Borrower
Edmonds Senior Center
Lender
EWC Loan Fund, LLC
The recommended minimum investment amount is $25,000.00
Clicking "Get Started" and communicating your level of interest is not a binding commitment.
$1,800,000
Minimum Loan Goal
$3,000,000
Total Loan Requested
4.00%
Interest Rate
1.65%
Effective Rate
Investment Term
5 years
Funding Progress
8%
Amount Committed to Date
Amount Committed to Date
$250,000.00
Total Investors
Total Investors
6
Investors Accepting Reduced Returns
Investors Accepting Reduced Returns
4
Note: The interest rate listed above is the annual interest rate is the maximum rate you can receive on your investment. However, each investor is given the opportunity to elect a lower rate in order to further enhance a loan to the organization by lowering the effective interest rate.

* This listing is for informational purposes and is not an offer to sell or a solicitation of an offer to buy any securities. Any offering or solicitation is restricted to qualified prospective investors who are supporters of Edmonds Senior Center, who have reviewed a confidential offering memorandum and who have executed the subsequent subscription documentation. Persons accessing this site are deemed to represent that they will not use the information herein to offer to purchase securities in a manner that would violate restrictions set out in the information or any securities laws of any jurisdiction.

NOTE: YOU HAVE BEEN SELECTED BY YOUR NONPROFIT TO PARTICIPATE IN AN IMPACT INVESTMENT WHICH WILL DIRECTLY FUND THEIR LOAN NEED. BY CLICKING THE "GET STARTED" BUTTON AND EVIDENCING A PLEDGE, YOU ARE NOT COMMITTED TO FOLLOW THROUGH WITH A PLEDGE UNTIL YOU HAVE ALL OF THE DISCLOSURE INFORMATION HAS BEEN PROVIDED AND YOU AGAIN INDICATE AN INTEREST TO STAY INVOLVED.

Introduction

The Edmonds Senior Center (ESC) Board of Directors completed a 9-month strategic planning process in January 2015. One of the goals identified in the plan was to build a sustainable business model, ensuring the organization would continue to thrive for generations to come. This is particularly urgent as the organization concludes a $16,000,000 capital campaign to build the Edmonds Waterfront Center a new facility that will serve people of all ages.

We encourage prospective investors to review all the information contained in this informational site, including the Board's strategic and business plans. We are grateful for your willingness to consider participating in the funding of a low-cost loan for this project. With your support along with the extraordinary charitable support of those listed on the Honor Roll (see Honor Roll under Resources), we stand at the precipice of this opportunity becoming reality.

Mission 

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Connecting and enriching our community through programs, services and activities that engage, inspire and support people of all ages.

Strategic Priorities – from January 2015 Strategic Plan (updated 8/21/18)

  1. Replace aging facility with new multi-purpose center that serves citizens of all ages. Key metric: new facility constructed
  2. Expand programs with emphasis on health & wellness, recreation and education. Key metrics: range of programs offered; program participation and membership
  3. Build a sustainable business model. Key metrics: balance sheet; operating reserve; endowment

    In pursuit of these goals and due to significant structural issues facing the 55-year old Edmonds Senior Center building, including a 2007 geotechnical report which found that the building “would not perform at a Life Safety level during a code level seismic event”, ESC embarked on a $16M capital campaign to replace the building. To date, more than $16m has been raised for the effort.

    Rather than just building a new senior center, ESC decided to use the opportunity to build a modern 26,000 square foot community center offering programs for residents of all ages. Using an open design concept where possible, the building is designed to offer maximum flexibility for current and future programs. Most spaces have been designed for multiple uses to accommodate different user groups and ongoing program innovation. The current design features a combined ballroom/café space, full commercial kitchen, several multi-purpose rooms, a coffee kiosk and a small teaching kitchen on the second floor. 

Community Need

Responding to the unprecedented demographic aging trend and significant structural issues facing the 55-year old current Edmonds Senior Center building (a 2007 geotechnical report found that the building “would not perform at a Life Safety level during a code level seismic event”), the organization embarked on a$16M capital campaign to replace the building.  Rather than just build a new senior center, ESC decided to use the opportunity to build a modern 26,000 sf community center facility offering programs for residents of all ages.

