Special Parish Meeting – Exploring Potential Uses of the St. Nicholas Building

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UPDATED! SUNDAY, SEPTEMBER 20, 7 P.M., via Zoom

On September 2, Dean Thomason sent an email to the cathedral community announcing that the Vestry has recently engaged a development consultant to assist us in exploring potential uses of the St. Nicholas building with a goal of advancing the cathedral’s mission and ministries. John Hoerster serves as the chair of a committee guiding this process. The text of the summary report is available below

On Sunday, September 20 at 7 p.m., Mr. Hoerster and Dean Thomason will share details of the process, plans for parish input along the way, and address questions folks may have at this early stage.

There will be time in this meeting for parishioners to ask questions about the process as well. It is important to note that this is an exploratory process, authorized by the Vestry, which will unfold across the fall, and the committee will provide periodic updates to the parish at key intervals. You may also email committee leaders using the special email address: stnicholas@saintmarks.org
Join the meeting Sunday night using the following link: https://us02web.zoom.us/j/81531162952

Exploration of Potential St. Nicholas Redevelopment

September 2020

Summary

Saint Mark’s Cathedral is receiving a generous gift this Fall by which it will become the sole owner of the St. Nicholas property that is north of the main cathedral building. As a result, Saint Mark’s is undertaking a process to explore how the property can best be used to further the cathedral’s mission and ministries after 2023, when the current subleases with Gage Academy of Art and Bright Water Waldorf Society expire.

St. Nicholas was acquired in 2003 with the vision of it serving as a Parish Life Center, and this vision of a Parish Life Center on the cathedral campus continues, although there are several challenges with St. Nicholas being the site. Working with Meriwether Advisors as a development consultant, Saint Mark’s is soliciting development ideas from the real estate developer community. To guide the process, the Vestry has convened a St. Nicholas Exploratory Committee with clergy, staff, and lay leader members. The Committee and the Vestry are committed to transparency in this process and will provide opportunities for input and feedback from parishioners before making any decisions about future development of the St. Nicholas site and the Parish Life Center. In making decisions, the central focus will be resourcing mission and ministry for Saint Mark’s, whether that happens by using the St. Nicholas property or by using proceeds from a St. Nicholas transaction for campus development and ministry support.
Background of Saint Mark’s Relationship with St. Nicholas

In January 2003 St. Mark’s Properties LLC acquired the St. Nicholas property from Cornish College of the Arts. The LLC has two members, Saint Mark’s and the Willow Trust. Based on their equity contributions, ownership interests were allocated 50.5% to Willow and 49.5% to Saint Mark’s. The LLC leased St. Nicholas to Saint Mark’s for 20 years at a rent of $1 per year, with the cathedral receiving all rental income and being responsible for the property’s expenses and maintenance. In turn, Saint Mark’s subleased space to Gage Academy of Art and to the Bright Water Waldorf Society. The sublease income has been used to benefit the St. Nicholas property, including maintenance, improvements, and debt reduction. These subleases expire at the end of 2023, and before considering possible renewal, the cathedral seeks to explore all potential uses for the St. Nicholas property.

While Willow and Saint Mark’s recognized the need for these subleases, the ultimate goal for acquiring the St. Nicholas site was “to promote the vision, mission, strategic plan and charitable purposes” of Saint Mark’s. And, it was anticipated that, once it was financially feasible, the St. Nicholas Building would become a Parish Life Center.

St. Nicholas Gift

It was only because of Willow’s exceptional generosity that the LLC was able to acquire the St. Nicholas property in 2003. Now, Willow has compounded its generosity by gifting its 50.5% interest to Saint Mark’s. This extraordinary gift will be celebrated later this year, with the members of Willow being revealed so the cathedral community can express heartfelt gratitude for this extraordinary gift.

Future Development of St. Nicholas

Because Saint Mark’s will soon be the sole owner of the St. Nicholas property and the Gage and Bright Water current subleases are ending in 2023, it is time to address future development. How can this extraordinary gift by the Willow Trust best be used to further the cathedral’s mission and ministry after 2023? At a minimum, the structure needs a new roof, seismic and mechanical upgrades, better accessibility, plus general remodeling, which would necessitate a multi-million-dollar capital campaign. This leads to the question of whether it might be better to develop the site in a way that would provide capital to support Saint Mark’s mission and ministry, including providing funding for a Parish Life Center in a different location on the Saint Mark’s campus.

