic work within nine years, but present and future boards will have full authority to waive these requirements. If they do, the building is gone, and the membership’s right to require preservation through seismic improvements terminated.
Having listened to the present board, it is clear to me that conveying the building to the Children’s Theater is more important to a majority of the board than ensuring that the building is preserved through seismic upgrades and other improvements. I believe the present board would waive any requirements standing in the way of a conveyance to the Children’s Theater, and there is a high risk that a future board would do the same. If so, the Children’s Theater will own the building “free and clear” without doing the upgrades necessary to preserve it. The Children’s Theater, not the neighborhoods, will then receive the likely bonanza at the end of the building’s life, as described below.
The majority of the board argues that the building has only nominal value because of the very high cost ($6 million plus) for seismic upgrades to enable children to exit safely during a seismic event. If one assumes that this building is the only possible future use for the real estate, then that would be true. But the building obviously sits on very valuable land where it is available for other uses. Proponents of a deal for selling the building for $100 argue that historic landmark designation and other government controls prevent sale for any other use. They argue that the underlying real estate value is, therefore, illusory.
It is not. While the city presently tolerates use of unreinforced masonry buildings for activities like the Children’s Theater, at some point changes in the law, stricter enforcement of the law and community sentiment will make the current use illegal and/or unconscionable unless major seismic improvements are made.
If the funds have not been raised and the seismic work not done, the building will then be vacated and become a blight, accessible to squatters, etc. The present restrictions to demolition will go away, and the value of the real estate will probably be eye-popping. If the NWNCC still owns the building at that time, funds from sale of the land can then be invested, possibly in the Oregon Community Foundation, and a very substantial annual income generated for use in the neighborhoods that own the NWNCC.
My hope is that the building will be seismically upgraded and still in use 100 years from now. I do not object to the $100 price if the seismic upgrades are guaranteed and then done by the Children’s Theater. It would be ideal if the Children’s Theater can raise the funds and do the upgrades. I support the idea of giving the Children’s Theater an exclusive option for a reasonable time to acquire the building by doing the work. If the Children’s Theater does not do that work within a reasonable time, then the building has to come back to its present owners, the neighborhoods.
The possibility that the Children’s Theater might fail to do the seismic work, go to the city for permission to demolish the building and then sell the land for many millions of dollars is unacceptable. This very outcome—title transfer with no reasonable assurance of performance—- is allowed by the proposed sale.
The answer here is simple. The membership should reject the board’s proposed sale to the Children’s Theater for a nominal consideration UNLESS the membership is guaranteed that (1) the building comes back to the NWNCC if the work is not done as required within a reasonable time, and (2) no future board has the authority to waive the requirements of the deal without a further vote by the membership.
The next NWNCC board meeting will be held on Jan. 8 at 6:15 p.m., at 1819 NW Everett St. An annual membership meeting will likely take place in February as required by NWNCC’s bylaws. New directors will be elected at the annual membership meeting. Anyone interested should attend the board meetings and make their views heard before the date of the as yet unscheduled special meeting to approve the proposed sale to the Children’s Theater.
Northwest Neighborhood Cultural Center