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Lessons Learned

An important and perhaps obvious lesson to be drawn from the successful effort to save the former Temple on the Heights is that adapting a sacred landmark for a new life in the secular world is a complicated and complex challenge. The starting point in this process is a clear vision shaped by a detailed market study that identifies and assesses alternative uses of the facility and projected revenue flows derivable from each. Market assessments may be tempered by the values of preservation and civic purposes, but these should not cloud assessments of financial realities.

From this follows decisions about the appropriate organizational form. A strategic business decision must be made in the effort to adapt sacred landmarks for other uses, whether to attempt to operate the facility as a for-profit or not-for-profit or public venture

For-Profit: The attempt to operate the Civic as a for-profit business partnership with an array of full and limited partners was not particularly successful. Despite the commitment and apparent dedication of the partners, this approach appears to have floundered due to an array of operational cost and revenue problems, as well as complex and costly maintenance and restoration needs. If the projected use of a facility does not meet the "test of the market," the facility can be operated as a "business" only if some form of public subsidy in the form of tax exemptions or direct public payments can be justified.

Nonprofit: The transfer of the Civic from the Temple Associates partnership to the Civic Foundation demonstrates the difficulties of adaptive reuse to commercial alternatives, particularly when the facilities require high maintenance and renovation costs. Nonprofit status removes the need to generate a return to stockholders or owners. It also creates an entity that can receive funding from foundations that, due to their legal status, can only make contributions to nonprofits, and an entity that can receive tax-deductible contributions from individuals and businesses. Nonprofit status, however, begins to define purpose. To sustain a facility as a nonprofit requires a compelling purpose and functions that are consistent with contributors' charitable purposes and funding guidelines. Further, many foundations are precluded from, or very reluctant to fund, operating costs, particularly on an ongoing basis. The Civic Foundation appears to have found some success in creating a virtual incubator for artistic and religious endeavors. This model, however, was threatened by problems of tax arrears and capital renovations costs that were transcended only with great difficulty and financial innovation.

Public Use and Public Purpose: An alternative for adaptive reuse of sacred landmarks is acquisition by government for use in housing governmental units. This option was considered by the City of Cleveland Heights but rejected because of the very high cost of renovating the facility relative to new building construction. An intermediate alternative to public ownership is housing some government services that generate rental income for the facility. This could provide core tenants for both profit and nonprofit adaptive reuse. Another intermediate alternative is the use of public funds to facilitate adaptive reuse because the facility serves a historic and/or current public purpose. The Civic experience offers examples of state and city government providing funding, including the innovative use of linked deposits to generate resources to sustain and maintain the Civic.

The experience of the Civic also illustrates the depth and complexity of financial issues confronting adaptive reuse of sacred landmarks, as well as the complexity of financing to address these financial barriers. The transition from Ark to Art was underwritten by a wide variety of financing techniques, including equity investments through partnership of full and limited partners; foundation loans and grants and foundation and government linked deposits; private giving and local government funding; guaranteed loans; rental income; tax forgiveness; debt transfer; balloon loans; tax deductible donations; federal Community Block Grant funding through the City of Cleveland Heights; State of Ohio Capital Budget allocations; Civic- sponsored fund raising programs; juried art shows; and low interest loans. In addition, the Civic explored federal Historical Tax Credits, Economic Development Administration grants, and congressional line item appropriations. The Civic's experience with financing illustrates four important points: 1) A variety of traditional and non-traditional financial instruments are available, particularly for nonprofit entities. 2) These financial instruments need to be packaged to achieve viable financing approaches. 3) Workable approaches to financing require expertise, creativity, and innovation. 4) Plans for the adaptive reuse of sacred landmarks must be undergirded by sound financing strategies if they are to succeed.

Revealing the enormity of the efforts involved should not discourage others from attempting to carry out related plans. The travails and frustrations involved in creating and sustaining the Civic Foundation have been clearly identified, but the experience of the Civic also demonstrates the deep satisfaction of successfully meeting these challenges, of preserving a sacred landmark as a civic asset, and the privilege of contributing so substantially to one's community. It is hoped that this latter lesson learned will be more than a sufficient restorative for those daunted by the challenge.

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