Big Nonprofit Ideas for the Other 95%
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George Grace: First, we talk through the walk through. How do you find the best space and use different spaces to strategically head into your lease negotiations? Our expert is George Grace, president of G.E. Grace & Company, who has done this work for dozens of nonprofits.
Robert Smith & Kate Peila: Then, what lease terms do you need to be careful about and what are the negotiating points? Lease expert Robert J. Smith, Esq. and Kate Peila, executive director of Dance New Amsterdam, talk through DNA’s less-than-desirable lease to bring out lessons to help you get the best lease next time.
Here is a link to the podcast: 059: Learning Office Lease Lessons
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Welcome to tony martignetti non-profit radio, the aptly named host. We’re always talking here about big non-profit ideas for the other ninety five percent. I very much hope that you were with me last week when we had the nine eleven effect, christine cronin, president of and white charities dot or ge was with me to discuss the first online giving responses to the attacks and what’s changed as a result, and lessons learned from then also i had david campbell, professor of public administration of binghamton university. He also had firsthand experience on nine eleven from his work at community service society in new york city. We talked with david about his opinion piece in the chronicle of philanthropy. The lessons of nine eleven philanthropy a decade later this week, we’re learning office lease lessons first we’re going to walk through the no, i blew it first we’re going to talk through the walk through how do you find the best space and use different spaces to strategically head into your lease? Negotiations are expert is george grace, president of ghee grayson company, who has done exactly this type of work for dozens of non-profits then what least terms? Do you need to be careful about and what are the negotiating points? Attorney robert j smith and kate piela, executive director of dance new amsterdam, are going to talk through the dance companies less than desirable lease to bring out some lessons to help you get the best lease next time. In between those segments, it’ll be tony’s take two as always, at roughly thirty two minutes after the hour, a little talk about my stand up comedy, which is on my blogged and also the next-gen charity conference, where we’re going to be media partners. We’re live tweeting, today’s show. If you’re on twitter, use hashtag non-profit radio to join the conversation on twitter our producer sam will be monitoring that for us if you prefer the phone so nineteen ninety eight, but if you prefer the phone, we’re at eight seven seven for eight xero for one to zero. We take a break and then when we come back learning office lease essenes, i’ll be joined by george grace, so stay with me. You’re listening to the talking alternative network. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com. We look forward to serving you. Is your marriage in trouble? Are you considering divorce? Hello, i’m lawrence bloom, a family law attorney in new york and new jersey. No one is happier than the day their divorce is final. My firm can help you. We take the nasty out of the divorce process and make people happy. Police call a set to one, two, nine six four three five zero two for a free consultation. That’s lawrence h bloom two, one two, nine, six, four, three five zero two. We make people happy. Hey, are you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com. Welcome back to tony martignetti non-profit radio. I’m joined now by george grace esquire he founded g grayson company in nineteen ninety five. He has over twenty five years of experience in commercial real estate. He represents many non-profits and companies in their real estate transactions. Georges with mito help me with the first segment of learning office at least lessons. George grace, welcome to the show. Good morning. Good afternoon, tony. Pleasure to have you. It is afternoon. George has been drinking, but his seems cogent and i’m sure he’ll get through this segment just fine. Plus, we have a break in a few minutes. George. Why do non-profits usually need to examine a new space? What? What? What? What leads them, tio that several reasons first. Firstly, there you have a least that’s expiring, so that at least has to either be re negotiated or they have to move. Secondly, they’re growing rapidly and they need to get at the space. Doesn’t work for the moment anymore that it’s too small so they need more space. Or thirdly, they’re shrinking and this base is too big. And they’re paying a lot of money for space that they’re not. Using okay, those air, typical reasons, right? Hopefully not shrinking, but i imagine you’ve seen more of that now than you had say two years ago. Well, profits reducing, you know, it’s, i’ve seen a lot of a lot of the non-profits that i’ve worked with recently actually have expanded because there’s an opportunity in the marketplace because the rents have come way down so they see an opportunity to expand get a bigger front print. The tendency was non-profits as if we have the space, they’ll fill it with a use. Eso for a lot of the small, i would say the smarter non-profits are going out and trying to expand now, because now is the time to get cheap space. Okay. Oh, excellent. All right, now, your advice is that you you have to be willing to leave the space that urine so let’s, talk a little about your strategy. What? Why is that? Well, whether you’re going to renew the lease or your intention is to move from where you are, you have to go through the same process if you want to stay in the space. You you you were in and you want to re negotiate the least with the landlord. In order to best do that, you have to go out into the marketplace, find other alternatives that you’re willing to move. Teo, that is the key, and then use that as leverage against your present landlord and say to him, basically, if you don’t give me a great deal moving across the street because the landlord across the street is building’s half empty and is dying to have me and he’s doing all this, giving me all these concessions and benefits. So either you lower the rent or we’re moving. Okay, excellent. So definitely develop alternatives to where you are and then use those as leverage. Like