Benevolent landlord

This page has been archived. All information in this article is historical.

Similar in name to Benevolent dictatorship and Benevolent Dictator For Life. The idea is that a person buys a property, and rents it out to a group (like Skullspace) on intentionally favourable terms. Abreviated B.L.

For transparency reasons, it's a good idea to take a "trust, but verify" approach to B.L. situations and document the extent of the benevolence -- especially if folks are considering contributing volunteer labour to leasehold improvments or are concerned about the effects a future move or change to higher rents could have on the organization down the line.

Provided here is an analysis in ods and Media:Benevolent_landlord_inc.pdf of how things could of potentially looked at 283 Bannatyne (which didn't work out in the end). This analysis could be adapted for future spaces.

All numbers provided should be treated as wild guesses unless there is good reason to believe they are more solid.

Below is discussion of each point not included in spreadsheet file. (where the numbers are)

Rent

Rents for Skullspace and Protolab had been stated to be around $600/month. A Benevolent landlord might also get an equivilent space for thier personal or business use.

Vacancy allowance

Vacancy allowance would normally appear in the plan for a comercial property to reflect that they can't be kept rented all the time. 6% is a value that was obtained from an appraisal done on another downtime property. Perhaps this should be lower to reflect the special relationship between landlord and tennants here.

Property Taxes

Property taxes calculated by using City of Winnipeg 2011 asessed value plus estimated value increase due to improvements multiplied by the 2011 tax property tax rates for commercial property

Condo fees

Condo fees at 283 Bannatyne were stated to be $600/month, wouldn't apply to future properties that aren't a business condo

Interest / lost opportunity

Interest / lost opportunity reflects either the cost to the landlord of borrowing money to buy the property or lost opportunity if money had been invested elsewhere. Imagine this in terms of two extremes, a B.L. who uses thier own cash to buy a property outright and thus looses the opportunity to invest that amount elsewhere every year; if they sell they get thier original amount back (if property values hold). Or a B.L who borrows the entire property cost and only services the interest on 100% of the cost; the assumption being if they had to sell they'd get back the original amount (if property values hold).

Owner's insurance

Owner's insurance -- Not only would Skullspace have to buy insurance to cover its directors, protect the organization from liability for things that take place in the space, and also insure any Skullspace property kept inside, but the B.L. itself would have to buy insurance to cover their potential losses; e.g. loss of the structure due to fire, etc.. This number was taken from another exchange area building's annual insurance cost and adjusted proportional to the value assessed by the city.

Repairs and maitenence

A total guess. This is non-capital costs to keep the property and equipment functioning.

Depreciation

Loss of value on parts of the property and equipment; reflecting eventual need for replacement. 4% is the government of Canada Capital Cost Allowance amount allowed for tax purposes. An alternative depreciation model could look at all of the structural elements (walls, doors, beams, roof.. etc) and equipment that would need to be replaced at some point, it's replacement cost listed, and total life listed. You could find out the average amount per year.