Financing and Fundraising (7)
Eestlased Kanadas | 04 Nov 2018  | EWR OnlineEWR
The Madison project is ambitious, involving many volunteers, dealing with a myriad of issues, working tirelessly to fulfill all that is required. It’s no easy task. Regardless of anyone’s personal position, everyone involved should be shown appreciation for their dedication and attention to a complicated and challenging endeavor. In the same vein, anyone with a differing opinion swayed by emotional attachment, an aversion to dramatic change or an assessment of the circumstances as they see them, should have the ability to consider options and possible outcomes.

The Estonian Centre Due Diligence Report yielded many insights into the financial and funding picture of the project. As proposed, the sale of Estonian House is projected to provide significant funding, whether the sale can represent a majority (over 50%) of the project budget has yet to be determined. The report states that: “The Broadview land assembly sale price is on a sliding scale that ranges from $11M to $15M”. (p.3) If the project budget remains at $25 Million and the sliding valuation scale enables Revera to purchase the Broadview property for $11 Million, then there will be a greater reliance on donation funding and debt financing. Currently it is forecasted that Tartu College, Estonian Credit Union, and Estonian Foundation of Canada will come together to provide $5 Million in debt financing. The remaining $8-9 Million will come from donor funding.

During the summer, a lead donor was identified. However, the sizeable and generous pledge had conditions that had failed to be satisfied by the time the due diligence report went to print. The report notes: “Non-binding arrangements representing $3 million have been executed with the lead Donor. Building naming rights will be granted to this Donor. Of this donation, $2 million is dependent on matching funds from other donors of which $1 million is near committed.” (p. 12) If the lead donor’s conditions are met, then Madison will have benefitted from $5 Million in charitable donations. That would still leave another $3-4 Million in donations to be raised if there are no more budget increases. However, the longer those donation commitments remain unfulfilled, there could be greater exposure to cost increases.

Proceeds from the sale of Broadview, debt financing from the 3 Orgs and $8-9 Million in donations make up Madison’s financing and funding. In developing a possible contingency, Tulge’s model considered the various financing and funding mechanisms to try and achieve as expansive and diverse a set of sources as possible. The proposed Tulge design is respective of budget. It is extensively scalable. The final build size will reflect the amount of financing and funding that is achieved.

The amount of capital current and new shareholders may be willing to invest, how much government grant funding can be generated, how much may be donated and how much can be financed based on the diverse revenue models the House can support will determine the building’s scale. Tulge’s proposed design and programming is intended to enable access to government grants, financing and favourable tax credits. True to Estonian “talguliste” spirit, Tulge’s capital campaign will not be focused exclusively on cash donations. Our community has the benefit of architects, engineers, builders, project managers and other professionals that can contribute valuable in-kind services, materials and labour to the cause. We are also encouraging Estonian firms to provide expertise and products to ensure that our new House reflects and promotes the best and most valued parts of our heritage. Estonians otherwise excluded from contributing will be able to participate in whatever fashion best maximizes benefits to our Estonian-Canadian community and organizations.

Purchasing the Madison site is a prudent investment for the 3 Orgs even if the sale to Revera is not finalized since it compliments existing Estonian enterprises. Should Revera walk away and Tulge can generate investment interest, government grant funding, tax credits as well as other outside debt and in-kind financing, our community could realize untapped economic benefits at the Broadview site that have yet to be realized.


The Tulge Külla Steering Committee

Related:
https://www.eesti.ca/what-if-r...
https://www.eesti.ca/why-plan-...
https://www.eesti.ca/revenue-a...

 

Viimased kommentaarid

Kommentaarid on kirjutatud EWR lugejate poolt. Nende sisu ei pruugi ühtida EWR toimetuse seisukohtadega.
:06 Nov 2018 07:01
Tulge is not alternative to Madison, it is a Plan B if Revera walks.

Considering that took 4Orgs substantial financial resources (more than 1 mln?) to come up with sub standard "Due Diligence" and considering that it took 16 months for 4 Orgs to complete (6 months more than the self imposed deadline), I say Tulge is doing pretty good in comparison.
No right answer!05 Nov 2018 23:01
While the "Tulge" alternative is by all counts an unsubstantiated, unproven, high-cost, unaffordable, infeasible option, it is also sad that the Madison project is set to dramatically alter the long-term viability of one Four Pillar organization. Sad for everyone, forever!

http://eestielu.com/et/arvamus...
An Observer05 Nov 2018 17:28
The Tulge initiative purports to be a contingency plan, should the Madison project not succeed. However, I find it truly bothersome that the common thread that runs through the series of Tulge articles is the casting of doubt about the viability of the Madison project. From what I have read in the Esto paper, there has been a considerable commitment of manpower (both volunteer and paid) and financial resources to the initiative. With the multiple failed initiatives (condo developments on the Broadview site), this is the closest we have been. We should be supporting it, and not undermining it. Yes there are risks, but these will be found with any undertaking. And it's all about managing them. Let's pull together to have it succeed. Our community is small.

Loe kõiki kommentaare (7)

Eestlased Kanadas