you said. Now we have two attorneys on the show today, so i’m very conscious of jargon jail hold onto your wallet. Plus, we’ve locked up the valuables. Sam did that before you guys got here, so okay, a landlord now by landlord. You mean a building owner? Is that right? Correct. Okay. Let’s distinguish that from a non-profit that might be looking to rent from an existing tenant. That will make them a subtenant of sub lease. Okay, go ahead. Is the strategy while lester is the strategy different if you’re talking to a landlord, which is the owner versus talking to and negotiating with an existing tenant that you’re going to sub let from yes, ok as well, because there’s two things the tenant that sub leasing space has a different set of incentives than the owner does the owner is, has his incentives or her incentives is to make sure that their buildings full that they have that they have long term leases, preferably so they can re finance the property because one of the many owners and every owners have different incentives, but the mainstream usually wants to get their buildings full. They re finance the building and then take out money tax free. We’ll talk about that refinancing so in a few minutes as an incentive. But that’s the owner that’s the owner’s incentive, the tenant that subleasing has a lease which has a certain term certain number of years. It’s not forever, like the owner owns it forever. The tenant only owns it for two years or five years or ten years, so that he has a wasting asset. A longer term lease has more value for a tenant sub. Leasing it than a short term if you only have a year left on your lease who who wants to move in for just a year and then not know if beyond that year they can stay. So the value of that is diminished. That’s that what you mean by a wasting asset? Yes, the shorter the asset, the shorter of the length of the term, the less value that least has ok. So as as an organisation, or any as any tenants turned out to be an organization and any tenant as the least starts tio come toward its end, they get anxious about getting someone in there because they know that the shorter there time period that they have left, the less desirable that least becomes for other people to move in. Yes, and so they’re in a position to be much more flexible in terms of their rent. You know, the short of the least term is if they have ten if they’re subleasing for nine years, for example, than you know, that’s virtually like being a landlord. So there it’s, not as it’s still a fairly good asset, right? But one year well, and they’re not. Using this space well, well, sublease it for whatever we can get there, desperate to get seldman found money. This is the kind of detail we’re going to be talking about. We’re talking about learning office, least lessons with george grace of g grayson company. We take a break and stay with us. You didn’t think that shooting getting thinking, you’re listening to the talking alternate network. E-giving. Duitz good. Are you stuck in your business or career, trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. Bonem hi, this is psychic medium. Betsy cohen, host of the show. The power of intuition. Join me at talking alternative dot com mondays at eleven a. M call in for a free psychic readings. Learn how to tune into your intuition, to feel better and to create your optimum life. I’m here to guide you and to assist you in creating life that you deserve. Listen every monday at eleven a, m on talking alternative dot com. Are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics, politically expressed, i and montgomery taylor and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com talking alternative radio twenty four hours a day. Welcome back to the show. We’re talking about learning office, least lessons with george grace george before the before the break you were talking about having to be willing to leave, even if you really maybe don’t want to leave. So are we talking about bluffing? You’re the place where you currently are. Is that fair or no? You can consider it a bluff if your true intention is never to walk out the door but too, if you’re really wanna press the rents down, you have to be willing to walk the stronger you are in that position. If you really are willing it’s, very easy. If you’re bluffing. It’s there’s always a tension and you have to cause the landlord may say, you know what? Go, go they call your bluff. So so you you know that’s a gamble and you have to do it very strategically. I’ll give you one example. One time we were looking, the landlord had come in to visit to tenant and the tenant blurts algal, we want to stay. We have no intention of leaving that is giving your negotiating position away. Sort of revealed your cards. Yes, that cost him thousands. Of dollars. So so to generate these alternatives, you know, the first step, i guess, is to figure out what you need. Is that right? Yes. You know, let’s talk about that. How do you how do you figure that out? Well, there’s the number of there’s a variety of variables they have to look at the first one is how many square feet, too? You need that’s the first one that everybody looks at and everybody has sort of a, you know, a basic understanding of how many square feet they need or think they need, but that’s one variable of many. Okay, depending on what the uses of this straight office used. That’s. One thing, if you have specialized clients that come in that need, you know, certain access after hours, if you mean the handicap access handicap access. If you work twenty four seven, you want to be in a building that provides twenty four seven of air conditioning and access? If, ah so they’re abroad. If if you want, you may want a lot of security because you’re handling money. So you want to make sure the building is secure. There’s a lot of other aspects. In the operation of the building that will affect your organization. So you want to make sure that the building can accommodate what you’re doing, sort of the technical specifications of what you’re doing have to be met before you even look at the cost, because if you can’t operate in the building there’s no sense in making an offer, the price is irrelevant. You can’t operate, so the first thing you want to do is an organization is defined, what you need and what the critical elements of your space are that are absolutely necessary in order for you to operate. Then you go out into the