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Part 3: STUDIO WEST RADIO INTERVIEW WITH GAYWAVES

Part 3 of 3:

Studio West Developer Betsy Figgie and Director of Programming, Education, & Outreach Lady J interview with GayWaves Radio Show.

Eric:
So can that. Can the for profit piece of this, which is a substantial. Piece of the business that has to be done. Can cannot survive without the charitable subsidies.

Betsy:
I would say it could, but that's not really fair to the community. And we want to give people the opportunity to be a part of this, too. And we've seen a really strong outpouring from people wanting to donate their time or their services or their expertise. But we've also gone live with our foundation online and West 17 Foundation dot org that is accepting donations for people that want to be founding members. And they have been coming in steadily and people are saying thank you. They're saying thank you to us for allowing them the opportunity to be on the ground floor as a donor to make this a reality. So if we took philanthropy out of the equation, that would be a real crime, I think, because we want to make it available to people to be proud of, to say that they're a part of this and that they're supporting it. And that's what's going to hold gentrification at bay, is the affordability of the project. And so what we do, some of these subsidies, if it was just for profit. Absolutely. I mean, I think we definitely need some student housing. We need support for LGBT youth that are homeless. We need these opportunities. And that's what this philanthropy is coming in to support. So I don't think you could do it or you wouldn't want to do it without philanthropy.

Eric:
Ok.

Eric:
How much how much goes the philanthropic side need to raise a per year in order for it to be successful doing what it needs to do?

Betsy:
Well, let me give you an example, just how we're approaching philanthropy and being fiscally responsible. Let's take a case by case and say that one of the apartments in 11, 600, Detroit opens up and we're allowed to market that particular apartment for LGBT student housing. And we know that we need a subsidy of three hundred dollars a month for twelve months to make it work. So then we can approach the foundation and ask them if they have the resources to do that particular element of the project. And the answer is yes or no. So either half the cash in hand to do it or they know that the cash is coming in and then not commit to that for a certain dollar amount, for a certain finite period of time. And so that in and of itself is just a small example of how it would work for a year to provide one apartment subsidy for two to four LGBT students. You take that and then you multiply that by 10 or 50 or 100 of these different smaller elements. And we don't have to have a certain Bogi every year. We don't have overhead within the foundation. So all of the money that's coming in right now is just going to be able to go out for support. So if somebody comes to us as an LGBT business and they say we'd like to locate in one of the commercial spaces in the Phantasy, and after working with them, we find that it's going to take twenty thousand dollars to build out their space.

Betsy:
And if they don't have that and if we can't build that into their rent and keep it affordable for them, we may ask the foundation, would you be willing to invest 20 thousand dollars with this particular technique in this particular space to get a certain result, which is the look and the build out that they're looking for? So, again, a very isolated, finite time constrained, dollar capped project that they either have the funding court where they don't. So we're not going to get the foundation upside down in a situation where they've made all of these commitments and they can't make good on it. I mean, that's the role of the board to make sure that they're budgeting and that they're very realistic about cash flow. A certain amount is going to be set aside for programming and support, a certain amount they'll use for capital, certain amount for rent subsidies. It's up to them. It's where they see the priorities. We can elevate some of these ideas to them. It's up to them to say how they want to sequence these different elements of giving and to what extent and to over what timeframe.

Eric:
Can you. Can you understand, though, where people might went to a little later at a nonprofit corporation that takes charitable contributions? Having a relationship with with a for profit project like this,

Betsy:
If there were some costs, representation of the for profit businesses on the nonprofit board, that would be a problem. We are not on the board. Dan O'Malley, as the president of Lakewood City Council, is not a voting member because we may be asking the city of Lakewood for some some subsidies. And, you know, he can't be you can't have that conflict. So we've heard about this and we're we're developing these different entities very, very thoughtfully. And, you know, one of the tenants of nonprofit accounting is the idea of restricted versus unrestricted gifts. So if a donor wants to donate fifty thousand dollars unrestricted, it's to the board that makes the decision of how to invest or spend that money. If the donor wants to put a restriction on their money and say this is only going to drag residency program, then that money is locked until we until we deliver.

Betsy:
And so it can't be touched. That's just I mean, that's the way that IRS puts it.

Eric:
Do you know of anything of any other projects that are done like this.

Betsy:
In terms of building an entire neighborhood from scratch? No.

