Newspaper Archive of
Heritage Florida Jewish News
Fern Park , Florida
November 26, 2010     Heritage Florida Jewish News
PAGE 21     (21 of 24 available)        PREVIOUS     NEXT      Full Size Image
PAGE 21     (21 of 24 available)        PREVIOUS     NEXT      Full Size Image
November 26, 2010

Newspaper Archive of Heritage Florida Jewish News produced by SmallTownPapers, Inc.
Website © 2019. All content copyrighted. Copyright Information.     Terms Of Use.     Request Content Removal.

HERITAGE FLORIDA JEWISH NEWS, NOVEMBER 26, 2610 Common From page 1A on Aging, which oversees the Jewish community's senior services. JCA is now a freestanding organization no longer con- nected legally or structurally to Kinneret. Lefkowitz, Klei- man and Pearlman are its only board members, but the articles of incorporation allow for four more. From its purchase of 25 acres of land in Lake Mary in 2002 Until its interest in the project was sold to an Israeli- owned senior community company in 2007, the JSHC pursued the development of ShiraLago. ShiraLago was funded with a loan totaling $2.46 million from BB&T, secured by a first mortgage on the Lake Mary site; another $300,000 in seed money from the Federation; and an advance of $1.6 million from the Federation's line of credit with Bank of America. JSHC board members, who from the beginning included - Lefkowitz, Kleiman and Pearl- "man, lent $100,000 from their personal funds to the project. Through 2004, JSHC worked with architects and a national management group to get the project off the ground and made ongoing reports to the Federation. Details and architectural drawings of the planned com- plex regularly appeared in the Heritage. Lefkowitz told the Heritage .that the JSHC eventually con- cluded "it would take too much additional capital to build a $30 to $40 million facility." So in 2005, after nifie months of negotiations, fhey partnered with Israeli-owned, Miami= based Royal Senior Care. Toward the erld of 2005, before the finalization of the RSC partnership, the Federa- tion became concerned about possible lossofitsinvestment, and required JSHC to sign documents of debt obliga- tion, which Lefkowitz said his group was happy to do. "We signed an agreement as to what would happen if we failed," said Lefkowitz, "but not what would happen if we were successful." Both Lefkowitz's group and the Federationwere forthcom- ing in offering a variety of documents to the Heritage for examination, but at press time, neither party had been able to locate a signed copy of this particular agreement. As outlined byJCA and confirmed by the Federation, Roya ! Senior Care, as part of the partnership, assumed the $2.46 million BB&T mortgage and all other financial obliga- tions.except the $300,000 seed money. Upon the conclusion of the RSC deal in April 2006, the $1.6 million line of credit was repaid to the Federation. But after working with the Jewish Senior Hous- ing Council for almost 18 months towardaplanned2008 groundbreaking, Royal Senior Care in 2007 told the JSHC it preferred not to work with a partner. "'Either you buy us or we buy you,'" Lefkowitz said the Senior Housing Council was told. The JSHC didn't feel it could respsibly raise the funds to buy out RSC, let alone operate the facility without a partner. And so, in August 2007, the JSHC found itself in posses- sion of $4.2 million in cash. Then JCA. board members Howard Lefkowitz " had to decidewhat to dowith it. After paying back all ad- vance deposits from prospec- tive ShiraLago residents, taxes and all other obligations, they were left with about $3.9 million. -The JSHC board decided to repay the Federation's $300,000 seed money, plus $147,000 interest that had accrued and been paid by the Federation over the years. That figure was independently calculated by Rhonda Pearl- man and Ian Robinson, and agreed to by the parties. The JSHC also donated $150,000 to Jewish commu- nity programs for the elderly, split among several agencies. "The Federation lost not one cent of money," said Ed Kleiman. Kleiman and the other JCA members stressed that they did not believe the JSHC had even been required to repay that initial ;300,000--which they also described as a "grant"---or the interest on it. Lefkowitz called that $447,000 and the $150,000 donations to agencies a "windfall" for the Federation. The remaining $3.2 million technically belonged to the Kinneret Council on Aging. KCOApresidentAlison Polejes told the Heritage she thought KCOA had been entitled to claim it all. But, Howard Lefkowitz said, "the three of us [Klei- man, Pearlman and himself] came up with a vision," and presented it to KCOA. Polejes said ittooktwoyears of sometimes contentious discussion between the KCOA and JSHC (later JCA) boards before they agreed this sum- mer to a 50/50 split. "They were looking at some senior issues within the community," she said. "We felt that, to be fair, the right thing to do was to give them the money and let them form their organization. Because the original plan had been to build a complex for the Jewish senior community, it made sense to have some of the money go back to the communityY KCOA is using its share to in- vest in two ongoing programs for its low-income residents at its two downtown Orlando Kinneret towers: subsidies for hot kosher meals in the dining room five days a week, and the Congregate Housing Services Program provided by HUD through a matching grant. The CHSP provides the poorest of Kinneret's residents with housekeeping services, transportation