marketplace and see what’s available that meet those criteria, okay, since the first thing that people think of and clearly not should not be the last thing, but since the first is the square footage, is there a way of determining how much square footage we need? Well, a good rule of thumb that that i use is usually around two hundred square feet per person. Now that rule of thumb is actually coming down a little bit because people are using space much more efficiently. You don’t see everybody getting officers. The cubicles, instead of being eight by six cubicles, are now five by six cubine cubicles so people and sometimes they go to desk space instead of actual cubicles, which makes it a four by four is space for person, so but as a general rule, you’re not going to be wrong. By using two hundred, you’ll have plenty of space now. You may whittle that down to one hundred fifty or hundred seventy five per person because you have to also take into account you have common areas, you have circulation space, you have bathrooms, you have conference rooms, kitchen’s oppcoll that adds into that number, and one of the things that you mentioned is the population that the non-profit might be serving, they may have special needs. They also might be a special population that a building might find that they don’t really want that population for whatever reason, coming through the building during regular hours, something like that of a great example of that. I represented a day school here in manhattan, and they have kids, kindergarten age kids and younger coming in in baby carriages. Most buildings are horrified when i told them they didn’t want that population in there at all, even though they’re not offensive in any way, rather cute at times, but we had to find a building that actually could accommodate them, and it was few and far between the other. They had also another requirement that they needed open space. Try getting open space in manhattan, but that’s a requirement of the law in new york state for a day school? Well, i found them a building with the roof three story building with a wide open roof that they converted into a school yard. So but that’s the type of thing where it was a needle in a haystack, how many buildings would they would allow that, you know, a hundred children into the building and have rooftop space for them? Very unusual, but those of the oppcoll requirements that they had to operate, and unless they had them, they couldn’t go into the building. Makes no sense, as you said, makes no sense to explore space that doesn’t meet your basic right basic needs. I think lawyers would be another undesirable population if you had a lot of lawyers on your staff that that could be good work against you as a potential tenants, you know, you can be helpful. Sometimes lawyers. Lawyers are always safe target. Especially when you’re arrested. You can almost never get in trouble making fun of lawyers i’ve learned onstage. Okay, so so now that you’ve got your you got your needs defined? Yes, but of course, lawyers could be enormously helpful. Like you and robert smith are today. Even defined your needs. Now you go out and look for it, right? Yes. Ok. How do you find the spaces? The spaces and the buildings that meet your needs? Well, what typically happens is if i mean an executive director of an organization, they’ll say, well, we need fifteen thousand square feet and i said, well, how do you know that? Well, i i know it’s. Fifteen thousand square feet. You know, let’s, go look at some spaces and that’s. The first reaction. They people want to get a visceral reaction. They want to see that you want to see and touch stuff. You know, before you start going into the numbers about do you really need that money? Square feet? And what is what kind of air conditioning are you looking for? How? You operating? No one’s interested in the details in the beginning, i want to get out. They wantto look, they want to walk around, they want to get out of the office. They want to see stuff and it actually serves a purpose even though it’s, in some sense, is a waste of time because they don’t know what they want, you know, you know, while you look at things, if you don’t know what you really want but it does serve a purpose in the sense that they get a sense of the type of space they like. They like loft space. They like normal office space with drop ceilings, you know, dark space, sometimes companies like dark space because they’re using computers all the time. I went into a space that these wonderful window line there, all the shades were drawn and why? Because they’re computer programmers, the light was anathema to him, so but people want to go see and they want to get a feel for the space. And once you go through that, you do learn a lot. You find out what they like, what they don’t like. What type of lobbies air good you. Know buy-in various factors that are they could not articulate that they are they they do articulate in their expression when they see something ok, and for me, that’s a hugely valuable amount of information that i get and then i go back and sit down with them and say, what do you really need? And then at that point, we can really refine our search. Now we have in a sense of the type of building they want, the amount of light they like neighborhood can also be important neighborhood, and that doesn’t only apply in new york, new york city, but what part of the city you want to be in could be very important where your employees coming from, where the people you’re serving, coming from right neighborhood yep, neighborhoods a big factor, and especially to when you’re negotiating rents because some neighborhoods and more expensive than others. So tenants well, you know, may want to stay in the area there in that they’ve been in and fifty years, but that area now is the most expensive area in the city, and they can’t afford to stay in that, so now they really are forced to look. At other areas, and it also helps in the negotiation. You want an alternative, you get noel turner that you’re willing to go to in a less expensive area. That’s big leverage to use against your current landlord. Okay, so how do we then get to the state where we start making offers so that we can get these bonified alternatives? Tio tio use in our negotiation with where we are? Well, so we’ve looked at a bunch of spaces. We make sure that they meet the technical requirements of the tenant of