Eric:
Do you know of any other projects where where the for profit stuff this is subsidized by the by the charitable money like this?

Betsy:
I would have to think about that sometimes when we're putting together transactions. We do put elements in the capital stack where it is a for profit real estate holding company, just because we have to call in tax credit index investors into the ownership structure for them to be able to use the tax credits. So there sometimes is a mix between nonprofit, the operating entity, the tenants, the sponsor of the project, if you will, and the for profit nature of the real estate just to maximize the benefit. That, again, is coming to the project. So sometimes it's a strategic it's a a legal or an accounting issue. But again, the more subsidy we can bring into the project, the lower the rents, the more affordable it is for the long term.

Eric:
So when will this open up?

Betsy:
So it is open. So at the 11th 600 building, we closed on that. Again, it's fully covered. We're meeting the tenants.

Betsy:
We have a prop that some of my friends building. My Friends. Yeah, those.

Eric:
Now, those are those are those apartments currently rented to people were only meet here. Q.

Betsy:
Not necessarily, we haven't asked. OK. So anybody that is attending today is could be attending for life as they elect to turn over those leases. Then we will take on a more active role of tenants in the building with people from this community, from the this community.

Eric:
We'll see that. That's that's my other question, though, is it if if those there's there's eight unitive. Correct. So so let's say that, you know that the people who are in there now find it to be really attractive to stay out. Well, I welcome that. But then then the other side is the mission, which is serving, for example, the students that you describe.

Eric:
There would be some space for them until they leave or until we find the next building that would be student housing.

Eric:
Do you have your eye on another building?

Betsy:
Of course we do.

Eric:
You tell us where it is?

Betsy:
To answered your questions regarding the rollout of the project. Let me get back to that point. We are looking to activate the commercial spaces within the fantasy's, probably in the. I would say October timeframe. So we are getting estimates to Radio HPLC to build them out. White box. We would like to have one of the commercial spaces to be a coworking space. And within that space, we would have a podcast studio for the LGBT community to rent maybe twenty five dollars an hour to top of the line equipment to record their broadcasts and do a fantastic job with this in a sound working space again. Everybody knows that model. We'd love to have it. It would be attached to it. In one of the commercial spaces, that would be a coffee shop. I mean, coworking space and coffee shop to have some type of Soga then you. I think it's really important. We're also talking about integrating a library elements into the coffee shop. And then another one of the commercial spaces we're talking to somebody that is currently serving the trans community. And I don't want to get into too many specifics, but there might be an opportunity to build out that space since there is a basement space underneath that particular unit that we're looking to activate at some point as a youth clubhouse.

Betsy:
There would be a separate entrance security people overseeing this. But the tenant space to actually have this individual working. That could be a reality. And so filling those commercial spaces with very thoughtful LGBT owned businesses or with organizations that are geared toward the LGBT community, I mean, that's gonna be our next step. And you're going to see some activity over at the Phantasy as soon as we purchase it. And, you know, the commercial spaces will be open. Probably, I'm guessing, October. Meanwhile, we're going down the path of putting together of financing and all our approvals for the field house unheard. We test Liquid's architectural waterfront view last week on first time through. And they had warned us when we started the process that most projects take two or three sessions, two or three individual meetings with the Architectural Board of Review, but with Larssen Architects and with our team and Hickley construction helping us with our cost. Estimating unanimously the board approved us. Now we're teeing up to go to the planning committee in the first week of July. You know, they have certain questions that they want answered around parking and accessibility, all everything that we're working through right now. We're working on some agreements with some of the businesses in the neighborhood to share parking and to improve the parking situation when liquid as a whole and to really be able to reserve sufficient parking and other locations for scooters and bikes and things like that in the off hours. You know, during know, maybe after six o'clock and before 6:00 or 7:00 a.m. So it varies by day. So that portion is going to be rolling out. And then we're going to be activating all of the entertainment venues within the Phantasy. There are a couple of them on the ground floor that are fairly easy. The chamber and the symposium, we could flip that switch today if we wanted to.

Betsy:
Now we want to refresh it and give it a more LGBT vibe and just make it a little bit just a little bit more geared towards the LGBT community.

Betsy:
But, you know, you can have a certificate of occupancy. They have licenses. We could open those doors immediately covered aside.

Eric:
You can use what you you can use the phrase "queer it up here."

