R2PCollectedComments2018-mm-dd.opml

New Items, here for convenience. They will eventually be moved to their proper location further down.
  2018-08-21 email From: Jim Subject: Agenda

    Running to Places
    August 21, 2018
    5:30 PM Just Be Cause Center

    AGENDA

      Attendance:
      James Drew, President
      Lilly Westbrook, Vice President
      Deborah Drew. Secretary
      Dick Furnas, Treasurer
      Heidi Goldstein
      Katie Torello
      Joey Steinhagen
      Guests:

      Review of previous minutes
      Corrections:
      Motion to approve:
      Second:
      Vote:

      Executive Director report:
      School of Rock
      Season wrap up

      Mall Lease:
        Ad Hoc committee report:
          Legal Counsel report:
        Donation report:
        Construction Drawings report:
          Architects Drew status: (preliminary plans review and approval of layout)
          Engineers status:
        Insurance for Mall lease:
        Background checks for workers:
          Paid:
          Volunteer:
        Schedule for 2018/19 production
          Contingency plans
  2018-08-21 email From: Jim Subject: Re: Notes from the search for Council [was: Re: Last night's meeting]
    The second floor plan should also be included in the lease documents.
  2018-08-20 email From: Emily Rockett Subject: Re: Notes from the search for Council [was: Re: Last night's meeting]
    A. Is addressed (sorry – forgot to add to the list) – I took out “in 100% of the Premises, on all business days.” I’m alerting the mall via a comment that you all are not the standard retail business and I think it’s up for negotiation how they and you would like to handle this. Can you suggest more specific parameters that would meet your needs?
    B. I made this more specific (see attached version). I agree that advertising revenues are not appropriate to exclude.
  2018-08-20 email From: Kati Subject: Re: Notes from the search for Council [was: Re: Last night's meeting]
    A. I don't see in your list above where you made any adjustments for the hours we are open/permitted to be in the space. I know there are 2 concerns here: 1. that as a Youth Theatre group we are not open to the public every day during normal mall operating hours and 2 that we may need to be in our space later than the normal mall operating hours (tech/strike are two examples of this). I know that most malls have requirements on hours and penalties if you don't meet these requirements so I am concerned that this is addressed properly (Deb Drew has brought this up as well during our meetings).
    B. I don't think that Direct Donations is specific enough for the exclusions from gross sales. I think that we need to be more specific than that: I believe that we need to specifically reference direct donations, grants and sponsorships. While I would love to see advertising revenues excluded as well; I don't believe that that is appropriate.
    Thank you for forwarding us your updated draft for our feedback; it is appreciated. We have a Board meeting tomorrow evening so if there are other items you believe we should add to our agenda it would be great to hear from you. Thanks again!
  2018-08-20 email From: Emily Rockett Subject: Re: Notes from the search for Council [was: Re: Last night's meeting]
    I have reviewed the lease and all of your comments thereto. I am generally in agreement with Jerry that your organization is getting a very good deal on these premises and you're not going to be able to get everything you would like as a not-for-profit entity when you enter into a commercial lease. That said, I tried to clarify a couple things in the lease revisions. Below is a summary of the changes:
    1) I corrected small details such as your name and the municipality.
    2) I expanded the termination period from 5-15 days noting that due to the nature of your organization you might need more notice to make a decision on whether you could bump the rent. I do not know if the Landlord will go for this and, frankly, I think it's something you can afford to give on.
    3) I included what I believe is an appropriate definition of gross sales - specifically excluding direct donations. This should keep your donors happy. You will, I understand, need to change the way you do your accounting in order to comply with the landlord's requirements.
    4) I expanded the permitted uses. Please make sure this list includes everything you need it to (page 2, Article 1, section I.)
    5) I changed the signage provision to say that landlord's approval shouldn't be unreasonably withheld or delayed given that signage is very important to R2P and will change with some frequency. I think your collective best bet with that regardless of whether the landlord agrees to this change is to ask for permission for new signage as far as possible before a show so you can maximize your odds of securing permission in a timely fashion.
    6. In section XIV, I attempted to cover your allowing other theater entities use of the space by calling such uses "joint productions". Let me know if that covers what you want it to cover. "Rent partners" sounds entirely too much like subletting to me.
    7. On page 22, I made an exception for recording the lease for instances where it is required by applicable law. They can't reasonably argue with that.
    Let me know how you wish to proceed. I am available should you have further questions.
  2018-08-16 email From: Dick Subject: Re: Last night's meeting
    Preamble
      Please note that I cc: our new cast member, Emily Rockett of Miller Mayer LLP whom we engaged Wednesday in the role of Council to negotiate with the Mall. Welcome Emily!