the organization latto we then look at the financial aspects of the of of each transaction because at the end of the day, it’s the money decision. That is the last decision that is made. So you have five or six spaces that work on a technical level. You you can either do one of two ways you can make offers to each landlord, including your own. Or you can ask for you, khun send each owner and or if pia request for proposal and have them making offer to you. Okay, that’s interesting, but that probably only applies to organizations that might be looking for a certain minimum spacer. If you’re just looking for a couple of thousand square feet, the odds of you successfully delivering a request for proposals to her landlord are pretty slim. Well, you could deliver them, but the odds of getting a response quite slim. There’s a couple of factors that go into that one is how much space if you’re taking two hundred thousand square feet perfectly every every landlord wants you, they’ll stand on their heads. The answer on our fifty okay in a soft market, you can also even if you’re a small, our tenant, you can also ask for nora pee in a tight market. Unlikely you have to make offers. You have to get the landlord’s attention when you say smaller let’s say smaller in what is a soft market in a lot of places now would that include, like, say, ten to fifteen thousand square? Yeah, i would say that’s anything under ten, you would probably make an offer, but ten and over you, khun certainly it’s not embarrassing. Tio have ah, haven’t landlord respond to a north pick and then so that our f p lays out what your requirements are and how the and then it’s, just the reverse of an offer to offer your putting it. I’ll pay you twenty dollars a square foot and rent in the r p you’re saying, what will the rent be for all of the things we’re requesting, you know, ten thousand square feet on the fourth floor, you know, in the southwest quadrant of the building, you specify exactly what you want and the landlord rules respond to that. Okay, so i think this is a good point, whether we’re whether we’re doing the r f p or whether we’re making an offer, talk about some of these other variables that you can you can work with besides trying to negotiate the rent falik build outs is one, but there are a lot of what we call in the profession concessions so one is the landlord will build the space or the land will give you fifty dollars a square foot for you to build a space. They’ll give you free rent free rent, not just two, build a space, but after the space is built and you’re in the space and that free rent offsets your your expense expenses for architects from moving things. Like that because you could negotiate the period of free rein. How many months that’s going to last? Okay, there’s. A myriad of clauses in annalise, which i’m sure you’ll get to later. But you know, the electric claws can be done in a variety of ways. There are escalations that could be they could be measured. Okay jargon jail what’s an escalation. The landlord in the least, always has some sort of escalation factor that corresponds to the cost of operating the building. So, as the building operating expenses go up over time, the increase is usually passed on to the tenants. Okay, but we can negotiate whether it is. And so now it’s, the measuring how it’s measured. So they’re actually formulas then is that right there? Numerous formulas. Ok, ok. What is the mother? Let’s? Not go into the formulas? That’s. Mathematics. What are some of the other variables that we can be negotiating around? This is interesting. Well, there’s, a lot of you know, the certainly the rent is the major one who has the major impact. But electric escalations t eyes. Which is the construction? How? The construction was a stand for lieutenant installation ten. Installation building how the space is delivered. Is it delivered raw? Is it delivered? Partially finished? Is it delivered with bathrooms with air conditioning? All those things have to be negotiated. Really? So? So space doesn’t automatically come with bathrooms and cerini not necessarily necessarily. Okay. Interesting. Okay. And then if you have specific requirements that need to be built in, you have a vault that you want because you are you’re a lad. And you want plumbing for your sinks that also can be negotiated into the into the rent if acquired. Okay, we have just a couple minutes left. Let’s. Talk about working with a broker, a real estate broker and creating incentives for that person to work for you. First of all, who does a broker work for the law is that whoever pays you is the principal. And whoever receives the peyton payment is the agent. So the broker gets paid by the landlord. Okay, traditional that maybe something that now is that only makes bro hold on sec. Look that guy’s taking over the show. Does that make a thie the so i think people are not familiar with that. So a broker, who’s who’s. Spending time with you looking at space, they’re actually getting paid by the landlord or the owner of the building it’s like you if you’re buying a house that’s the same thing nice lady shows you the house ingratiates herself with you and makes you know you’re her best friend now she’s representing the seller it’s the same with the broker unless you hyre that broker to be your agent. And if you hire the that broker, you have a piece of paper that says, george grace is my exclusive broker, he represents us his fiduciary responsibilities does to us even though he’s getting paid by a third party. The law is that if you have a written document, it negates that the common law of principle agency okay, based on so we’re no longer than looking at who pays the broker. We’ve been looking at that piece of paper exactly, okay? And is that something that that non-profits looking for space should have it’s interesting non-profits are the more progressive groups? They because they want they want clarity, they want transparency, and they want incentives aligned with theirs better than even for-profit they tend to want tohave these relationships. And want them in writing and want their understanding. So it’s, clear to the executive director, is clear to the board so that they are getting the best information for them, for them to make the best decision. Okay, so they’re getting good information, and they could make a decision, property rights, that’s, something that non-profits should should look for