Engagement of Meriwether Advisors to Explore Development Potential of St. Nicholas

To help answer this question, Saint Mark’s recently engaged Meriwether Advisors to provide a strategic site assessment of St. Nicholas. Working with a land use lawyer and an architect, Meriwether addressed such topics as the applicable zoning code, market overview, site suitability and valuation, and potential transaction structures. Meriwether concluded that the highest and best economic value of the St. Nicholas site would be for multi-family residences and that it was reasonable to expect that the return from such a development would be sufficient to fund a new Parish Life Center and support cathedral ministries and the cathedral buildings and grounds. It is important to note that this conclusion has not been market-tested, no decisions have been made, and there will be a transparent process for parish input. Next steps include gathering more information concerning potential other uses.

At its August 25, 2020 meeting, the Vestry engaged Meriwether Advisors to serve as agent/advisor in a process to assess interest from the development community in other potential uses of the St. Nicholas site. On the cathedral’s behalf, Meriwether will solicit and evaluate potential development partners, utilizing a competitive marketing process. This will begin with a widely circulated Request for Interest from the development community, with responses due from developers in mid-October.

Statement of Saint Mark’s Goals and Objectives

The Request for Interest identifies the following objectives and goals of Saint Mark’s:

  • Further the Cathedral’s Missional Purposes: A primary motivation for considering redevelopment of the St. Nicholas site is to provide capital to support Saint Mark’s mission and ministry, including a new Parish Life Center. Saint Mark’s will also view positively incorporation of a mission-driven purpose, either within the St. Nicholas site or elsewhere on the campus of Saint Mark’s.
  • Campus Integration of Buildings to include a new Parish Life Center: The overall development of the Saint Mark’s campus will eventually include a Parish Life Center, integrated with the main cathedral building, that includes new office space, meeting and gathering rooms for ministry groups, and a parish hall with multipurpose seating and meeting space for several hundred persons. It is not anticipated that the developer would build this new facility, but the developer would need to demonstrate that there is a viable and economically feasible location for the Parish Life Center, whether that be within the St. Nicholas site, the south upper parking lot, or elsewhere on campus.
  • Endow Ministries: With any redevelopment scenario, Saint Mark’s will look to reserve funds to endow ministries and the cathedral buildings and grounds.
  • Avoid Cost of Upgrades to St. Nicholas Building: Use of the St. Nicholas building as a Parish Life Center would require incurring significant costs for new roofing, mechanical upgrades, and seismic retrofits and for reconfiguring the space for parish use. Saint Mark’s wishes to avoid these costs.
  • Creative Possibilities: While the Request for Interest focuses on the St. Nicholas site, Saint Mark’s is open to considering development possibilities elsewhere on its campus, especially on the parking lot to the south and southwest of the cathedral building, but probably not including high-end housing. And, despite Meriwether’s assessment that the highest and best economic value of St. Nicholas is multi-family residential, the RFI invites developers to express interest in other uses of the site, including schools, offices, and apartments.
  • Cultural Fit: Establish a partnership with a developer that shares similar values and culture with Saint Mark’s, including a demonstrated commitment to environmental stewardship and a long-term commitment to the community.

 

St. Nicholas Exploratory Committee

To guide this process, the Vestry has appointed a St. Nicholas Exploratory Committee comprised of John Hoerster, Chancellor Emeritus (Committee Chair); The Very Rev. Steven Thomason, Dean and Rector; James Pannell, Director of Operations; Senior Warden Julia Logan; Junior Wardens Walter Stuteville and Peter McClung; and lay leaders Maria Coldwell, Roberta Nestaas, and Nikisha Reyes-Grange. Chancellor Re Knack and Treasurer Phil Lloyd are serving as advisors to the Committee, as is parishioner Gerry Johnson, Managing Partner of Pacifica Law Group, whose law practice focuses on major community building projects.

Parish Input

The Exploratory Committee and Vestry are committed to a transparent process with ample opportunities for input. Together with other opportunities, there will be two key parish/Exploratory Committee meetings: a meeting on September 20 to provide information and answer questions about this project; and, at the time of the “Summit Meeting,” a briefing about the results of the “Request for Interest” process coupled with a solicitation of input about whether to proceed toward a possible transaction. There also will be opportunities for input and visioning about the Parish Life Center and how best to advance the cathedral’s mission and ministries.

If you have questions or comments at any time, please contact Dean Thomason (sthomason@saintmarks.org) or John Hoerster (john.hoerster@foster.com).

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