      In other news, for some communications I shall write portions of what I have to say in the third person, so I can simply copy and paste into CollectedComments should that be of interest down the road. In compiling information from emails into CollectedComments, I often edited in the vicinity of pronouns, as in we [Board Quorum] or we [R2P] or annotated a pronoun with [name]. Please bear with me [Dick] for any depersonalization or awkwardness in how it reads...
      The assorted Dropbox links Dick had put in the CollectedComments document turned out to be an unstable disaster. So...
    Dick set up a web site with a short, easy URL: mcp.cc/r2p/
      to which Dick posted various documents, including those referred to in CollectedComments, along with CollectedComments itself, for viewing or download.
      File names are intended to be self-explanatory, include the date Dick got the file and are time stamped accordingly so all the columns of the display have the best information Dick had and will sort properly.
      Whence the super short URL? This site uses web space Dick has for Microcomputer Power (mcp) which is set up as a carbon copy (cc) of Dick's main website.
    If anyone feels these documents should be behind a password, let me know and I can arrange it. I wanted to start with simple access for ease of use and comment.
    Note that I carefully provided the URL as something you must copy and paste into your browser. Why? A recognizable URL in an email passing through gmail, hotmail, or aol, for example, can easily become a priority for inspection for malicious content and then indexed for prompt availability in search engines.
  2018-08-16 email From: Dick Subject: Notes from the search for Council [was: Re: Last night's meeting]
    In anticipation of our Board Meeting Tuesday, 21 August, I [Dick] thought it might be useful to pull together some notes from my search for Council. The ad hoc workgroup got a document with notes bout individual candidates which does not seem appropriate to disseminate further. We [R2P Board] have chosen Emily Rockett and that phase is done.
    However, I [Dick] learned a lot about lawyers, leases and relevant processes which could provide valuable context and perspective with decisions we [R2P Board] shall soon be making.
    None of the lawyers was particularly enthusiastic about meeting with us as a productive use of their time and R2P resources. They liked what R2P had already pulled together and felt they already had a sense of our intent. We [R2P] are in a "get it written" phase and that means written words. Talking, not so much.
    Jerry's assessment of plausible risks and palpable benefits made it unlikely that we [R2P Board] would encounter any real deal breaker, with the possible exception of including direct donations in Gross Sales.
    Since the Word document did not come from The Mall's lawyers, it was merely a draft pulled together sloppily (as we [R2P Board] all have observed) with the expectation that Tenant's Lawyer will mark it up, clean up various details and send it back to Landlord's Lawyer
    The process of finalizing is essentially never face to face, and at this stage, prior to a signing, is done by email between the lawyers.
    The sloppiness in the document R2P got might very well be what's known in Dick's world as a "Bozo Filter". A "Bozo Filter" helps asses with whom one is working. In Dick's business Dick offers a few nice freebies which require some digging to discover. If someone inquires about one or another of them, Dick knows the potential customer is serious, and is able to research on their own.
    There was general skepticism that income to a non-profit could be considered Gross Sales. We [R2P Board] are looking to Emily to sort that out for us.
    Editing the lease to acknowledge R2P is a 501(c)3 automatically highlight a variety of areas R2P has already identified.
    Termination Clause
      I [Dick] use the expression "Match or Die" to refer to the terrifying prospect we [R2P Board] all have recognized about the Landlord's Right to Terminate the lease. "Match or Die"": "Match" highlights the fact that matching an offer is an option; "or Die" is our worst fear of what could happen if invoked by the Landlord.
      Fun fact -- The Ithaca Farmer's Market has a "Match or Die" clause with the City of Ithaca. Both parties are well aware that implementing it would be "problematic".
      A "Match or Die" clause is standard to every commercial lease.
      *Any* rental R2P might find would have it.
      Just because Landlord *can* do it that way, doesn't mean Landlord *would* do it that way -- Landlord just won't put it in a lease.
        [This *could* actually work to our advantage, since any details in the lease would be contractual.]
      *Q:* What might constitute a "Match" we [R2P] would have to make?
        *A:* Price per square foot for commercial real estate is 2-3 times what we [R2P] are paying.
    Some paranoia is healthy, but...
    We [R2P] may very well be dealing with a Landlord genuinely interested in experimenting with how to use space in the Mall. Here's the evidence:
      Rent is incredibly low per square foot
      The 5% per year compounded growth rate of the rent still only brings the rent up to about 1.5 times our initial rate at the end of the ten years.
      Landlord already has SPCA Annex as a Tenant. SPCA is also a 501(c)3
      Landlord is considering another non-profit (R2P) as a tenant -- that is already big
      R2P is learning about Commercial Real Estate, Landlord is learning about non-profits in contrast to ordinary retail.
    Just for perspective, if we [R2P] were looking to finance a purchase with a 20 year fixed rate mortgage on $420,000 at 4%, our monthly payment would be $2545.