and to ok, we have to stop there. George graces principle of g grace and company founded in nineteen ninety eight, this is our first segment of learning office, least lessons. George pleasure to have you on the show, thank you very much. Thank you for inviting me my pleasure. Stay with us after the break, it’s, tony’s, take two, and then we’ll continue learning office lease lessons with robert j smith and kate piela. Stay with me. You’re listening to the talking alternative network. Are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics politically expressed. I am montgomery taylor, and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com are you concerned about the future of your business for career? Would you like it all to just be better? Well, the way to do that is to better communication, and the best way to do that is training from the team at improving communications. This is larry sharp, host of the ivory tower radio program and director at improving communications. Does your office needs better leadership, customer service sales, or maybe better writing, are speaking skills. Could they be better at dealing with confrontation conflicts, touchy subjects all are covered here at improving communications. If you’re in the new york city area, stop by one of our public classes, or get your human resource is in touch with us. The website is improving communications, dot com, that’s, improving communications, dot com, improve your professional environment, be more effective, be happier, and make more money improving communications. That’s. The answer. Hey, all you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com welcome back time for tony’s, take two at roughly thirty two minutes after the hour little about my block this week. There’s a standup comedy video of mine from july i did a show at gotham comedy club on west twenty third street in manhattan in a couple months ago, and that video is on my block. E, m p g a d v dot com also want to remind you that we are media partners for the next-gen charity conference that’s on november seventeenth and eighteenth here in new york at the tribeca performing arts center. Some of the speakers are craig newmark, the founder of craigslist and craigconnects duitz and he’s been a guest on this show, rabbi shmuley boteach, america’s rabbi and also charles best, the leader of donors choose dot org’s that’s, just two of about fifteen or seventeen speakers that they have throughout the day on november seventeenth. And then there are other sessions on november eighteenth. I’ll be there interviewing speakers as they come off stage, and you’ll hear those interviews on the show afterwards. So the conferences november seventeenth and eighteenth. You can get information and get your tickets at next-gen charity dot. Com and that is tony’s take two for friday, september sixteenth. With me now is robert smith. Robert is a no attorney. Opened his law practice in nineteen ninety three. He has represented renters, buyers and sellers of commercial and residential properties. He’s, also an experienced real estate and commercial litigator with me, also is kate piela. Kate is executive director of dance new amsterdam, a contemporary dance organization in new york city. Kate robert welcome. Hi, tony. Welcome. Thank you. Thanks for having a pleasure to have you were continuing learning office. Least lessons. Now, robert has reviewed dancing or amsterdam’s. Lise and robert. There was something that you want to talk about in terms of when rent starts and we’re going to get to that shortly. Let’s. Just start a little bit with the least history. Maybe kate, if you wantto just a little bit about how this least came about. Well, initially dance new amsterdam was dance space center, and it was up uptown a little bit on broadway for fifty one broadway. And they needed a new lease because they’re at least was running out on the new place and they were invited down. Tto help! Participate in the revitalization of lower manhattan after nine eleven, and so that was the initial sort of of research that was going into this in the city was open to bringing non-profits and cultural organizations to help the revitalization and dna they they re branded, changed their name to dance new amsterdam for the air they were moving into. And we’re the first cultural organization to risk the move down into do you know, in the aftermath of what was going on down in lower manhattan? Okay, okay. And and they were moving into a public space? Yeah. Publicly owned building in that it is a city owned building it’s a sun building. And we’re going to talk a little about that because that has implications for for lease negotiations. So turning robert to you, one of the things you want to mention was in terms of when rent starts to be paid. What? What is what is the least say? And what can we learn from that? This goes actually duck tales with some of the things that george was talking about earlier when he mentioned that one of the things that can be discussed are either rent. Concessions or on allowance for a period of time that would permit the tenant too, do negotiations or renovations of the space. And while that was going on to have a forbearance of rancid, basically not be able to pay rent while that’s happening. So it’s essentially they take the space, they sign the lease. And then there was a period of free rent. And during that period of time, during that period of time, the tenant is doing the work too customised the space to build it out. And that is one of the things was happening here, the actually it seemed like and when i looked at the police and i know you mentioned this to you when you and i first discussed this, that it seems like a generous period of time that was given to dna for its buildout, they got sixteen months of free rent. Okay, that does sound like quite a long time. You’re in four months, right? Does butt thie issues that dna was facing at the beginning of its terms. I meant that as it turns out, it wasn’t long enough on. And i think that the importance one of the important lessons is to try to build in as much flexibility in terms of time to tie it in rather to an event to say ok, when we are done with our construction, part of which is coming from city funding. Okay. And here you have a city owned building also by that in rather than a specific period of time. So so you were in this public building. And this is where some of the implications