Strategic Planning Update for NECC Members & Our Neighbors – October 18, 2017

Overview

The NECC Board has kicked off a process to explore opportunities and options to meet current and future needs of our expanding membership and the larger community.

Options may include a new building on the NECC’s parking lot, across the street from the current NECC facility. We’re also looking at the possibility of joining with one or more adjacent property owners to develop a larger multi-use building. At this point, we’re just gathering info to understand what’s possible; no decisions have been made.

Here is where we’re at in this process. Stay tuned for periodic updates!

No matter what…

The NECC Board is committed to retaining the warm, welcoming, and cohesive atmosphere that sets the NECC apart from other fitness and wellness centers. The Board is also committed to maintaining the NECC in a cost-efficient, family-friendly facility that serves members as well as the larger community. And finally, the Board is committed to providing opportunities for member and user input at key points in the process.

Why are we exploring options now?

• The NECC facility was built in 1925 and is nearing the end of its expected life.
• Demand for classes, lessons, and activities exceeds facility capacity.
• Our pool systems are in danger of failure (despite repairs just completed that will temporarily extend its life, improve safety, and reduce ongoing maintenance burdens).
• Our facility is not accessible to those with mobility challenges.
• Our original facility faces significant and costly deferred maintenance projects, relies on outdated and inefficient energy systems, and needs costly structural upgrades to address earthquake risk.
• As a non-profit organization with a charitable mission, the NECC serves the larger community in many ways. Demand for NECC space from other community-serving organizations greatly exceeds our capacity, and we regularly turn down requests that we’d love to accommodate.

What’s being considered?

Options could include a new multi-story mixed-use building on the NECC’s parking lot that includes a new, ADA-accessible pool; parking; and multi-use fitness and activity spaces to serve the NECC community. These NECC functions could be co-located with other uses, such as housing and/or retail, that would be owned and managed by others.

At this preliminary phase, we’re also exploring whether it makes sense for us to partner with one or more adjoining property owners in a joint venture. This could provide an opportunity to for us to configure our various needs (new pool, parking, multi-use spaces, etc.) with more flexibility than if we were to build on our parking lot alone.

Beyond our strong sense of community and loyal membership, the NECC has a valuable asset: our parking lot. However, we lack the capital to do a project like this alone. Therefore, we would need to find a suitable partner with development capital and expertise if we choose to proceed with any type of project.

In this exploratory phase, we intend to gather information and understand the practicality, feasibility, and tradeoffs associated with various options. If a plan for a new development for NECC were to emerge out of this process, nothing would be expected to be built for at least 4-5 years.

Who is involved in this exploratory phase?

The NECC Board is providing overall guidance to the Strategic Planning Committee, one of several board committees. This committee is responsible for doing the leg work needed to explore various paths forward. NECC’s executive director and other NECC staff are providing information to this committee about facility operational and programming needs, but they are not leading the process.

What’s our first step?

In mid-September 2017, the Strategic Planning Committee sent a “Request for Interest” (RFI) to approximately 25 local developers who have experience in planning, design, financing, permitting, construction, and leading of mixed use developments. The purpose of the RFI is to seek an experienced partner to help us understand options, implications, costs, and tradeoffs of various scenarios that are consistent with NECC’s mission, values, financial capacity, and objectives. We have asked for responses by the end of November.

What are some of the trade-offs we’ll need to consider?

• Will we need to expand enrollment if we expand our space? At what point do we become bigger that we want to be?
• How much parking do we need to provide? We will need to evaluate the demand (particularly for older adults and families with young children) against the high cost of providing parking within a multi-story structure.
• What are the operational challenges of operating in two buildings, if we retain uses in our current facility and add new space across the street?
• If we partner with one or more adjacent property owners, how much control over the project can we retain?

Notes from Q&A sessions on October 11 and 17, 2017

Q: Have we surveyed NECC users to determine how usage may change over the next 5-10 years? Have we considered the demographics of the greater neighborhood to anticipate how the NECC can best meet changing needs over time?
A: We have graphed our usage over the years, both of our membership and our paid programs (swimming, basketball, ballet, etc.). We also track usage of the NECC by community groups (Art from the Heart, Special Olympics, and many others). Our membership is trending older over time, but we’ve experienced huge growth in young families for paid programs. We can track neighborhood demographics to help us plan. Multi-use spaces can be designed to be flexible so that we can adapt as programming needs change over time.