About this document
  Dick Furnas dick@runningtoplaces.org cell: (607) 227-1870 prepared this document
  Dick used [square brackets] throughout in an effort to disambiguate and provide further commentary, while leaving original wording intact.
  This document is a working document which originated to assist R2P deliberations surrounding the Mall Lease.
  This document has been lightly edited for use by Council, but continues to include items, notably BUDGET, which R2P has identified for attention and may be useful to Council in framing clarifications and negotiations with Landlord
  The Email Trail section is presented in reverse chronological order with the notion that more recent emails probably deserve more weight
    information from emails was extracted from the original text
  The Lease Notes section gleans comments and suggstions made outside the context of simple email or text documents
    Lease Notes primarily became available on PDF files marking up the lease
    Lease Notes are keyed to the sections of the lease
    The original PDF files were part of the items presented to Council during the consult prior to engagement.
    Many Lease Note items will be familiar as part of the discussion during the consult
  Dick made most of the assignment of Status Options
    Dick made up the Status Options on the fly in preparing this document
    Consider the Status Options to be suggestive, not definitive
  Dick surely made errors along the way in compiling this document, but hopes that the document has enough redundancy to provide a useful sense of the hopes and dreams of R2P, the Running Home Campaign, and the spirit in which the Mall Lease is being entered.
Legend for Status Options
  Word Choice! | has important legal ramifications
  elsewhere | better addressed elsewhere
  BUDGET | heads up for budget attention
  WIP | Work in Progress
  Concern
  Clarify
  FIX | Fix this as needed
  Negotiate | we can scan for these and assign importance
  Perspective
  Possibility | Strategy idea
  Request
  Context | for what follows
  ? | beats me
  PDF | external document
  URL | web link
  FYI | useful information e.g. contact
  Action | Explicit mention of steps in a process
Resources - Primarily URL links and commentary
  R2P Website http://runningtoplaces.org/
  R2P Collected Documents http://mcp.cc/r2p
    About this URL
      The link reveals an Index — Teble of Contents of the available files
      Dick has removed Dropbox links in this document and posted items on web space Dick owns and better understands
      Resources Dick posts there will include the modification date of the file in the filename for better version tracking
    What to expect at http://mcp.cc/r2p
      An interactive version of this document for viewing! Click the triangles to open or collapse the hierarchy
      R2P Marked up Exhibit A showing public areas
      R2P Exhibit A supplement overview of Mall
      R2P Collected Comments PDF file
        Links in this PDF are clickable
      R2P Collected Comments OPML file
        The actual source document in which Dick maintains the R2P Collected Comments document
        This view is friendlier that it appears at first, really!
          Your Browser will very likely present this in a useful Outline Hierarchy
          Levels in the hierarchy can be collapsed or opened
          When fully opened the entire document may be searched!
          Dick rarely uses this view. Instead has lovely applications which play nice working on the same file, even at the same time.
            OmniOutliner — Delightful manipulation of the outline similar to a very smart word processor which understands outline hierarchy and structure.
            BBEdit — Industrial strength text editor understands the structure of the code. Provides an editable document in a view similar to what a web browser provides, complete with collapsing and opening sections.
            iThoughtX — Can produce visualizations of the structure as diagrams
      R2P Floor Plan
      R2P lease original (PDF of Crude Lease from Mall Management produced by Deb for Dick)
      R2P Lease And Other Important Mall Info (Forwarded emailfrom Joey)
      R2P is Running Home Brochure
      From Mall
        Certificate of Insurance Sample
        DOCX of Lease from Mall Management
        Tenant Design Handbook
  R2P Recent Forms 990 https://990finder.foundationcenter.org/990results.aspx?990_type=&fn=&st=&zp=&ei=263434662&fy=&action=Search
Dramatis Personae
  Lilly — Lilly Westbrook lwestbrook@ithaca.edu R2P Vice President
  Deb — Deborah Drew parkrdrew@hotmail.com R2P Secretary
  Kati — Kati Torello katitorello@gmail.com R2P Board Member
    Kati used to review Mall leases.
  Jim — James Drew jdrew4@twcny.rr.com R2P President
  Rachel Lampert — rdlithaca@gmail.com R2P Development Archangel
    Emerita of The Kitchen Theater
  Jerry — Jerry Dietz jerry@cspmanagement.com R2P Archangel and ex officio Board Member
  Dick — Dick Furnas dick@runningtoplaces.org R2P Treasurer and preparer of this document
    Dick also uses, among others mcp@lightlink.com and ref2@cornell.edu they all land in the same inbox, so don’t worry about copying to any others.
  Joey — Joey Steinhagen joey@runningtoplaces.org R2P Founder and Artistic Director
  Heidi — Heidi Goldstein hjorganics@aol.com R2P Board Member and Mother of Joey
  Jack — Jack Goldstein (also at hjorganics@aol.com ) R2P ex officio Board Member and Father of Joey
  Linda — Linda Harris lsh29@cornell.edu R2P ex officio Board Member and former Treasurer and Finance Manager
  Gina — Gina Speno Gina@theshopsatithacamall.com R2P Contact at Ithaca Mall