of being in a publicly owned a city owned building are on dh. You had to get permits right on dh permission for the build outs. And that took a lot of time. Well, money renovate. Every organization has to get permits to build out. There was just some walls that we hit with the entrance because there’s so many students coming in the entrance to the building initially was a public public entrance to department of buildings on to eighty broadway. We ended up having to find another entrance in the building, which meant we had to expand theory, jinnah ll amount of space and redesign the the plan. Okay, so this all added to the time exactly and then getting new permits. Because you have to do it on the original design and then there i mean, there’s, yeah, there’s permitting, right and there’s always going to be something unanticipated in build outs and sounds like yours was extreme having to find a new entrance. And so robert that’s your point about trying not to negotiate a finite time? Because as it turns out, even sixteen months wasn’t enough time. It’s true. And i think that any time that you’re talking about build outs and as kate mentioned, when you have permits, anybody has to get permits when they’re making changes when they’re doing building the department of buildings is particularly overworked and overburdened, and they get tremendous number of requests and things that they have to look at. So, you know, you need to have an expediter you need to get things through it’s a time consuming process added to that is that for dna, their funding was also public funding. So i think any time that you have the city involved in multiple layers of a transaction, you have multiple opportunities for delay, even more than you would with other parties. What was that? What was the nature of that? Public funding city agency’s funding dancing came through numerous public and private, but we got it through the elected officials through h hud laura manhattan development corporation. So if you look at all these layers of public funding, there’s rules and regulations and reports that have to be followed procedures and reports filed and followed to get thes and this is adds to delay possibilities now, robert what’s the likelihood that, ah, landlord is going to agree to flexibility in terms of when the least payment start different circumstances will lead to different results in this particular instance. Great lawyer answer. Love that. No problem. We do what we can in in this particular instance, we had a situation where the space that dna was coming into had been vacant for many years. I think it was about ten years from what? What kate had mentioned. So you had a tenant coming in that had a better bargaining position than it might if it was coming into space that had been used for a period of time. Or if there was a lot of competition from other entities that were looking to move in here, dna is the only game. In town, they wanted to move into this space, the landlord in this case, the city or there was another entity that was in between the city and dna that was technically a tenant in subtenant situation, so dna had a lot of leverage, and i think given that it was in a better position to dictate some of the terms to the landlord, including the term about look, when we are going to start paying rent, when we’re going to be ready to start paying rent, if they didn’t have all of that advantage, i don’t think they would have been in as good a position and, you know, often that’s the case, and i think that’s again, going into some of things george was talking. There is the caveat to add to this whenever anybody gets public funding the use of that funds to rebuild or to renovate, or whatever you do with it is the life of the bond because you get bonds to get public funding, that government gets a bond to get the money, and they give it away to nonprofit organizations, and there was, and that agreement has between a b between the landlord. And the city, because it’s public funding in the agency that’s giving the funding. And so i think this points back to again public funding, publicly owned building and a commercial landlord in between, as with this whole process, so that complicated things, but it also makes it a little odd sometimes in trying to understand these covenants of what is the life of the bond and these sort of things, because things can be manipulated much easier within a system now, my correct you were you were going to be subletting this space. Is that right? Okay. And that robert, that has some implications, right? Because now we’re talking about we’re dealing with the tenant who has the lease, and not directly with the building owner that’s, true and again, that follows up on some of the things that george was talking about in terms of what the incentives are and what the considerations are it’s more of a concern, too, the overland lord, the owner of the building, and in this case that was the city of new york and ah so it’s more of a concern to that anthony than it is here to the the tenants so to speak, because this was a ten and subtenant situation. So they didn’t have the same direct level of incentive that the city did, but again, because the city owned the building. I think that was a consideration that had to be brought into play here. And i don’t really think it was as much as it might have at the time that the lease was initially discussed. Okay, we’re gonna take a break talking with kate piela and robert smith, continuing our discussion about learning ofthis least lessons to stay with us. Talking alternative radio twenty four hours a day. Are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping hunters. People be better business people. This is tony martignetti aptly named host of tony martignetti non-profit radio big non-profit ideas for the other ninety five percent technology fund-raising compliance, social media, small and medium non-profits have needs in all these areas. My guests are expert in all these areas and mohr. Tony martignetti non-profit radio friday’s one to two eastern on talking alternative broadcasting do you want to enhance your company’s web presence with an eye catching and unique website design? Would you like to incorporate professional video marketing a mobile marketing into your organization’s marketing campaign? Mission one on one media offers a unique marketing experience that will set you apart from your competitors, magnify