A Quick Trip Down Memory Lane...
The Factory was extremely lucky to have found its original location, very small, and nearly unmaintained. We had no parking lot, and a barely any restroom. We also had leaks all over the ceiling, and no dock doors, just our own little entrance on the side of a larger building that was primarily filled with many more larger tenants supporting the property.
Trading Free Labor for Extra Space
Over the years we became very close with our landlords, and worked out some agreements to expand our park in exchange for skill trade type of services such as ongoing website development and hosting free of charge. We had also started helping the building's struggling K-12 charter school on a weekly basis by participating on their Board of Directors. This is the building largest tenant, and on the border of being shutting down. All of these combined, including extremely discounted rent in exchange for free additional labor of services, is the most significant reason that our park has survived at its larger size over the years, hence why we never fully built out the trail side. Here are some videos we filmed and created for the school for those who are interested in learning more about our neighbors at the school:
A Struggling Property In General
After the school shut down, the building became even more fragile. The fire marshall was also starting to enforce all of the fire code issues throughout the entire building, many of which were outside of our control such as number of exit doors. And then after the entire sale of the building suddenly hit us harder than anything, we started searching for a new location which now seems to be a never ending task. We have toured a few new properties since our last update earlier this summer, however there are still so many pieces that all have to line up for us to continue to operate. And aside from all the details and challenges from our last Property Search Update
, we are also now in a position where we are looking at fresh new market rates for any new location we explore renting. While bartering for discounted rent can work in some situations, is not exactly realistic or sustainable when looking for a new location. It was a blessing we had our park for as long as we did, we were extremely lucky, and in the right place at the right time. And for those who are wondering, from what has been reported The Factory's original location still sits completely empty since we moved out, along with our neighbors who were evicted as well. Something none of us may never fully understand why.
Memberships & Covering Rent Year Round
In February, we explored a new pricing structure that would incentivize members to support our facility year round, as it needs to be. The Factory collected roughly $25,000 pre-paid for the next 8 months from nearly all members. Annually, this would be about $37,500 that we have to work with if members stay committed year round, round up to $40,000 with extra open sessions in the winters. This was a ground breaking step for the future of our park to get everyone all on board together year round, and for the first time in nearly 10 years, we actually started covering our costs all year round, including summer when we normally lose 80% of our members.
Pre-Paid Membership Refunds
As we moved out on May 31st, half way through our pre-paid memberships, we decided that it would be best to put all memberships on hold and keep us all together during this remaining 4 month pre-paid membership period supporting our new move. After we move into our new location, all memberships would then continue. If we do not have our new location after 4 months, we would refund all pre-paid memberships. On October 1st, The Factory refunded about $12,500 in pre-paid memberships.
Understanding The Cost of Commercial Property
So now we have to look at re-funding our park, and figure out what we can realistically afford. We were very close to signing the deal in Roseville mentioned in the link above (Yes, the one where we paid $1,000+ in legal fees while they gave the property to someone else behind our back). The space was slightly smaller square footage than our existing park, and would have cost us around $80,000 annually, with another $20,000 annually for insurance & typical business operating costs. This adds up to roughly $100,000 in bills each year that our park would owe. Exploring a 10 year lease, to continue our next 10 years and not have to go through this situation again, we are now looking at a total agreement of $1,000,000 to be owed for re-starting up our new park.
This does not include paying anyone, or any salary, for any services for run or manage our facility, maintain our facility, new additional ramps, lumber, paint, additions, etc. And when this is signed with a personal guarantee, the person who signs our lease is now on the line for $1,000,000 personally outside of the performance of our park. In other words, all of your personal assets can be taken if the entire amount of rent agreed upon is not fully paid. Even with a 5 year lease, we still need to come up with half a million dollars.
This is where we need to be extremely careful and make sure we balance everything correctly by knowing what we can realistically & safely afford.
Ongoing Costs... Even With No Location
The best part, still, is that we do have a complete bike park all packed up in semi trailers waiting for our new home, however this does come with ongoing monthly costs even without an actual location. We have spent roughly $10,000 since May 31st keeping our park on life support with multiple trailer storage rentals and insurance. We are looking at ways to decrease these monthly costs as we are starting to get into our very first winter with no facility. This also includes exploring non-profit directions to expand our ways of additional funding. Either way, this project is going to take everyone all on board to make this happen again, and we would love for your thoughts...
Your feedback is very important. Is The Factory worth continuing? How can it be guaranteed to be fully funded year round, even in the summer? Do we go back to an extremely small strip of space like we had back around 2010? Is anything better than nothing at this point? Do we all start paying more to have a bigger park? What is your own indoor facility worth to you? Please continue filling out our survey and give us your thoughts as we work our way into 2020. As always, we need as much support as possible, and your feedback will be extremely helpful as we continue moving forward into 2020.