    Gina Speno, CRX, CSM
    Property Management/Leasing
    The Shops at Ithaca Mall
    40 Catherwood Road
    Ithaca, New York 14850
    Office 607-257-5338
    Cell 315-374-6664
    Gina@theshopsatithacamall.com
    www.theshopsatithacamall.com

Email Trail
  2018-08-15 email From: Jim Subject: Running to Places floor plan
    R2P Floor Plan http://mcp.cc/r2p/R2PFloorPlan2018-08-15.pdf

    From: "James K. Drew"
    Date: August 15, 2018 7:31:27 PM EDT
    To: "gina@theshopsatithaca.com" , "joey@runningtoplaces.org" , DEBORAH DREW , Dick Furnas , Lilly Westbrook , Kati Torello , Hjorganics
    Subject: Running to Places floor plan

    Good evening,

    Thank you all again for the productive meeting last night. Attached are two floorplans, one of the main floor and one of the mezzanine level.

    I will have prints made shortly for the meeting next week.

    Jim

  2018-08-15 email From: Lilly Subject: Re: Last night's [2018-08-14] meeting
    Using the 'collected comments' report that Dick organized (thank you Dick), we [ad hoc workgroup meeting participants] identified three primary areas of concern that we [R2P] would like revisited and clarified. Those include
      hours of operation
      definition of gross sales
      early termination
    We identified several secondary/tertiary concerns that we would like corrected/clarified. They include everything from
      our name and the location of the mall
      understanding the requirements for our ability to 'sub let' [partner with others to use the space]
      reporting and reconciliation of sales and fees
        [particular concerns here are definitions and time to prepare the reports]
        [when we partner with others, our ability to report properly may be contingent on the ability of the partner to report to us…]
      responsibility for outside contracts.
        [these seem to be ambiguously present all over the place in the lease, including Rubbish, Recycling, HVAC maintenance, insurance coverage for various eventualities…]
        [any such responibilities which fall to R2P will affect the budget]
      In addition, we [All Board members were present at this meeting] approved motions to:
        allocate funds for legal council
        authorize Dick to engage legal council on behalf of the Board of R2P for the purpose of this lease negotiation
        agreed to hire Emily Rocket as our legal representative.
      We meet next Tuesday 8/21 JBC 5:30 Our agenda will included [sic]
        a report on the status of our drawings and construction documents
        a first review of next seasons budget
        hopefully an update from our lawyer.
  2018-08-13 email From: Deb Subject: Re: My thoughts
    We need to review the "hours of operation" and be clear that a lot of our business will be done after Mall business hours. our Sunday shows would be the most affected by early closing of the Mall. We generally do not leave the theater until after 10:00pm. We need to have a clear understanding of when we are allowed to be in our space. this was a constant problem when we were running to all the other places in town. We had to beg or renegotiate extra time to allow the production team time to work after student work times were done.
    Also, does the timeline of signing the lease get renegotiated if we are not ready to sign by Sept 1 or are not prepared, ie permits and construction material lead times, architectural and engineering drawings? HVAC, electrical and structural engineers have not yet had the time or ability to get into the space to prepare their documents we will need for permitting. The Mall is allowing 2 "free"months for demolition and construction. Does that start on day of signing or Sept 1?
  2018-08-13 email From: Kati Subject: Re: My thoughts
    Contractual:
      1. Spellings, locations, names etc. I [Kati] am sure will be addressed in a final lease.
      2. I [Kati] still believe very strongly, regardless of the initial conversations with the lawyers and Mall Management that the definition of Gross sales must be spelled out and the exclusions specifically listed, for the following reasons:
        a. The lease specifically mentions "actual charges for services performed, business conducted..." Section IV.C(a)
        b,. referring to same section - if we let another organization use our spacel their revenues earned from using the space have to be included in our monthly calculations. See IV.C(a) and IV.C(e). They will also be required to provide financial records to confirm those numbers. Section IV.C.(e)
        c. Section IV.C(d) mentions review, audit and controversy along with a 3 year potential look back. Cleaning up these definitions will mitigate the chances of a "Controversy" at least.
      3. Utilities/Waste Disposal: do we get to inspect bills and calculation to ensure no overbilling and availability of reimbursements of such at the end of each lease year?
