- Understand site search readiness, including when the right time is to look for a property and what the organization can do to prepare.
- Become familiar with the process to acquire a publicly owned property, including conducting a site search, assessing the condition of properties/facilities, bidding on properties, and closing on an acquisition.
- Understand what needs to be accomplished after the site search when the organization transitions to the predevelopment phase of the project.
- Learn about how nonprofits who have worked with IFF have navigated challenges to successfully acquire and redevelop/renovate publicly owned properties.
Resources nonprofit leaders can use
IFF has helped more than 1,200 nonprofits create mission-driven facilities optimized for their needs, and we regularly share learnings we’ve accrued along the way. To access past content designed to provide nonprofit leaders with foundational knowledge needed to successfully complete facility projects, click here.
For nonprofits in need of a new facility better suited to support their work, the prospect of acquiring a publicly owned property can be extraordinarily appealing. In many cases, municipalities are willing to sell properties that will be redeveloped as community assets for as little as $1.
While that price is hard to beat, a facility being sold for $1 or donated to a nonprofit outright is likely in need of renovations that can negate cost savings achieved through the purchase price. Additionally, any environmental remediation required is the buyer’s responsibility, which can add significant cost to a facility project. All told, the cost of renovating such a facility may be comparable to building a new facility from the ground up without the flexibility of being able to design the layout of the facility in a way that will maximize efficiency and impact.
Timing is also an important consideration, since the sale of publicly owned properties sometimes requires approvals from the local municipality. And, if all of the funding and financing for the project must be secured before approval is granted, the process can become further elongated—with the added challenge that the organization will need to raise funds for the project before it actually owns the site.
Despite these challenges, it may still be beneficial to proceed with the purchase and subsequent construction project. To avoid wasting time and money pursuing the acquisition of a donated or discounted facility owned by a municipality that won’t ultimately meet the organization’s needs, however, it’s crucial for nonprofits to understand how to define what type of space is needed, identify suitable properties during a site search that also considers privately owned properties, and complete a thorough due diligence process before committing to a property long-term.
Toward that end, IFF’s managing director of Real Estate Solutions in Chicago, Kate Ansorge, led a webinar recently that covered best practices for nonprofit leaders and board members exploring the possibility of acquiring a publicly owned building. A recording of the webinar, which was presented by the Polk Bros. Foundation, is available below, along with a high-level overview of the content covered with timestamps for individual sections for easy reference.
Webinar Overview
Learning Objectives (3:28)
Site Search Readiness (4:09)
- Feasibility analysis and desired outcomes, including defining project parameters, identifying potential funding sources, and determining next steps.
- Assessing site search readiness to ensure that nonprofit leaders and board members are aligned on the property search area, proposed space needs, important property criteria, project budget, operating budget for the new property/facility, and potential sources of capital funding to support the project.
- Typical timing for a site search, who to engage to support the organization, creating a short list of properties to focus on, and developing estimates for construction and operating costs in a new facility.
Acquisition Process for Publicly Owned Properties (16:03)
- What to know before considering the acquisition of publicly owned properties, including cost considerations, timing challenges, and possible community engagement requirements.
- Specific to Chicago, where to search for publicly owned properties and what to expect during the acquisition process.
Predevelopment Process (32:06)
- Securing funding and financing commitments to support the project.
- Conducting due diligence that may include inspections, testing, and zoning review.
- Building a project team, including an architect and general contractor.
- Achieving project readiness as a precursor to the start of construction.
Case Studies (38:29)
- Latinos Progresando, which identified a closed Chicago Public Library branch that it later acquired and renovated to serve as its new headquarters and community center.
- Chicago Children’s Theatre, which identified a city-owned former police station that it later acquired and renovated to create “The Station.”
Key Takeaways (44:52)
- Review financial plan, including upfront development costs and ongoing occupancy costs, to plan for organizational sustainability.
- Also consider private properties during a site search and prepare development scenarios to identify pros and cons of available options.
- Identify potential development team members to support the search.
- Engage board members to support capital campaigns.