to the grocery and the doctor, and meals seven days a week. If Kinneret had missed paying its share of the ongoing payments to HUD, the entire grant would have been cancelled permanently. The newly minted Jewish Capital Alliance putwhat then amounted to approximately $1.7 million into insured short-term CDs and began to strategize the best ways to use the funds for the community. JCA's raison d'etre, Lefkow- itz said, is to be a self-sustain- ing organization providing "seed money to get a Jewish- based capital facility, orspecial programming concept, off the ground." It will act as "a lending entity" to any "Jewish- defined" projects in the com- munity, with preference given to senior needs. Organizations will have to demonstrate a justifiable need and provide a business plan-- which JCA can help them write--to show how the funds will be repaid. With financing from banks and donors "oner- ous" in today's climate, said Lefkowitz, JCA can offer low rates of interest and generous repayment programs. "How else," said Kleirnan, "could anybody get anything started today?" Pearlman uses current terminology to call it "trans- formational lending," a kind of microfinance in which recipi- ent organizations learn to de- velop themselves and become financially self-sufficient. So why would JCA not want to use the money to help pay down the Maitland campus debt? "We spent a great deal of time batting this around with our advisors, and what we really concluded was that we had a vision that has a much longer horizon than dealing with the current problems immediately in front of us," said Lefkowitz. "We have confidence the Federation can solve its problem without our resources, andwe did notwant to jeopardize our resources for a long-term vision by al- locating them to a relatively short-term problem." Hope Kramer and Ian Robinson agreed that JCA has fulfilled its legal obligations. The Federation "never made a legal or moral claim to [the ShiraLago] dollars," Robinson told the Heritage. But he hopes and thinks that "both JCA and KCOA would look at our community as a whole and utilize those funds to help our community as a whole." "It's not our role to say" how the money should be spent, said Kramer. But "it's our fiduciary responsibility to look at any and all resources that may be available to us." Robinson said, "The Federa- tion was appreciative of the return of the seed money, including interest, and JCA also made donations to the community when the dollars were not as abundant." All three JCA principals feel they've more than taken care of any moral obligation they have toward the Federation. "We were exceedingly dili- gent to make sure the Federa- tion got a cut of whatever the upside of the transactionwas," said Lefkowitz, "without ever having had a formal agree- ment to do so." And they said they have no intention or need to compete with the Federation or any other existing agency for future funding. "We're a business entity," -said Lefkowitz, providing "seed capital, not construction capital," and they don'twant to take the Federation's place as a fundraising or administrative entity in the community. As yet without a completed written mission statement, they had wanted to wait to go public until more plans were d Kleiman final. Kleiman and Lefkowitz think it may be six months before they're ready to solicit loan applications. They are being advised by a network of legal and business profes- sionals active in the Jewish community who are "helping us in formulating our program and policies and procedures," said Lefkowitz. To the idea that the Federa- tion can handle its financial challenges with resources it currently has, Kramer responded, "That's not true at all." She added, however, that "we are continuing to look at any and all untapped resources in our community." Though she noted that "a lot of agencies have reserves" built on donations, "you can't ask them to withdraw funds from that." The root of the problem, as identified by Kramer in a Heritage interview earlier this year, is the $5.5 million debt the Federation carries on its Maitland campus, which houses not only its own offices, but the Roth Jewish Com- nunity Center, the Jewish Academy of Orlando nd the Holocaust Memorial Resource and Education Center. A decade ago, the Maitland campus underwent extensive renovations, and the Federa- tion took on significant bond debt. When the debt was cre- ated, the origina.l contract stated that the Maitland campus agencies would pay "rent" to the Federation to be put toward $3.5 million in bonds. But, after Kramer became CEO in 2009, sh.e saw that existing debt actually totaled $5.5 million, and that the "gap" had been funded over the years by the Federation. The current"crisis," Kram- er told the Heritage last week, is the $2 million "gap," not the total $5.5 million. That perspective "puts it all in a more manageable debt." Even so, the Federation needs to continue to gain a more stable financial footing by December 2011, Kramer and Robinson said. Otherwise, Bank of America can opt not to renew its current letter of credit, and could call the loan on the Maitland campus due. !'If they don't renew," said Burt Chasnov, "that's the crisis." Federation treasurer Mi- chael Soil likes the idea of strategically "leveraging" the assets of JCA and other com- munity agencies as guarantees to the bank for the security of the Federation catullus. "If JCA doesn't use its funds for the next 12 months," said Soil, "they could be used as leverage