      4. Waste Disposal: (and to a lesser extent utilities) do we know if we are required to hire our own service or if the landlord bills for this? The lease is vague and infers that it can either provide it of require us to hire our own; but it would be good to know what current practice is.
        [An actual Formula would be invaluable]
      5. Section XIV. Subletting: This $2,500 fee each time we ask permission to sublet: Does this come into play every time we may consider letting another organization use our space? It would preclude that certainly. We need additional terms or exclusions here as well.
        [Insurance implications]
        [Legal implications]
      6. Section XXIII T. Payment under Protest: We are required to pay fees "under protest" rather than withholding payment if there is a dispute. This section says that once the dispute is resolved the Mall will be required to repay the tenant if resolved in the Tenant's favor but is silent as to when. In many parts of the contract there are time lines and due dates for the tenant "15 days after end of month" for example for Excess Rent calculations and financial statements. Shouldn't there be a timeframe by which the landlord HAS to remit reimbursement of overpayments? 15 days after resolution? 30 days? Something reasonable or the Mall can hold the money as long as they want the way this is worded.
    Clarifications:
      1. Signage rules Section VI.D. We will need signage so we will need clarification on what the general parameters/practices are before we start to design anything.
      2. What is the current status of waste disposal? Will we contract on our own or pay the Mall a portion of a bill? Lease is very vague.
      3. Are utilities in this section separately metered?
      4. Are we responsible for our own ISP and WIFI? It's not in the lease so I [Kati] think so but we should be sure.
        [At meeting of 2018-08-14 Jim said his understanding was yes]
      5. Pest control: Is there a minimum requirement? Monthly service? Quarterly?
      6. Section XXIII.G HVAC cerfification of maintenance and good working order is only required when we quit the premises according to the lease. I [Kati] do think we should have an HVAC maintenance/inspection contract for at least a yearly cleaning/inspection - this will reduce the risks of having a large problem or unexpected expense.
      7. Can we have an HVAC contractor inspect the system before we sign the lease? This is an "AS IS" contract and I [Kati] would hate to walk into an impending disaster - this area of the mall has been unused so long.. Food for thought.
    Budgetary Impacts (monthly):
      1. Minimum Rent: $2,500 (first year)
      2. Utilities: $1,000
      3, Waste Disposal $ 125? Alternative? Casella? This also needs to be included in the build out period because it will likely be significant
      4. Internet/WIFI $ 150?
      5. Pest Control: $ 50? More?
      6. HVAC contract $ 150ish per year for lowest level. May want a mid-level that includes an annual cleaning
    Random Thoughts:
      1. This Board has decided for the moment that we aren't going to sell "SWAG", however, we should not lose sight that this would be a component of sales. This Board, or a future Board, may re-evaluate the situation and determine that selling SWAG is an important part of name recognition, advertising and revenue enhancements. I [Kati] think we all know that things tend to go in cycles.
        [Implications fo Gross Sales definition]
        [Implications for collection of Sales Tax]
        [Implications for Unrelated Business Income]
        [Could/should there be a relationship between Gross Sales and Unrelated Business Income?]
      2. We are going to have to take many of the terms of the lease into account if we continue to consider that we will pursue allowing other organizations to use the space on an occasional basis - whether as a friend or as a revenue enhancement or both. The terms of the excess rent stipulations seem to me to say that those organizations revenue reports will have to be part of our monthly revenue reporting. Should they push us over the threshold in a particular month there should be stipulations in any use contract as to what their obligations are for that excess rent. Or an estimate should be built into the rent amount.
      3. It's time for R2P to build a Development budget and plan. We will need it!
  2018-08-13 email From: Lilly To: Dick Subject: Lease Notes
    I [Lilly] preface this all by saying right now I [Lilly] have no deal breakers. I [Lilly] think we need to look at the WHOLE lease once it comes back to us from the lawyer. I [Lilly] believe-for me- it will probably be a combination of factors that might make me consider a plan 'B'.