Q: Have we considered closing off the street that separates the NECC from the parking lot? How about a sky bridge spanning the street?
A: Yes, the feasibility of these will be evaluated. It’s unlikely that we could close off the street entirely to vehicle traffic, but we may be able to pave the street differently to function more like a pedestrian walkway, to decrease vehicle speed and improve pedestrian safety.

Q: With all the new mixed use (i.e., housing plus office and/or retail) development in the vicinity, is there a demand for more?
A: Yes, the demand is definitely there.

Q: If a new building is being constructed, is there a plan for the transition period when the current facility and/or parking lot are out of commission? What can we do to avoid a loss of member and fee-based revenue during this period?
A: This will definitely need to be factored into any plan.

Q: Could the Starbucks property be included in a development scheme?
A: Possibly. A few board members have initiated a conversation with the property owner. They could maintain their ground floor retail in a multi-story new building.

Q: Have we considered a land swap with the Poor Richards/Bank of America site?
A: Definitely worth exploring! It’s a very central site in Hollywood, and offers the potential to partner with the Hollywood Senior Center.

Q: Can the NECC purchase air space above a property that doesn’t want to redevelop?
A: Potentially yes. Worth looking into.

Q: Does the current NECC building have historic landmark status?
A: No.

Q: How would we pay for a new building?
A: We couldn’t do this alone. We would need a partner who has the capital to build a building, in exchange for equity (an ownership stake). What the NECC brings to the deal is the value of the land; a partner brings capital and development expertise to the deal — and takes the bigger risk. The arrangement would need to be carefully negotiated to make sure that the NECC gets what we need from the deal. We would not enter into such an arrangement without caution, due diligence, and independent legal guidance.

Q: Is crowdfunding an option?
A: This could help raise some money, but we would still need a development partner to do anything significant.

Dear NECC Members,

Happy Fall! I am pleased let you know that the NECC is thriving. We are on sound financialfooting, while honoring our pledge to increase wages for our employees and maintain our unique facility. We expect no dues increase for 2018 but will be pursuing a broader-based fundraising effort to ensure that our organization remains vibrant and financially stable.

I also want to fill you in on the strategic planning that your NECC Board is doing. Here is a quick overview, followed by information about how you can learn more.

What is your Board thinking about our future?

The NECC Board is examining all options for how to continue being a vital force in our community. In any option, the Board is committed to retaining the warm, welcoming, and cohesive atmosphere that sets the NECC apart from other fitness and wellness centers. The Board is also committed to maintaining the NECC in a cost-efficient, family-friendly facility that serves members as well as the larger community.

The Board is seeking professional guidance to help us understand opportunities, challenges, costs and tradeoffs of various possible options, including the option of facility expansion or new construction. Our major assets are our committed membership (1300 strong!), our broad-based community support, and our current facility and parking lot. This is an exploratory phase only. We are gathering information to understand the practicality, feasibility, and tradeoffs associated with various options. No decisions have been made!

Why explore options now?

Our facility faces significant and costly deferred maintenance projects, relies on outdatedand inefficient energy systems, and needs costly structural upgrades to address earthquake risk. Built in 1925, it is nearing the end of its expected life. As you have likely experienced first-hand, the demand for classes, lessons and activities may exceed facility capacity. Most acutely, our pool systems are in danger of failure (despite the repairs we just concluded that will temporarily extend its life, improve safety, and reduce ongoing maintenance burdens). Finally, our facility is not accessible to those with mobility challenges.

Who is driving this process?

The NECC Board is providing overall guidance to the NECC Strategic Planning Committee, comprised of Dustin Klinger, Deborah Stein, Tony Cockcroft, Howard Cutler, Robyn Rains, Richard Barasch, and Linda Rasmussen. This Board Committee is responsible for doing the leg work needed to explore various paths forward. NECC’s Executive Director and staff are providing information to this committee about facility operational and programming needs.

How can I learn more?

• Attend a Q&A session on Wednesday, October 11 at 10:30am or Tuesday, October 17 at 6:15pm; both sessions will be held upstairs in the multi-purpose rooms.
• Email strategicplan@necommunitycenter.org with your questions.
• Stop and chat with any of your NECC Board members if you see us at the center. A list of members and our photos are posted in the entry!
• Check our website at https://www.necommunitycenter.org/ for periodic updates.
• Leave a note at the front desk with your question and contact information, and a board member will happily get back to you.

The Board and I are committed to keeping you informed throughout this exploratory process. We will ask for your input along the way. Stay tuned!

Sincerely,

Bill Farver
NECC Board President