your brand exposure and enhance your current marketing efforts. Their services include video production and editing, web design, graphic design photography, social media management and now introducing mobile marketing. Their motto is. We do whatever it takes to make our clients happy. Contact them today. Admission one one media dot com talking. Zoho welcome back to the show and your aptly named host, robert. We’re talking about some of the other variables that can be negotiated, whether by dancing the amsterdam or gender, generally besides just square footage and rent. What are some of the other variables that tenant khun b negotiating around? A lot of them revolve around liability issues? I think that in a number of instances, landlords will put provisions and leases that essentially try to passed through all liability to tenants. So as a for instance, always insisting the tenants have insurance and, you know, saying that if there is a requirement, for instance, and we discussed that if there are construction items that the landlord is required to undertake, either for reasons of statutory changes or insurance requirements, for instance, they have to put in sprinklers, they need compliance with the americans with disabilities act. There may be construction that goes with that, and the landlord is going to try to pass that through to the tenants to make the tenant liable to basically pay for the chillies. So so changes to the building structure can be passed through to the tenant. Even the tenants only will be there for five or ten years and but still, that could be a requirement in the least yes, and and i and i think that’s the kind of thing that again, at the beginning, you have to be able to step forward and say, no, this is something that you’re doing is a landlord and it’s for your benefit, and you’re required to do it. We don’t want to have to pay for that, okay, i see you nodding way actually act somewhat as a landlord of our own space. So if the h vac system breaks down that’s our responsibility to fix anything within our space, if something goes wrong, we have to manage it. The elevator is a different story, but that’s the one thing so he’s, right? You’re talking terms in your lease? Not not because you’re leasing, not because you’re subletting space to others, but within your linden our lease. You’re responsible for those things. Yeah. Okay. Now, robert what’s the likelihood that a that a building owner is goingto negotiate some of that away, you know, again, it goes back to the circumstances. And here, i think where you had a tenant with leverage coming. In you may again be in a better position at that point. The landlord is going to say, this is a benefit for everyone in the building. It’s not just, you know, for me as a landlord, yes, i’m being required to do it, but that means that your subject to that as well tenant and so i want you to take that on. So i think that’s a rough go in a lot of instances for attendant to be able to assert that. But i do think that it’s a point of negotiation and again depending upon the relative position of the parties is relative, you know, strength of their of their posture overall. That’s going to determine how likely a landlord is to give in on something like that, okay? And any one of these things that were talking about they all get put into the mix so that if you don’t don’t succeed in one variable, you might use that is okay. Well, if you’re not goingto relent on the past throughs of the required construction, then give us a break on this other thing, right? So what? What might be one of the other things sometimes. It’s insurance requirements insurance what’ll happen is that a landlord is gonna want tended to have ah, a certain amount of insurance to cover liability for property damage for personal injury damage. And it’s not always a reciprocal thing. And what i mean by that is that what happens if there’s damage in a space that’s caused by the landlords negligence with landlord is going to want to have the tenant essentially even take responsibility for that and try to absolve themselves of responsibility? Sometimes the landlord will say, any lie about any recovery that you can have can only be from us in our interest in this building. Normally a landlord’s interest in the building is going to be minimal. Okay? So now so they’re trying to limit their liability to their financial interests or their financial stake in the building. Well, correct, how does that? What does that mean? Well, what it means is that jargon, general jargon, prison state i don’t even know what that what were we talking about? You know, just you know, you’re not understanding tony that’s. Essentially what it means is that if if there is liability that could be assessed against the landlord and, you know, let’s say it’s a million dollars worth of liability, the landlord may only have a really ownership interest in the building that’s minimal because it has a mortgage, for instance, okay? And if it has a mortgage, then it doesn’t really have equity in the building, and it doesn’t have assets anywhere else. You as attendant want to be in a position to tell the landlord if something like that happens, we want to be insured as well. We want to be covered for a situation like that. We want you to have at least the same measure of insurance coverage that you’re insisting that we have on that space. Okay, so that’s, something that you can negotiate because otherwise and landlord, does something wrong? You go after the landlord? The landlord said, sorry, i don’t even have five cents to pay toward this. Good luck and, you know, you are essentially out of luck, and then you have to. Okay, did you have any insurance related issues around this lease? Well, it’s interesting because we’re in a building with multiple tenants and above us is the department of buildings and we just went through kind. Of a new issue of you’re laughing but it’s it’s fast, sadie it’s a laugh of pain. It is fifth floor had a leak in a pipe which came all the way down and pulled into our fourth floor. We’re on the second floor, so but it came all the way through the walls. We found the leak, but then it pulled at dna and then went down in dim o’dell’s. And then it started out that we were liable for that. But then when we did the research which we become responsible for its very interesting who’s responsible it’s like the last place that it came down it’s. Like