Thursday, April 22, 2010

Deep Thoughts on the Nussbaum Center, by John Hammer

"…Tuesday night was the second time the City Council had heard a plea for $1.2 million from the Nussbaum Center for Entrepreneurship.

…The total cost of renovating the Carolina Steel corporate headquarters to make it suitable for a business incubator is estimated at $4 million, and Funchess gave the impression that if he didn't get the $1.2 million from the city that the Nussbaum Center couldn't operate.

That is true if a business has to have $75,000 for "Executive Conference Room Furniture," $125,000 for "Large Conference Room Furniture," and $250,000 for "Office Furniture."

Perhaps at the Nussbaum Center now, they are all sitting on the floor, or maybe they have an old bean bag chair, because it would appear they can't move the furniture that they have over to the old Carolina Steel corporate headquarters.

…The cost for "Signage" is estimated at $50,000. But the "Training Room Equipment" is a mere $25,000. They are moving into a building that is 20,000 square feet smaller than where they are now, and they plan to spend $485,000 on furniture and displays, not counting the $250,000 for telephone and communications equipment, or the $50,000 for "Building Maintenance Equipment," yet they still plan to spend $100,000 on moving expenses.

…They want the taxpayers of the city to pony up $1.2 million so that they can put $250,000 in a savings account, officially called a "Building Maintenance Reserve Fund." And they also want $413,000 for an "Operating Capital and Reserve Fund." So they want the city taxpayers to cough up $1.2 million so they can put $663,000 in savings accounts.

Funchess explained that the current business plan for the Nussbaum Center was that it rented 80,000 square feet of space from Revolution Mills for $2 a square foot and rented it out to businesses at about $15 a square foot. That would give the Nussbaum Center a healthy revenue stream and, according to the tax records, the center's revenue is over $500,000 a year.

… in the new building, the Nussbaum Center will have 60,000 square feet and it won't be paying any rent. If the city ponies up the money, then running the Nussbaum Center will involve no financial worries at all – nothing like a start-up business.

After the meeting Thompson noted that the Nussbaum Center would no longer have any rent to pay, so he didn't understand why it couldn't take the money it was paying in rent and use that to make payments on a loan. He also said he was going to have trouble voting to give money to the center so that it could compete with businesses trying to rent out office space."

John Hammer
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