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Studio West Radio Interview with GayWaves

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Part 1 of 3:

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

Eric:
Our guest this week on gay waves are Jeremia Davenport, known also as Lady J.

Eric:
And Betsy Figgie, and they are on to talk about a project that could change the landscape a little bit. In Lakewood, Ohio, and in the Cleveland area that borders Lakewood, it is an interesting new development. And we’re going to let them describe it. But Lady J. And Betsy, welcome to Gay Waves.

Betsy:
Thank you very much for having us.

Lady J:
Yes, thank you, Eric. Betsy, you want to start and you want me to start. Why don’t you go ahead? OK. So we’re doing. So what the main three parts of this as far as the three buildings, the third sort of bringing the whole project starting right at the corner of Detroit and Hurt Avenue in Lakewood and going cross in across 117 to the apartments that are above my friend’s restaurant. So the apartment part of this, we’re going to be supporting the tenants, really supporting the tenants that are there now. But if those spaces turn over in the future, those are going to be used for LGBT senior housing, LGBT student housing and LGBT housing for people who are housing deficient. And then the next part of the project, the biggest footprint, I think, of the three parts is the repurposing of the Phantasy nightclub complex. So the Phantasy is going to. I’ve heard a lot of things said online and around town in the last couple of days. I think a lot of people misunderstand what’s happening. So the Phantasy, the building is going to be maintained and restored some but none of those kind of spaces or any of the spaces in there are going to be lost. That building will not be gone. It is not going to be gutted entirely. We’re really working really hard to restore, to restore like the old storefronts to their original places over time. On Detroit, we’re gonna be using some of the spaces, like really highlighting the spaces that highlight the history of the bands that have been in those, especially like the Phantasy nightclub and symposiums.

Eric:
Let me let me let me just stop you right there, because I think we’re going into a little different direction. I first met our audience needs to understand what exactly the project is. And Freshwater Cleveland did an article today. This is where I learned of this. It says, Welcome to the gayborhood. A hundred thousand square feet. LGBT is taking shape on the edge of Lakewood. And they said, let me take a stab at that.

Betsy:
Ok, so what do and I have done over the last six months is we’ve acquired three main parcels.

Betsy:
So as Lady J mentioned, the mixed use commercial development. Also, we’re in the closing process of the Phantasy theater. We also purchased some real estate just north of the S.A.C. on Herbert Avenue, which is currently a vacant refactoring facility that we’re going to try to stop in the field house. The idea is to create a neighborhood, an entire ecosystem, if you will, where people can come and they can live. So they can play, they can work. And we will have coworking space, student housing, pharmacy services, recreation, entertainment, sports, everything within this neighborhood. So it’s really a case study in massing, if you will, to provide in a very condensed area everything that you or somebody as a member of the LGBT community could ever want. And so that is the overarching plan is to create a very safe and welcoming space that’s awful to the LGBT community. But welcome to everyone. And overarching, all of the real estate is a foundation that we launched called West Won 17 Foundation. And part of this concept is we really believe that philanthropy is going to be the key to keeping everything affordable if we need to ask the foundation to subsidize some of the rents that Lady Jay was talking about, perhaps some LGBT student housing or even older LGBT hate couples that might need some help subsidizing rent, maybe some commercial build out expense for LGBT owned businesses that want to locate in the neighborhood. We want to make sure that every. Thing remains affordable and also true to the mission and the brand that we’re trying to accomplish. And to that end, Daniel and I are going to be where the developers. But we also see ourselves as the steward of this neighborhood and we’re going to be involved for the next 30 years. So it’s not a by rehab and flip situation. We’re investing our own money. We’re plowing all of the profits back into the neighborhood to make it bigger and better and more inclusive.

Eric:
So let me just stop you there, because Daniel is Daniel Budish, who is a developer also.

Eric:
And his his company is called Gaslamp Capital, which has actually done quite a few projects. Yes. He is also the son of county executive Armond Budish.

Betsy:
Correct. Daniel focuses primarily on historic tax credits. He does transactions all over the country, utilizing federal and state historic tax credits to bring buildings back to their old grandeur. And so the Phantasy project is right in his wheelhouse. We’re planning to have the building put on the National Register of Historic Places. And we’re using a historic conservationist to help us with that process. It all goes in to how we’re going to fund the projects with the idea being the more free money we can bring into the neighborhood for the project, the less debt we have to take on to make it affordable for any of the tenants or any of the operators within the space.

