As you may know, the Tahoe Sierra Board of Realtors and the Tahoe Sierra Multiple Listing Service, Inc. purchased 12315 Deerfield Drive in Truckee to serve as their new headquarters. As a lot of questions are being asked about the purchase, the Board of Directors of the TSBOR/TSMLS wanted to reach out to the membership to explain how and why they took on this endeavor.
About a year before the lease on the property at 1810 Squaw Valley Road was due to expire; the TSBOR/TSMLS Boards discussed whether to renegotiate the lease or to look for other options. There was concern about the longevity of staying in Squaw. Maintenance was becoming an issue and no longer having use of the classroom above the old fire department was becoming increasingly difficult. The Directors decided to form a Facilities Exploration Committee. Members included Kane Schaller, Sam Drury, Mike Lombardi, Bill Leeder, Brett Williams and Sue Ruane. The duty of the Facilities Exploration Committee was to find properties to purchase, lease or build that could fulfill the needs of the Board at a price that would be comparable or better than what we were paying for rent in Squaw. If no properties could be found, the committee would then have all the information they needed to renegotiate the Squaw Valley lease.
The needs of the Board included at least 3 offices (EVP, Membership and Reception/Other), a large conference room (TSBOR Directors meetings seat 16), adequate storage, a classroom that can seat 40+, and parking for 40+. A tall order for sure! The Committee looked at every option in our target area of Truckee to Tahoe City to Kings Beach and met several times to look at properties that might work. The task was proving difficult, nothing fit the bill. The committee then put out e-mails to the membership looking for pocket listings, and then we decided to expand outside our target area. The committee went to look at 12315 Deerfield Drive; it had been on the market for a while and was originally listed at $1,200,000 back in 2009. Now it was listed at $699,000, it had all the things on the wish list, and more. With a little over 6000 SF, the building had 9 units. We could use 6 for the Board and rent out three spaces for extra income. There were already 2 tenants in residence. There were some issues to consider, the building had not been maintained very well and would need some serious TLC. This would include a new roof, exterior sealing, interior remodeling, and there were drainage issues that would have to be addressed. While debating these issues, the building went into escrow. The Committee began to search again. A month later, 12315 Deerfield Drive fell out of escrow. Fast action would be required. The Committee brought the building before the TSBOR and TSMLS Directors, and it was agreed that it was too good an opportunity to pass up. Please note that Mike Lombardi, the Regional Manager for Coldwell Banker recused himself from any voting about the Deerfield property as Coldwell Banker had the listing on the property.
The TSBOR/TSMLS has always had the intent to purchase a building. At every lease negotiation, the purchase of a building has been brought to the table with the same outcome; the Directors could not come to an agreement. In 2007, the Strategic Planning Committee named the purchase of a building as a major goal, as most Realtor Associations in California own their properties. The TSBOR/TSMLS has been growing their reserves for some time with this intention to purchase or build. At this last lease renewal, the Directors came together to get this done on behalf of the membership. As you may, or may not know, the Tahoe Sierra Board of Realtors and Tahoe Sierra Multiple Listing Service, Inc. are 2 separate companies with their own memberships. Currently, the TSBOR has about 625 paying members including Affiliates. The TSMLS has about 740 paying members. We also have of about 100 non-paying members that consist of staff and unlicensed assistants. The TSBOR is a “not for profit” company. The TSMLS is a “for profit” company that consistently makes more money. That being said, the TSMLS had accumulated over 2½ years of reserve funds, and the TSBOR had over 1½ years of reserve funds. Ideally, the TSMLS should have 2 years reserve funds and the TSBOR should have 1 year of reserve funds. After consulting with our Accountant, it was decided that the TSBOR would own 40% of the new building and the TSMLS would own 60%. The reserve overages would be used for the down payment and the TSBOR and the TSMLS would split the cost of the mortgage 60/40. The TSBOR/TSMLS Directors elected to have our Attorney, Steve Lieberman broker the deal. The TSBOR/TSMLS offered $689,000 with 20% down. After the due diligence was done, the building closed in June for $641,525. The TSBOR and TSMLS would split the expense of the improvements 60/40 and would still have the required reserves intact. Our mortgage would be roughly $3000 per month, less than what it cost to rent the Squaw Valley office. The mortgage will also be offset by the rental income of the 3 units and Truckee Tour will be held in the new classroom alleviating that expense, as well.
Where are we now? The building closed escrow at the end of June 2014. From July through September, it was plans and permits. October 2014 through mid-January 2015, the exterior and interior remodeling was mostly done. The TSBOR/TSMLS offices were moved on January 15, 2015. We are currently getting settled in, and are still working on a few things. Due to the drainage issues, the parking lot will have to be tackled this Spring/Summer and there are a couple little things we still need to be done.
As a steadily growing membership organization, it was important to plan for future growth in a fiscally responsible way. The TSBOR/TSMLS Directors accomplished that feat. The new building features 4 offices, a large conference room (seats 16), a small conference room (seats 8), a storage room, a classroom for 40+ and a large parking lot. It also has a large sun deck with a view of Coldstream Creek, which is just a bonus.
A big thank you goes out to everyone involved in this purchase. It really took a meeting of the minds and a lot of time and effort from the volunteers that make up your leadership. A special thank you goes to Past President Kane Schaller for volunteering more than his fair share to this project. It would not have been possible without him. This June, we plan to have an open house for the membership and the community to tour the new facility.