what? We don’t care you it came from above. So then we have to do the research and go. But it came from you guys and they said, well, now you have to prove it it’s fascinating these how people passed things off and you have to be very careful and conscientious and it’s, time consuming and there’s damn dancing after them. Two vs models down below. Imagine they have quite a legal legal contingency contingent. They have a model lawyers. You have a mob of dancers and and young. People learning dance, and they’re not that dangerous. But the interesting thing, too, is that when you, when you see the leases that are produced, they’re probably going to be about seventy or seventy five pages long, there’s a lot that goes into them and there’s a lot that has to be reviewed and there’s a lot that can be missed and passed over. So it is imperative that from the first moment, when that least comes in, that every word in line is examined because every one of them could contain some type of klaus that’s going to imperil that tenant at some point in time, so it really requires diligence and vigilance to go through every every piece of it. Okay to that point, i think you really need to be intimately involved in a sense, with the process as the executive director and the board, because there are also paragraphs when i first because i didn’t sign this lease, i was i inherited all of this when i went through the least, i’ve found like paragraphs, which neutralised other paragraphs, which seemed to protect the organization, which i found really interesting dancing after them have ah, lise. Leasing specialist on attorney advising them, do you know i know you weren’t you weren’t running, we did and, you know, it’s a very complicated thing because we have thie over lise, and then the lease and deadlines to get the funding and deadlines to move into a new space and this whole really camaraderie about revitalisation of lower manhattan. So i think all of that sort of thing really like i can put the fear of god in a sense or the universe into some, you know, a group it’s like my head if we don’t do it right now and we don’t sign, we won’t get the money, and then we won’t have a life and, you know, it’s something that has to be taken very slowly and being very involved as an end, both lawyers have said, right and more rationally, maybe then some of the emotion that that could be could be swept up into it. Yeah, but yeah, exactly. But i think that this was a difficult time. It was very emotional for everyone. We have just about a minute left, robert there’s, something i want to talk about in terms of it. Not not. Not being even an obligation of an owner to provide water and electricity just in a minute left. Can you explain that and what we need to look out for? Well, sometimes there is, ah, clause that landlords will put in that says that they don’t even they’re not obligated to provide certain what you would consider to be basic services, and normally they do provide those services, but there may be times where, for some reason they’re interrupted and at that point, the landlord of saying, well, you know, sorry, we don’t have an obligation to provide it for you. And again, that’s one of those things where you say look, we can’t function if those things aren’t provided, your obligation is to provide certain basic services for us. You have to guarantee that you can’t tell us that you don’t have an obligation to do that. So that is something that has to be discussed right off the bat. It seems like it’s something that should be automatic. It’s not yeah, water, electricity, right lutely, we have to leave it there. Robert j smith opened his law practice in nineteen ninety three representing renters, buyers and sellers of commercial and residential properties. Robert, thank you very much for being on the show. Thanks for having me, tony appreciate pleasure. And kate piela is exactly the director of dance new amsterdam contemporary dance organization in new york city. Kate really? Thank you very much for sharing dnas sort of woeful story about about the least at least. Yeah, thank you very much. Well, thank you for having me. Pleasure. Thanks for sharing that story. And i want to thank your publicist, amber, for recommending the the idea of the show. This whole show was really pitch to me by ember, and i like the idea. I hope that you will be with me next week, when we will be talking about prospect research on women donors. The last of my interviews from fund-raising day two thousand eleven, samantha cohen, from the american civil liberties union will be with me to talk about finding information about women that is valuable but often hidden. And the second half of the show next week learning lobbying limits or legal contributors from san francisco, jean takagi and emily chan explain the limitations on lobbying for charities. We all know charities aren’t supposed to. Lobby. But what activities? Constant constitutent lobbying? Can you have a petition? Can you say things that events or in personal face to face meetings? What can’t you say they’ll break all these lobbying limitations down for us? You can keep up with what’s coming up on the show. Sign up for our email alerts on our facebook page, obviously, facebook dot com and then the name of this show did you like today’s show, please like us on the facebook page? You’ve been listening live, but you can also listen. Archive itunes you can subscribe listen on the device of your choice at any time, you’ll find us on itunes at non-profit radio dot net on twitter you can follow me i hope you were with us today. The hashtag is non-profit radio or you can follow me personally and i’m tweeting often about philanthropy and the show as well, and use that hashtag non-profit radio use it recklessly. The creative producer of tony martignetti non-profit radio is claire meyerhoff, our line producer and the owner of talking alternative broadcasting is sam liebowitz. Social media is by regina walton of organic social media. Regina has arrived back in the san francisco area. After driving cross country from new york, we miss you already, but fortunately, you’re going to stay with the show. This is tony martignetti, tony martignetti non-profit radio hope you’ll be with me next friday, one to two p m eastern on talking alternative broadcasting, always at talking alternative dot com. I think that’s a good ending. 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