I can't make the meeting tonight; however, in an effort to be productive,
let me attempt to offer some skeletal suggestions regarding a business
plan.
Assume, for these examples, a simple art gallery model (simpler than a
multi-use facility).
Business model #1 - pure capitalist
enterprise.
Jane Jones owns a lease on space. She turns it into an art gallery. She
obtains financing through loans or investors, or her own capital reserves and
buys art work from artists who are paid at the time of their sale. She exhibits
the art work in her gallery. She sells it for a profit accruing only to her
gallery.
Business model #2 - second pure capitalist
enterprise
Jane Jones owns a lease on space. She turns it into an art gallery. Artists
send her art work on consignment for an agree-upon period of time. She exhibits
it in her gallery. She sells it and takes a share of the proceeds or commission,
the rest going to the artist only after she sells the artwork. If the art work
doesn't sell, the artist takes the art work back. (There may or may not be
something owed to the gallery owner for the time exhibited.)
Business model #3 - third pure capitalist
enterprise
Jane Jones owns a lease on space. She turns it into an art gallery. Artists
rent exhibit space from her for a period of time to show their work. When the
work is sold, she may get an additional commission. When the rental period is
over, if the art work is not sold, the artist takes the art work back.
Business model #4 - hybrid capitalist/not-for-profit
enterprise
Jane Jones owns a lease on space. She turns it into an art gallery. She
wishes to be a patron of arts so she donates a sublease (with a
set monetary value) to a not-for-profit association or consortium of artists.
She, the patron, takes an annual tax deduction for the value of the
donated sublease (to the extent allowed by the Internal Revenue Code). The
not-for-profit association holds gallery exhibits open to the public at which
the works of art shown by the association's members can also be purchased. The
artists profit from the sale of their art work or, if it isn't sold, take the
art work back at the end of the exhibit. The association may have membership
dues or may charge the members a nominal fee for exhibiting to cover such things
as hanging costs, cleaning, sanitation, electricity...
Modifications of these models can be developed for cafe use, performance
space, subleasing office space to not-for-profits (or perhaps private business
people who need small offices), or a multi-use space. I personally don't see a
way to run a not-for-profit coffee shop (absent church sponsorship), but perhaps
someone else can come up with a model that works.
For all of these models, or any other model for that matter, the market has
to be closely examined to see if sufficient revenue can be generated to
cover all of costs associated. The questions have to be asked:
Is there a market in this community for a small art gallery, sufficient to
generate revenue to cover its costs?
Is there a market in this community for another cafe, sufficient to
generate revenue to cover its costs?
Is there a market in this community for another performance space,
sufficient to generate revenue to cover its costs?
Is there a market in this community for small shared office space,
sufficient to generate revenue to cover its costs?
Is there a market in this community for some sort of multi-use facility,
sufficient to generate revenue to cover its costs?
If the revenue can't cover costs, as we have seen before, the enterprise
cannot survive. The point of having a hybrid capitalist/not-for-profit is that
the patron doesn't need the revenue and is happy with the tax deduction for
paying the rent and the not-for-profit operates without the expense of a
lease, which, in the case of 1022 Cortelyou is just under $3000 per month... in
round numbers, $36,000 per year, more if elsewhere at a higher-priced
location.
I have seen suggestions in these e-mails that, for any assignment of the
existing lease on 1022 Cortelyou to a new organization, there would have to be a
private guarantor of that lease. That strikes me as a no-win
situation for the proposed guarantor. It's not at all like a parent
guaranteeing a lease for their child with whom there is a presumably strong
familial connection. It might be better searching for a "patron of the arts"
type to take on the assignment of the lease [with a sublease to a
not-for-profit] who could at least benefit from donating space to a
not-for-profit arts center.
Bob Gochfeld