      [You've got a plan "B" ??? Do tell!]

      My 'B' would include a 'hold please' announcement-we are after all a theatre company- and I [Lilly] would suggest we put the the money in some form of holding account. We would of course need to ask our donors' permissions and if they asked for the money back-we would have to give it back. R2P would continue as we alway have while the board considers options for moving forward. It's not ideal by any means, but it will buy us some time.

    Requests:
      -Can we get a ‘plain term’ or ‘plain language’ lease? Something that is not so dependent on legal speak.
      -Can we wordsmith this document to accurately reflect names, dates, and locations.
      -Can our lawyer properly describe our organization-Not for Profit, 1 ½ full time employees, volunteer dependent, yearly budget of $$, serving 250 kids/year which would bring constant foot traffic from family and friends.
    Clarifications:
      Utilities accounting:
        -Do we get to see the documentation that determines if we have exceeded our monthly allowance of $1000?
        -Do we get reimbursed if we are over our monthly allowance?
        -How long do we have to ‘settle up’ if we are under?
      Gross Sales accounting:
        --Any chance we can make this a 30-day turn around?
      Rubbish removal-
        -Do we need an agreement with an outside contractor? Why if Mall provides removal?
        -Will our current disposal method include ‘construction waste’ from our set construction?
      -How does recycling work?
      HVAC- maintenance?
      Pest Control?
      Removal of our property upon lease termination?
      -What happens if WE need to terminate the lease?
      -Does our current insurance comply?
    Renegotiation/clarification:
      -Gross Sales-I [Lilly] would like specific language for what it includes and what it excludes.
      -Rent Partners (‘subletting’) Can the charge for review be reduced to $500.? If they are a ‘rent partner’, would their contribution to our organization be considered ‘gross sales’.
      -Termination rights-
        (I [Lilly] know this has been discussed and determined non-negotiable. I [Lilly] would ask our lawyer for one more pass to remind the Mall the ramifications of a 30-day termination. This could be a PR snafu as we would have to cancel our upcoming production –compromising both income and community good will-in order to evacuate the premises. We have TREMENDOUS community support. Do they really want to be the ‘big bad mall’ that closes down the kids show? In looking at our production calendar, a 90-day termination would allow us to mount the next production AND arrange for removal of all of our belongings to comply with the notice. )
  2018-08-12 email From: Jim Subject: Re: Board Only-Mall Lease meeting
    Gross Sales is limited to income derived from ticket and concession sales. Donations, grants, sponsorships and other lines do not qualify as gross income. They are donations not income from sales. This position was discussed and agreed upon with Gina during our meetings. I [Jim] would suggest that the definition of gross sales be added to the lease agreement as indicated above.
  2018-08-07 email From: Rachel Lampert Subject: Re: Lease ad hoc workgroup [was: Re: Lease PDF with Comments...]
    Dick contacted me about trying to figure out what is "gross sales" are vis a vis fund raised money.
    I [Rachel] am not comfortable with this approach of trying to figure out a way around the wording of the lease. A paid attorney needs to be consulted to determine this. The first conversation needs to be about the legality of a NFP entering into the percentage agreement.
    I [Rachel] will find it impossible to ask people for gifts if a percentage is coming off the top until I [Rachel] know the legal ramifications from a contract attorney.
    There are other issues in the lease that a hired attorney should be negotiating on behalf of R2P. You/the board cannot/should not be the negotiators. This is too critical a contract to do without a consultation. And, Adam has already raised issues.
  2018-08-07 email From: Lilly Subject: Mall Lease meeting notes.
    These are not official minutes. I [Lilly} just tried to capture the conversation in the room.
    We began with a brief discussion of asking Adam to join us at the next Board meeting. We shared ideas about what attributes we are looking for in a lawyer.
    Katie raised the possibility of reaching out to GEWN SEAQUIST. She is a professor at IC We are not sure if she would be willing or able to participate. We could possibly receive some advice from her.
    We raised the question of who did Rachel Lambert [sic] Lempert use for the Kitchen renovation. It was noted that that was a building purchase. We are in need of advice for a lease.
    Dick took the liberty and incorporated all notes in a revised lease. (SEE ATTATCHED). It was a much easier document to review.
    Lilly shared the conversation she had with Joey. Noting the sticking pint of the 30 Day lease termination. He noted in the conversation that he does not believe the mall is actively seeking another tenant nor is there is buzz in the media of someone coming to town.
    When began to review the lease line by line. We didn’t get very far when Dick noted that we are a 501 c and the lease does not currently conform to our charter.
    Katie has a significant problem with the termination rights. Katie reminded the group that we could be replaced by a non-retail entity.
    Deb shared with us how she has researched the idea of mixed-use spaces and should someone come along that needs the sq. footage-we could be out.
    Dick asked what is the possibility of purchasing insurance against such an event. No one had heard of such a thing but it is certainly worth exploration.
    Heidi raised the idea that any investment had risk. There could be any kind of natural or man-made disaster and our donors would not hold us responsible.
    At this point the group agreed that we need to negotiate one more time.
    We then came across the article involving ‘gross sales’. While we may define our GS as tickets, concessions, merchandise and anyone we may partner with to use our space, Our Partnership Rent is if we choose to allow someone o use our space.
    ** Please note--We should not ever call this SUBLET we would have to request permission for a sublet (at the cost or $2500) and there is no guarantee we would receive permission. They would be our Rent Partners. Another detail in the lease we need to confirm.
    [Similarly, never use the term Educational Purposes — that invokes a whole category of Code and other requirements]
    The lease does not exclude donations, fundraising, donors or sponsors. Unless that is clearly defined, we may not be able to afford this move.
