The processes for securing potential partners varied greatly among study participants. Participants described the need for a “perfect storm”-type environment where the YMCA’s timing and that of its potential partners was in sync.
This “perfect storm” relies on the assumption that all partners are in the same place at the same time. This rarely happens. As a result, the due diligence process is elongated. The study identified a unique tool utilized by a YMCA where a request for proposal (RFP) was generated by the YMCA for the purpose of alerting and identifying potential partners. This RFP was successful in clarifying the preliminary commitment levels of potential partners and their due diligence requirements.
While this is just one example, study participants universally agreed that the “perfect storm” required the potential partners’ ability to confirm the following:
- What is the incentive/benefit that the YMCA brings to the partner?
- What is the incentive/benefit that the potential partner brings to the YMCA?
- How does this potential partnership benefit each partner’s mission and the community?
- What steps are necessary in order to formalize an agreement?
- How does each partner’s commitment and funding time line affect the proposed project schedule?
Click on this link to download a sample of a Request for Proposals.
Municipalities have many options related to how they fund capital improvements. Certain funding mechanisms and debt issuance models have taxable implications related to the operator’s tax status, sublease arrangements, etc. Due to these restrictions, if the YMCA is considering pursuing additional partners to occupy a facility that is wholly or partially funded
by a municipality, it is critical to determine whether a potential tenant complies with the municipality’s intended funding parameters.