Based on community engagement, the new center will be a vibrant, active and inclusive center with a focus on health and wellness and reducing chronic disease. In addition to health and wellness the center offers a wide range of recreation and education programs. Remaining relevant for this population that is living longer and seeking a more fulfilling life requires a new model of service based on empowerment. Using an open design concept where possible, the building has been designed to offer maximum flexibility for current and future programs. Most spaces will be designed for multiple uses to accommodate different user groups and ongoing program innovation. 

About Us

Since 1967 the Edmonds (formerly “South County”) Senior Center (ESC) has provided services and activities in recreation, education, health and social concerns of the senior population of South Snohomish County. In 1971 HUD recognized the Center as a national model for its multi-purpose approach and that program innovation has continued through the years. The Center provides over 75 different activities and services per month serving 4,000 seniors annually. Services include: health and wellness programs – Enhance Wellness and PEARLS (in-home depression counseling) programs (funded by Verdant), health screenings, dental care, foot care, annual healthy living fair, Bastyr natural medicine clinic and nutritional daily lunches; education - Edmonds Community College classes, computer education and defensive driving; fitness - dance, walking, Tai Chi, Yoga, and aerobics; social - games, events and fields trips.


Since its beginning, ESC has been considered a regional center. In 2015 52% of our participants resided outside of Edmonds. Over 80% of these came from South Snohomish County.

The new Edmonds Waterfront Center will be built on the same waterfront site of the old Senior Center building but will operate as a multi-generational activity Center and will serve a much larger demographic in an expanded timeframe. From 8:00am-4:00pm most of the programs will be aimed at seniors and organized by ESC. From 4:00-10:00pm programs for all ages will be offered by the City’s Parks, Recreation and Cultural Services department.

 

Seniors and high school students meet for Trivia Night
Seniors and high school students meet for Trivia Night

NOTE: YOU HAVE BEEN SELECTED BY YOUR NONPROFIT TO PARTICIPATE IN AN IMPACT INVESTMENT WHICH WILL DIRECTLY FUND THEIR LOAN NEED. BY CLICKING THE "GET STARTED" BUTTON AND EVIDENCING A PLEDGE, YOU ARE NOT COMMITTED TO FOLLOW THROUGH WITH A PLEDGE UNTIL YOU HAVE ALL OF THE DISCLOSURE INFORMATION HAS BEEN PROVIDED AND YOU AGAIN INDICATE AN INTEREST TO STAY INVOLVED.

Loan/Offering Details

EWC Loan Fund, LLC (“EWC FUND”) is an entity established for the sole purpose of raising investment funds through the sale of Notes in which 100% of the proceeds will be used to finance a loan to Edmonds Senior Center (“ESC”) evidenced by a Loan Agreement, Promissory Note and Security Agreement (“Loan”). The Loan will be used to provide necessary gap financing for construction of its new facility. The minimum loan amount is $1,800,000 with a maximum projected loan amount of $3,000,000.


NOTE: Since the facility is being built on ground leased land from the City of Edmonds, real property is not available as collateral for the loan (Note: A copy of the Ground Lease, as amended is attached with this listing). The only collateral for the loan will be the filing of a Security Agreement against the tangible and intangible assets of ESC.

Each potential investor is encouraged to review all information provided within this listing including the supplemental documentation. This includes reviewing the past, current, and forward-looking financial information provided.

ESC

As with any mortgage backed investment such as this one, your ability to get repaid as monthly obligations become due and payable will depend on the financial ability of ESC to meet its obligations. There no insurance and ultimately, and in a worst-case scenario, the collateral will be foreclosed on and the net proceeds disbursed to the 1st position mortgage holder, if applicable, and then to EWC Fund for disbursement to participating investors.

The Notes to be issued by EWC FUND to members of ESC will have a maximum interest rate return of 4% and a term of 5 years. Each investor will have the ability to further reduce the rate for their specific Note which results in greater positive impact for ESC. While the repayment strategy provided below indicates that ESC will be making principal repayments on the Loan, there are no obligations within the Loan requiring any prepayment of principal.