    We would pay a monthly percentage on those monies if we cannot confirm this exclusion. This is the very nature of how we do business.
    As we brought the meeting to a close, random ideas and concerns surfaced:
      Utilities. $1000. Per month in advance. There is an end of the year accounting and if we did not pay enough we will owe.
        -Do we have access to documentation to confirm those numbers?
        -Do we get a refund if we pay too much?
        HVAC_--do we need to retain a contractor with a maintenance contract.
        Rubbish removal- do we need to retain a contractor with a maintenance contract.
      How much of our operating budget will we need to set aside for contingency??
      Agreed to one more round.
      Nominated Katie to be a spokesperson.
      Agreed for need of lawyer’s services. Dick will reach out to Adam for inquiry with possible invite for retention.
  2018-08-08 email From: Jerry Subject: My Thoughts
    I [Jerry] want to point out here that the lease that has been presented by The Mall is an accurate representation of the terms that had been laid out in bullet point form when the discussions were first taking place about renting the space. These points were widely shared with the Board at that time and the concerns that were expressed were discussed with the Mall’s representatives and the decision to proceed both with the project and the lease were predicated on those conversations.
    In the more recent emails that I [Jerry] have read I [Jerry] have seen two major areas of concern emerge that I [Jerry] would like to comment on specifically; the clause that would allow the Landlord to give notice and end the lease in the event they identified a higher paying tenant and the additional rent clause which provides for a certain percentage to be paid if R2P proceeds exceed a certain level of income in any given month.
      As to the first point of lease termination, we were told by The Mall that this point was non-negotiable. We attempted to soften the potential harm from this clause by asking for a pro-rated refund of the improvements R2P would make to the space (i.e. if the lease was canceled 5 years into the 10 year term then The Mall would rebate 50% of the improvements R2P made). When we were told The Mall wouldn’t accept this proposal Joey, quite reasonably pointed out, that the space had been sitting for over 10 years without a significant tenant being identified. This coupled with the fact that there exists a great deal of space at the mall, much better located and easier to work with, that The Mall can (and has to) lease long before they figure out a tenant for the old movie theater spaces. Think about the old Sears space and what about Bon-ton?! We decided that while this was a possibility that, given the current state of retail today, it was a low percentage risk, and we were prepared (I [Jerry] thought) to accept that.
      As to the additional rent concerns this, too, was discussed amongst ourselves. To be clear this is a ‘sales-driven’ clause. In our conversation with The Mall we were transparent and indicated that, while the space would enable R2P to enjoy longer runs of the shows it produced, it was the intention of R2P to sublease the space to other theater companies for their performances and that R2P would derive additional revenue from this. We did the math on this and arrived at the conclusion that there were perhaps a few months where this sales clause might kick in. The dollar amount was not perceived as onerous and the decision was we were prepared to deal with it. I [Jerry] think it is a stretch to think that our fundraising efforts (i.e. monies raised for this move or down the road to support the mission of the organization) could be construed as being ‘sales’ and thus be subject to this rent percentage calculation. Certainly ask The Mall about it but I’d be very surprised if that was their interpretation. For the record, if I’m wrong, then I’m in complete agreement that that would be cause to step back from this lease.
    I [Jerry] know I’ve gone on very long with my thoughts and I [Jerry] have just a little bit more to say. We all know this is an amazing opportunity for R2P, and I [Jerry] truly mean ALL. The community has backed this idea wholeheartedly. The monies raised to date speak to the deep respect and gratitude that people feel for what R2P (and, yes, Joey) have done for our community. I [Jerry] wish I [Jerry] could tell you that landlords wrote leases that are tenant-friendly but it’s not how the game is played. This may be even more so in commercial leases where so much more responsibility is placed on the tenant. I [Jerry] also wish we could create a situation for R2P that is 100% risk averse. That, too, is regrettably not realistic. As a responsible group of individuals you/we have to weigh the amount of risk against the benefits to the organization. For myself, and as someone with a significant stake in the game, I [Jerry] feel the benefits far outweigh the risks. Several of you have asked for my opinions in the past and I [Jerry] am grateful that they have been valued.
    in the end The Mall will only go so far and finally just say ‘take it or leave it’. You are all smart people, you’ve proven that - now we have to be brave and believe we can do this.
  2018-07-27 email From: Dick Subject: Lease PDF with Comments from Dick [was: Re: Lease and other important mall info!]
    see summary PDF document collecting these and other comments
      Running in Places Theatre Company_ithaca.all_edits&comments_Notes_displayed.pdf
  2018-07-26 email From: Kati Subject: Re: Lease and other important mall info.
    Page 1 #2: Percentage rent - Is this in addition to the $2,500 per month? Does monthly gross sales include donations, grants, pledges? These items are not specifically included on page 2 nor are they specifically excluded on page 4. These should be specifically excluded on page 4 in my humble opinion.
    I [Kati] believe in reading this section that concession sales will be included in that monthly gross receipts calculation. We should note that for future reference and ensure that our internal controls over such are significant enough not to cause troubles with the reporting requirements.
    Section VIII: Utilities & Rubbish Disposal:
      We have to pay $1,000 per month in advance for utilities; in addition to the rent. Is this in the budget or projections?
      The same goes for waste disposal (not $1,000). at the end of each lease year the landlord will provide a statement showing the usage and any overage or underage of payment and one party has to reimburse the other for the difference. I [Kati] don't see where it confirms tenant can review the actual bills; but we may want that. This could get costly. (pages 8-9).
  2018-07-26 email From: Joey Subject: Lease and other important mall info.
    Forwarded from Gina Speno