in renewing the let- ter of credit. Leveraged for the whole community." But leveraging is just one example of a solution, he said. "We're interested in finding solutions to our capital problems." Robinson said, "We are as a board exploring all the op- tions, based on all resources out there, to continue to en- sure that we are in alignment with the debt obligations and covenants with the bank." Soll said the campus agen- cies have been "behaving responsibly with respect to their operations, butit's their occupancy costs that have created the burden." Kramer and Robinson said the Federation has never been behind on its mortgage payments or other financial obligations, and despite recent bare-bones campaigns, it's been able to continue com- munity programs. This year's campaign has raised $100,000 since Oct. 1, but about two-thirds of that was already spent on the basic operating expenses of the Federation and agencies that share its campus. The Federation, said Ian Robinson, "is doing its job." But "when you burden it with all the well-intentioned deci- sions of the past [that brought on the campus debt] you strip it of resources, mission and identity." "Our programs are very relevant," said Kramer. "They fill the gap not being provided by our agencies." She 'said Federation groups like Or Hadash for young profession- als feed new members into agencies and synagogues, providing them with future donors among people who were unconnected before. "Federation no longer wants to go back to that historic place where we were the hammer and everybody else was the nail/' Kramer said. It wants to be "equal partners and do what's best for the community." Robinson said that if, speak- ing hypothetically, the Fed- eration were to immediately receive $2 million, it would "get us back to where we should have been all along, to where the 'rents' paid by the Federation, the Jewish Com- munity Center and the Jewish Academy cover the existing. debt obligation." But, said Kramer, "It would take $3 million to wipe out the gap and reduce the principal and interest agencies pay on their debt obligations." Three million, added Rob- inson, would allow some restructuring of those debt obligations, reducing the cash outlay from the agencies. Kramer knows she's bat- tling a lack of donor confi- dence. "A lot of very well- intentioned donors say [to the Federation], 'This campus burden is your problem,' and they go and give to another agency. Every agency's direc- tors and lay leaders partici- pated in deciding the size of this campus and promoting the need'---they felt a need. To turn around 10 years later and say, 'It's your problem'--we were all in this together at one point." Burt Chasnov, who spoke on behalf of himself and not the Federation, said JCA lead- ers were "stewards of dollars on behalf of the community" to construct a particular project. "After that, their job is done." He's concerned that"three wonderful, community- minded leaders have taken a community agency, changed its name and its mission, and are now answerable to nobody." Neither Chasnov nor any Federation leaders have ac- PAGE 21A Rhonda Pearlman cused JCA or its leaders of any wrongdoing. Chasnov actually thinks JCA has done a great service to the com- munity in protecting the surplus funds from the sale of the ShiraLago project. But in light of the current financial circumstances that the com- munity finds itself in, he be- lieves that the community as awhole, not just the leaders of JCA, should have a say in how that surplus should be used in the future, and what portion, if any, should be used to pay down the existing mortgage on the Maitland community campus. Chasnov calls the JCAboard "wonderful people, good people doing good things," but "Federation and only Federation looks out for the entire community. To take all the work of the community and put it on the back of the Federation, and when there's a surplusput it in one agency, is wrong." In a broader context, Chas- nov als0 advocates agency treasurers, executive directors and presidents coming to- gether as one body to discuss community financial issues. "We are an accidental creation," said Lefkowitz. He, Kleiman and Pearlman happened to be the only JSHC board members left standing at the time of the sale. "None of us," said Kleiman, "wants to wear a crown." Pearlman pointed to their collective "at least four decades of experience and involve- ment" in the community; the fact that she and Lefkowitz belong to two of the Orlando Jewish community's founding families; her own professional experience in nonprofit gov- ernance; and their collective business sense. "Who could be more quali- fied?" she said, to manage the future of dollars benefit- ing Jewish seniors and to be "stewards of the community's assets to be able to promote growth." She emphasized JCA's sense of "yiddishkeit" and "tikkun olam." Pearlman, Kleiman and Lefkowitz remain proud of the decade of time and commitment they gave, and unapologetic about the deci- sions they made. Mterending its partnership with the Jewish Senior Hous- ing Council, Royal Senior Care ended up with a project estimated at $35 million, currently in operation as Oakmonte Villige a senior living facility housing Jewish and non-Jewish residents. The JCAboard thinks thit's definitely a positive. Rhonda Pearlman said the effort her group put into making the genior facility happen "was and still is, the only successful project that the community has under- taken to raise funds outside its donor base."