HOWEVER, since it is possible ESC will not need to close on the loan with EWC Fund because sufficient charitable funding comes in to pay for the construction of the facility, the EWC leadership has agreed to pay each investor that commits to participating in the EWC Fund an amount equal to .50% (i.e., 50 basis points) per year. The amount that will be paid will be calculated from the date of your commitment until such time as ESC closes on the loan with EWC Fund or the date notice is delivered to each investor that the loan will not be necessary.

Use of Proceeds / Collateral Details

Borrower has set a total loan need of $3,000,000 from the EWC Fund. ESC will use the commitment of the availability of a $3,000,000 to unlock $4M in funds from the State of Washington. The EWC Fund needs to demonstrate it can fund the minimum loan amount of $1,800,000). As such, if the State of Washington requires the loan funds to be placed in escrow to demonstrate funding for the facility, each investor will be notified at the appropriate time when necessary to fund each investor’s commitment.

The Loan will have a Security Interest in all of the general intangible assets of ESC but there is no real property available for collateral.

FURTHER NOTE: The Loan to the Borrower is to address construction costs and future working capital. While the construction budget allocates contingency reserves, due to the potential of cost overruns related to any construction project, there are always risks in a major construction project such as this one and if for some unforeseen reason, ESC was not able to complete the construction of the new building, it might result in a significant negative impact on Property's value and the financial health of the ESC.

For a detailed review of the Use of Proceeds, we encourage investors to review the 6-year Pro Froma (i.e., through the year 2025) as well as the cash flow analysis which are both included with this listing (See Pro Forma and Cash Flow Analysis respectively).

Capital Campaign

In 2013 the City’s Strategic Action Plan called for a long-term solution for updating the Senior Center and designated ESC as lead to work with the City’s Parks & Recreation on this endeavor. The following year the City Council endorsed ESC’s plan to demolish the existing building and construct a new community center. The capital campaign was formally launched in early 2015. 

plan overviewA capital campaign committee was formed and meets monthly. The campaign is being led by former 3-tem Edmonds Mayor Gary Haakenson. The diversified fundraising plan outlines how the needed funds will come from 5 sources: 44% from Individuals;  38% from Government;13% from Foundations;  3% from the Board and 2% Business and the Community.  Last year we moved from the silent phase of the campaign (where we focused on the Board, major gifts, government and large foundations) to the Public Phase of the campaign. During this phase we have added an emphasis on smaller gifts $1K - $10K, business solicitation, events and smaller foundations.

Leadership - We have raised $5,967,819 in major gifts ($4M from Rick Steves). We have a Capital Campaign Cabinet in place that continues to lead the effort on major gifts.

Board - We are currently completing the Board Campaign. Our $475,000 Board goal is significant given that a number of members are retired and on fixed incomes. In the past 12 months we have also made a concerted effort to expand the Board, electing 6 strategic new Board members.

Securing Food Service Partner

Community Campaign – The Community Campaign is the final phase of the capital campaign. Targeting the last 2% of the financial goal with an objective of creating opportunities to engage a broad base of community members we will use events, direct mail and on-line giving as our key strategies. The community campaign also includes businesses. We have met with 5 business owners and the Chamber of Commerce. Based on these initial interviews we believe we can raise somewhere between $300,000 and $500,000 from local businesses and service Clubs. We are also exploring a merchant campaign where we will approach all local businesses to participate in a high-profile month-long campaign where businesses customize their promotion or sponsorship based on percentage of sales.

Government – We have secured $4M in funding from the State of Washington to date. An additional appropriation is being sought in the 2020 legislative session. We are also seeking funding from Snohomish County since the site is designated as a regional park and the Center will serve people from all reaches of South Snohomish County

Foundations – We have identified 17 foundations that fund capital campaigns and align with our goals for the new Center. We have raised $2,067,000 from foundation including Keith Birkenfeld, Hazel Miller, Norcliffe and the Young Foundation.