Betsy:
Two of the six that we could, you know, open up within weeks of ownership.

Eric:
So, OK.

Eric:
So this fall and then what about for the rest of it?

Betsy:
I would say we're looking at June of twenty twenty two. For everything in the Phantasy complex. When June is Pride Month, we always like to use fat as a bogey. That's why we wanted to get the press release and, you know, some of the media information out this month. It was Daniel, I weren't debating. Do we wait until we actually have title to the Phantasy to do this, or do we we know we're going to close on the fat, on the Phantasy. We've gone past the due diligence period. I mean, we're committed. And so why would you pay for anything on that? But we didn't want to wait until mid July when I think the world and Cleveland just needed some good news. Also.

Eric:
What what What did you pay for the Phantasy?

Betsy:
What's that?

Eric:
What did you pay for the Phantasy?

Betsy:
We're paying a million, three thirty fives.

Eric:
That's substantial. It is.

Betsy:
It's worth it. It's fifty five thousand square feet. Oh, yeah. What is that unapparent per square foot basis? I mean, it's a great building. It's six venues and it's all. I mean, it's a landmark.

Betsy:
It's there's just history there.

Plus, it's haunted. So that's where the premium. Right. There.

Eric:
It is,

Betsy:
Of course, as it is. So I've seen the documentaries.

Betsy:
It's awesome. And according to the DeFrasia family, Shelta Frazier told me that the spirits are very pleased with what's happening with this transfer. There are some other companies that had wanted to buy the building to tear it down, to build condos, and the spirits weren't having enough.

Eric:
Now what what is the entity that will take control of that building? What? Who? Who will that be?

Betsy:
Title then will be titled in an LLC called West 117 Development Phantasy LLC and that entity. So each of these buildings is cooking its own legal entity. And that's just for accounting purposes and insurance purposes. Right. That W 117 Development CSC, LLC is 100 percent owned by our real estate holding company called West one 17 Development LLC, which is owned equally by my company, Indian Health Company.

Eric:
Ok. But it sounds exciting.

Betsy:
It is exciting.

Betsy:
We want you to come come for a tour.

Eric:
I could do that.

Betsy:
Ok let's have you.

Eric:
All right.

Betsy:
Do you want a job.

Eric:
A job?

Betsy:
Yeah.

Pass the hiring committee test, though.

Lady J:
I was just going to say.

Betsy:
If this radio thing doesn't work out for you. We may have another day.

Eric:
Believe it or not, this radio thing doesn't doesn't pay anything. So it is what it is. But, you know, it's a very interesting project and it's. And it's happening right here in beautiful Cleveland, Ohio, at a perfect time in the middle of the pans, out in the middle of it, in the middle of the middle of a pandemic, that that may actually not be over by the time you go to open these venues. But but I'm sure that I'm sure that that can be that can be handled as well.

Betsy:
This isn't our first rodeo. We're we're planning for the worst. And, you know, what we're seeing is a whole lot of good karma and everything lining up in the project's favor. I mean, it's it's a very altruistic vision, I believe. And if you enter into something with a very clear vision and you don't have a personal agenda to fill. Things tend to work in your favor and karma just takes over. And we've seen that a hundred times. I got to say, like, I have never worked on any project that I have enjoyed and been so happy to be a part of this.

Lady J:
This is like the first time working in nightlife where I don't feel like when dealing with the people at the top, that I'm just busting horns all the time and having to really go to bat for everyone every single second. But I'm actually like, let's see, Daniel, listen to me. And they let me go to the community and ask the community questions, bring that information back, incorporate it into the project. And like that, I think it's gonna be one of the things that makes the project. So you meet.

Eric:
Well, clearly it is. It is groundbreaking in a number of ways. So anyway, we look forward to continuing to follow this and they'll be coming out for a tour at some point when when the center opened up in its new building, we came out and did a tour and we broadcast some of that to her on the air. Might be might be inclined to do the same thing when you open the, you know, some of your better venues. We'd love to have you. All right. Well, folks, this has been Jeremia Davenport, also known as Lady J. And Betsy Figie tell you about the development project in Lakewood, Ohio, that is set to open relatively soon. So thank you for being on gay waves and good luck with the project and we'll be in touch. T

Betsy:
Thanks so much!

Lady J:
Thanks for having us!

Eric:
You're very welcome. Bye

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