      From: Gina Speno
      Subject: New lease Running to Places
      Date: July 26, 2018 at 3:42:18 PM EDT
      To: joey@runningtoplaces.org
      Cc: Beth Tanner

      Please find attached the following items:
        . The new Lease Agreement – please review and have two sets printed, signed and notarized.
        . Please return both sets to my office along with the first month’s rent and security deposit; payable to Ithaca Mall Realty LLC.
        . An updated insurance certificate for this space will need to accompany the signed agreements.

      Gina Speno, CRX, CSM
      Property Management/Leasing
      The Shops at Ithaca Mall
      40 Catherwood Road
      Ithaca, New York 14850
      Office 607-257-5338
      Cell 315-374-6664
      Gina@theshopsatithacamall.com
      www.theshopsatithacamall.com

    Forwarded from Gina Speno

      From: Gina Speno
      Subject: tenant buildout
      Date: July 26, 2018 at 3:52:01 PM EDT
      To: joey@runningtoplaces.org
      Cc: Beth Tanner

      Here are a few things to review:
        · Demo permit/building permit: As the Landlord we are required to apply for these permits.
          o A complete set of demo plans and building plans will need to be submitted with each application. The cost of the permit is based on the total cost of the project; please provide this amount to us.
          o We will need the General Contractors information and a list of all the sub-contractors being used.
          o A sample insurance is attached for the General Contractor, please share this with them. They need to supply us a certificate and they need to supply the Village of Lansing a certificate.
        · Pre- Construction Meeting:
          o Once we submit the plans for review to the Village of Lansing and our Tenant Coordination person, we should schedule a meeting with your GC to review various other elements.
          o Once you have possession of the space and you have a GC contacted, we do require they install the barricade and coming soon signage should be placed on the barricade.
        · Signage:
          o Store signage should be submitted at any time and does not require a permit.
Lease Notes
  “Tenant” is Running to Places Theatre Co. Limited, a 501(c)3 Charitable Organization registered in New York State
  I Basic Lease Provisions
    A situated in … Ithaca
    C Lease Term
      3 Landlord’s Termination Right
        change 5 to 15 business days
        “said third party”
          except where pursuant to other terms of this agreement... Note: Page 21 #S.Relocation Note: What about if a production is planned, advertised, tickets sold, etc.? Commitment to work with tenant to terminate lease after such event.
    D Rent: (Article IV)
      1. Minimum Rent (Article IV)
        This amounts to 5% per year compounded Annually
      2. Percentage Rent (Article IV, Section B):
    I. Permitted Use: (Article IX)
      Note: Keep this simple here. The Premises shall be used for conducting business therein in fulfillment of the tenants' mission and as set forth in Article IX and for not other purpose without prior written consent of the Landlord. Such consent shall not be unreasonably withheld.
    J. Company Name
    M. Notice Address
      1. Tenant
  II Premises
    (“Shopping Center”) is not shown in its entirety
    Should any utility work impact or disrupt the operations of the tenant, the Landlord shall make every effort to provide advance notification of such work.
  IV Rent
    B Percentage Rent
    C Gross Sales
      (a) Definition of Gross Sales
      (b) Gross Sales Exclusions
      (c) Reporting of Gross Sales
        Any relaxation of the speed of reporting would be welcome
        (a) Monthly
          Question: If you do not have a full time accountant, is this reporting onerous?
          Can we minimize extra work here by using reports already in place?
        (b) Yearly
          Can we minimize extra work here by using reports already in place?
        (c) Delivery of Reports
          If upon filing of such statement, the Landlord shall refund any overpayment of Additional Rent with a maximum of $100 late payment fee charge deducted from refund.
        (f) Tenant’s failure to comply
          Can’t imagine anything intentional, but gotta run a tight ship
    VI Construction
      C Tenant’s Construction
        Yes this is a tight timeline. What about subsequent construction or alterations of space pending fundraising, etc.
          Can we Triage construction and its approval in stages to assure enough of the space is ready for December?
      D Signage
        What is “exterior”
        approval may not be unreasonably witheld
    Common Areas
      See Appendix to confirm Public Restrooms
  VIII Utilities and Rubbish Disposal
    A Utility Charges
      We have to pay $1,000 per month in advance for utilities; in addition to the rent. Is this in the budget or projections? The same goes for waste disposal (not $1,000). at the end of each lease year the landlord will provide a statement showing the usage and any overage or underage of payment and one party has to reimburse the other for the difference.
      I [Kati] don't see where it confirms tenant can review the actual bills; but we may want that. This could get costly. (pages 8-9).
      If other/all tenants leave the mall does the responsibility for utilities go to 100%? Perhaps limit to % square footage ratio to the rest of the mall
  IX Use of Premises by Tenant
    A Tenant’s Use of Premises
      Would be helpful to communicate a simple vision statement here to guide use: Tenant's Use of Premises.
        Running To Places Theatre Company R2P is a youth theatre company, fostering a safe and supportive community which provides opportunities for the development of life skills to all interested youth through theatre.
        The premises shall be principally used for conducting business in fulfillment of the mission of the tenant including but not limited to: theatrical or other performing arts productions, performances, rehearsals, training/ lessons; scenery, props & costume construction, and storage; dressing rooms, administrative offices, etc.
        Furthermore, as a not-for-profit community arts organization, the tenant may from time to time contract with any subtenant, licensee, concessionaire or other rental occupant as may be required for generating revenue, community engagement or other private events or activities as may be approved by the R2P Board of Directors.
        Any use of the premises outside of the scope of the above noted activities shall require prior written consent of the Landlord. Such approval shall not be unreasonably withheld.
      B Operation of Business
        Tenant is a 501(c)3 Charitable Organization. As a youth community theatre organization, tenant agrees to be open as required, consistent with its mission.
  XI Repairs and Alterations
    A Repairs by Landlord
      The charges for such repairs shall be limited to the actual structure leased by tenant, and shall be amortized over the reasonable life of such repairs.
    ? Repairs by Tenant
      No Section number.
    Alterations or improvements by Tenant
      Section out of Sequence
    D Removal of Improvements
      Section out of Sequence
      What about seats? False floors? Anything else we care about?
  XII Indemnity and Insurance
    B Tenant’s Insurance
      All certificates of insurance required of Tenant pursuant to this Article shall name each Landlord entity as well as the Namdar Realty Group LLC as Additional Insureds and Certificate Holders.
  XIII Damage and Destruction
    Let’s be sure our insurance covers this stuff!
  XIV Assignment and Subletting
    This whole section potentially threatens some of our collaboration plans depending on definitions.
    “Tenant shall not permit any business to be operated in or from the Premises by any concessionaire or licensee without the prior written consent of Landlord, which consent Landlord may withhold in its sole discretion.”
      If you remove this sentence, all other activities could be covered by Section IX A.
  XVII Notices
    No Email or Fax?
    Contrast with XXIII O Counterparts
  XXIII Miscellaneous Provisions
    C Broker’s Commission
      Is anyone getting a Broker’s Commission?
    O Counterparts
      “In order to facilitate the agreements contemplated by this Lease, signatures transmitted by facsimile machine or signatures transmitted via e-mail in a "PDF" format may be used in place of original signatures on this Lease”
      Contrast with XVII Notices
    R Joint and Several Liability
      Tenant is R2P Only, correct?
    S Relocation
      “Tenant to another premises “
        Tenant and any sub-tenants, if any, to other suitable premises
    Y Recording
      “This Lease shall not be recorded in any public records office or department by Landlord or Tenant.”
        As a 501(c) 3 R2P may have reporting or disclosure requirements which differ with this clause
  Missing pages 23, 24, 25
What do we need at signing?