Eric:
Let me design it somewhere and let me just stop you there because. Because that begs a bunch of questions.

Betsy:
Sure, fire away.

Eric:
Umm you know a number of number of years ago, back in the day when I was a print reporter, I covered a similar project that was organized around a foundation that was going to create senior housing for the LGBT community.

Eric:
And it was a grant.

Eric:
I mean, there were several designs, most of them really, really grand.

Eric:
And and all of them, like yours, depended on your ability to raise foundation money in order to keep them affordable. Well, the reason why the project never got that grand, it actually is a much smaller piece of real estate now. In Cleveland, you know, 20 years later. But the reason why it never became the grand lakefront extravaganza that is that it was promised to be was that they couldn’t raise the money.

Betsy / Eric:
So the question so the various the of the equation is making sure that the developing cost is affordable.

Betsy:
And that’s really our expertise. That’s what Daniel and I do. Daniel focuses on historic tax credits. My expertise is with new markets, tax credits or other unusual forms of subsidy or low cost of capital debt. And so we’re looking to cover probably at least 50 percent of the cost of the project with free sources. What do you make of free sources? Free sources, meaning equity from the sale of historic tax credits, equity from the sale of new markets, tax credits, perhaps some tax increment financing, other grant sources that we’ll be able to pull into the project through perhaps the state capital budget. The list is pretty long and this is what we do, really. I still.

Eric:
So, so, so, so what what I’m hearing then is is is a lot of public money.

Eric:
You know, tax increment financing is a deal that basically goes against the the collection of property taxes on the on the property.

Betsy / Eric:
That’s correct. And I as a member of a school board, I hate those. Tell me back then.

Betsy:
But I do not school tests. Yeah. So, for instance, the one that Daniel and I did for Rick Faran on the astral building over on West 25th and Seymour Avenue. That was a non school test. So the school board is not the school district is not negatively impacted and that’s what we would do. Also with the city of Lake. I’m a firm believer in that, just as you are.

Eric:
Well. So not just not on schools.

Eric:
Yes. Yes. We can get into that discussion, too, because it it all affects schools. But that that isn’t the purpose of this interview. My my purpose here is to try to explain to our listeners how this because it’s also a fairly grand project.

Eric:
As it was described in the press and an end, it is dependent on on a lot of money that is not generated from inside the project itself.

Eric:
In other words, collecting rent and usage fees. This is this is dependent on a lot of money from other sources. That’s partially correct.

Betsy:
Ok. For instance, the building at eleven six hundred Detroit, where my friend’s restaurant is five commercial spaces and eight eventual apartments. It is fully leased, both commercial and residential. It’s cash flowing very well. Will my friends stay? Oh, yes. Yes. Daniel and I just sat down and had coffee with Tim Moss. And he is he’s a great restaurant operator, has tons of experience. Everybody loves my friends. Everybody loves them. It’s 24/7 and it’s great. And people are friendly and you can’t beat it. So, yes, they’re going to stay. And we’d love for all of the tenants to stay as they turn over. We might repurpose some of the castle spaces or the residential spaces for more LGBT centric businesses. But my point is that that building is really it’s self sufficient. So the cash flows from those tenants covers all of our operating expenses plus our debt service, and provides us some additional cash that we can then put into some of these other projects.

Eric:
The other other projects for the other projects, the other projects are not self-sustaining.

Betsy:
Well, so the Field House Project, which is just north of the Phantasy, we are working on an agreement with Watarrka. So he’s a liquid restaurant here that owns Buffo and also tacos and a number of other businesses. The way that we’re looking to structure that relationship would be in the form of a lease. So there would be guaranteed income coming into that building. The other portion of the building, which is the field house component, that would be more event driven and. Fees paid by different Redflex that want to use the space and rent out the states. So I’d say in that particular case happened how but by the way, that we’re looking to structure the transaction for the Fieldhouse project is to use perhaps a tool called an SBA Fargo for loan, where it’s only 50 percent bank debt, some guarantee debt from the SBA and then owner equity. The city of Lakewood also has a small business program where they provide some grant dollars in lieu of a portion of the bank debt that is forgiven. Once you had certain job creation metrics. So we’re looking at a lot of different ways to make it very affordable. And with some enhancements from the SBA, we’re gonna be able to get it done so that when I’m fully confident on we’re working with reconstruction, on the cost estimates and Marsan architects on the design and the guaranteed maximum price contract pricing. So that one’s coming together very well.

Eric:
How much is that project? How much is the project going to cost?

