Vacant bank building donation gives nonprofits room to grow

Noel S. Halvorsen, Executive Director, NeighborWorks Green Bay

Challenge: When a big regional bank moved one of its departments to another site, it left a sprawling office building in downtown Green Bay, WI. Meanwhile, two leading nonprofits needed new offices, either because their leases were expiring or their locations were no longer adequate.



When Associated Bank, a regional banking leader, consolidated its various corporate offices into a single centralized location, it left a 15,000 square-foot building in downtown Green Bay, Wisconsin. Two leading area non-profit organizations, Brown County United Way and the Girl Scouts of the Northwestern Great Lakes, needed new office facilities, either because their current leases were expiring or their locations were no longer meeting their needs. Gail McNutt, the CEO of the Girl Scouts chapter, had long advocated for a collaborative nonprofit center in the community. A collective center for nonprofits can provide greater opportunities for collaborations with the other tenants and the community they serve. The vacated building in the government and corporate core of the city could deepen vital connections with officials and business leaders.

In 2013, McNutt initiated discussions with Associated Bank and United Way about the leasing space in the facility. Associated Bank decided to donate the building and chose NeighborWorks Green Bay (NWGB) as the recipient because of its nonprofit status and expertise in real estate development and management. The property deeded to NWGB in 2014 was the single largest donation we have ever received. Though we were not part of the initial discussions about the donation, clearly our strong, consistent community networking made us the best candidate.

Once on board, NWGB needed to work fast to bring make the building ready for its new tenants. We also needed to find a way to accommodate rules about donations, how to make leases affordable for the tenants and to maximize the donor’s benefit. Of course, we also had to do this without losing money.

We created a so-called open book lease. All building tenants pay a pro-rata share of operating expenses and reserve contributions based on their portion of occupancy. NWGB adds an annual administrative fee to the cost. As expenses fluctuate, so does the rent. Each year, the tenants write a letter to the bank noting how much they are saving versus market rents thanks to its generous gift.
NeighborWorks Green Bay executed seven-year leases with the United Way and the Girl Scouts. Two other agencies, the First Tee (a golf-oriented youth development program) and the Bay Area Community Council (a nonprofit think tank) are also tenants. The tenants are saving thousands in rent, and NWGB doubled its commercial real estate holdings. We also have our name on a high-quality office building in the heart of the city.

The impact of the Associated Bank-NeighborWorks Green Bay Collaborative Center can perhaps best be described by the leaders of the organizations that occupy the building. McNutt said the new offices were a windfall for the Girl Scouts. “Not only does it improve our operating efficiencies, but more importantly, it brings us to a highly visible, central location in our community.”

In addition to providing offices for the nonprofits, it also includes retail space where Girl Scouts and their and leaders can buy uniforms, badges and other supplies. “I love popping into the Green Bay scout store and offices. There is something about the buzz downtown that makes the visit seem more important than just a stop for a badge in a mini-mall. The tree-lined streets afford shaded parking, and stepping up the stairs to the front door speak of a bygone era,” says Trudi Wojtylaa, a parent and Girl Scout leader says.

The collective created many hurdles for NWGB. It took us longer to establish the routine of the annual rent adjustments relative to actual expenses than we anticipated. Also, one of the sites remains vacant, complicating the cost-sharing system for existing tenants.
 
But in addition to the boost in real estate holdings and visibility, NWGB has also benefited from the greater leadership role the donation provided, both with other non-profit organizations and the downtown business community.
 
The experience was also enriched by the wisdom that NWBG gained. We learned the value of continuously networking with other nonprofits and businesses, the importance of clear communication with donors about their expectations and acknowledging their generosity and learning how to effectively and affordably managing a multi-tenant office building.