Betsy:
I’m estimating that the total construction costs would be about five million. And then you’d have to add on another half million dollars for site control and maybe a million dollars for sock costs like A and E and financing interest research, surveys, things like that. So six to seven.

Betsy:
And. That you want to talk about the CAC?

Eric:
Sure, why not?

Betsy:
Sure. So the purchase price of the Phantasy is approximately a million three. And Cleveland Development Advisors, which is the lending arm of the Greater Cleveland Partnership, is providing us an acquisition loan equal to 90 percent of that 90 percent. And it’s interest only for a year with a year extension. And some of that interest expense is deferred until the back end. So what CDI and the Greater Cleveland Partnership are doing for us is they’re giving us the runway that we need to do what we do, which is we put together these incredibly complex capital stacks to unearth every single opportunity for low cost of capital debt or for grant free money equity sources to bring into the project. Mean that’s the faith that they have in us. And, you know, we’re going to be using them. We’ll be using that. And we’re looking to close the first week of July on the CAC.

Eric:
So, OK.

Eric:
Just, you know, from from Freshwater Cleveland, they describe that as a fifty five thousand square foot entertainment complex. That’s correct.

Eric:
The former and I’ll just read it, the former live music venue Will How’s six entertainment destinations, as well as several ground floor retail spaces, a podcasting studio, correct. And a coworking space and vision hub for nightlife, drag shows, live music and other entertainment space will offer a much needed central spot for social interaction and activity, one the Budish says that Cleveland hasn’t had since Dallas since since Bounce closed in twenty seventeen.

Eric:
And I guess, I guess I, I again, you know my.

Eric:
I think, I think these things sound really cool and they sound really interesting.

Eric:
You know, bounce, bounce closed. Like a lot of LGBT.

Eric:
Entertainment venues and bars.

Eric:
Not just in Cleveland, but around the country have been closing at an alarming rate. I live in Canton and we just lost our last one.

Eric:
A couple months ago, we used to have eight.

Eric:
But that is a trend not just in this part of the world, but Halsted Street. The bars aren’t doing what they used to do, you know.

Eric:
Big cities like like New York are.

Lady J:
They’re not just right now.

Eric:
My point is

Lady J:
One of the reasons why a lot of these bars have failed. It is exactly what we are trying to counter from day one. Well, we just saw this week happen in Chicago was a very powerful white. We’d be held accountable by an entire city and number of cards, Bosco’s sidetrack. And about three others held accountable by the entire city for the fact these spaces have catered to this white gay men only for a very long time. And that is a big part of why this happened down the drain. They don’t as the community expanded our sense of our own identities and accepting that we have not seen a similar expansion in our experience of these stations. I’ve been performing in clubs for 10 years and I’ve watched a bunch. This is a lot of it is for that reason. And because many of the club owners have run these spaces like party palaces for themselves rather than as businesses. That is exactly why I am so glad to be working with that. See. And Emmanuel. Because for once, we have one who actually understands the business side of this and can get that done and allow us to clear the space and create the space for everyone to feel included from day one.

Betsy:
So you want to talk for a minute, lady, about the hiring committee, too?

Lady J:
Yeah. So part of that is going to be the hiring committee. So what we’re doing in order for to fill these spaces and make sure that we don’t end up with a bunch of places where systemd or white men are serving. And many times we hear complaints from black patrons, from trans patrons, from assistant to women who are patrons, that they are getting served 3rd or 4th, 7th or two hours late. We want to make sure those things never happen. And we want people to see themselves reflected in this space as soon as they walk in. So one of the things we’re doing is instead of us doing the hiring, we’re creating a process where we can kind of sidestep the implicit bias as we have by allowing our community leaders to be the people who do the hiring. So I’ve been working with people who are in the activist community, people who are in the nonprofit world, and people in the gragg world to form a hiring committee that is black, indigenous and people are inclusive. And that is going to be one of the keys to making this space really different. And I think that’s going to be one of the things that makes this probably the thing that makes this. Able to succeed in a way that many other spaces have not been able to as a trans performer, has been in them for 10 years.

Betsy:
I would also say that the fact that Virginia West has signed on to be the housemother is pretty spectacular. And, you know, she has a focus on mentoring and philanthropy. She’s raised millions of dollars for causes for the LGBT community and she’s excited. She posted these releases on her personal Web site and has been commenting on them today. I think it’s just a fantastic add to the team. And we can’t wait to get started working with her and her family.

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