ESC retained JGL Food Service Consultants ("JGL") to prepare a feasibility study of potential food service operations in anticipation of the upcoming construction of the Edmonds Waterfront Center (hereinafter EWC) and RFP process. The report by JGL contains its preliminary review, assessment and recommendations regarding projected revenues for food services from the new facility (Please see the complete report included with this listing titled JGL Feasibility Report).

Construction

The building permits have been secured. W.G. Clark has been retained as the general contractor. The official groundbreaking took place on July 9, 2019. The old building has been demolished. Construction of the new center is underway and is expected to be completed in August 2020.

 

 

NOTE: YOU HAVE BEEN SELECTED BY YOUR NONPROFIT TO PARTICIPATE IN AN IMPACT INVESTMENT WHICH WILL DIRECTLY FUND THEIR LOAN NEED. BY CLICKING THE "GET STARTED" BUTTON AND EVIDENCING A PLEDGE, YOU ARE NOT COMMITTED TO FOLLOW THROUGH WITH A PLEDGE UNTIL YOU HAVE ALL OF THE DISCLOSURE INFORMATION HAS BEEN PROVIDED AND YOU AGAIN INDICATE AN INTEREST TO STAY INVOLVED.

Repayment Strategy

ESC has sufficient operating revenues and reserves to service the EWC Fund loan as the obligations.  Since there are no prepayment penalties on the EWC Fund loan, ESC leadership intends to make principal reduction payments as grants and other charitable gifts becomes available. It is the expectation of the ESC leadership, the organization will be paying off the entire principal balance of the EWC Fund loan prior to the expiration of the five year term of the loan.  However, if it became necessary to refinance the EWC Fund loan, the plan for refinancing the loan will include  (i) allowing investors in the EWC Fund to elect, in each investors sole discretion, to participate in refinancing of the EWC Fund loan for another term, (ii) securing of a conventional loan from a bank, or (iii) a combination of the two preceding options.

Necessary Disclosures

Each potential investor, once the formal listing has been created, will be required to read all information provided within the listing including the supplemental documentation. This includes review of the past, current, and forward-looking financial information provided. The supplemental information helps provide context as to the Borrower's credit worthiness. Note, due to the structure of the Loan and to stay current on the obligation, the nonprofit will only be required to satisfy installment payments on the loan, and is not obligated to make additional principal repayments on the Loan until the loan comes due.

When purchasing a Note, the investor will be relying on the nonprofit to make the installments payments due on the Loan and payment of principal on the maturity date of the Loan. This is an investment which means there are risks that you will need to review in advance of any formal purchase of a Note. 

Potential Collateral

Railing

The nonprofit has indicated the minimum loan need as well as the maximum amount which is shown above. They have also indicated the purpose for the loan. With each nonprofit loan, there will be a security agreement as part of the overall loan documents between the LLC and nonprofit. In some cases, there may not be real estate and a financing statement which encumbers the general assets of the nonprofit will be recorded. 

NOTE: If the nonprofit is unable to support its outstanding obligations, any resources that are available, including proceeds from the sale of the assets of the nonprofit will be directed toward paying off obligations. Depending on the LLCs position in receiving funds, in such an event, there may not be funds to repay the LLC. This would result in an investment loss to any Note investors.

Risk Questionnaire

Q: Are there any outstanding or pending litigations against the Borrower? No

Q: Are there any material changes in revenue sources that should be disclosed or are not represented in the financial information provided? No

Q: Are there any material changes in operating expenses that should be disclosed or are not represented in the financial information provided? No

Q: Are there any material changes in the Borrower's leadership (Compensated or noncompensated leaders) that should be disclosed? No

Q: Are there any employment issues or claims outstanding or pending? No

Q: Are there any environmental issues on any of the real estate related to the Borrower Loan? No

Q: Has the Borrower been in default in any obligations in the past 3 years? No

Q: Has any of the key leadership of the Borrower (compensated or non-compensated) been involved in any pending or current litigations or judgments that could adversely impact their ability to serve the Borrower? No

Q: Has any of the key leadership of the Borrower (compensated or non-compensated) ever been indicated or been convicted of a felony? No

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NOTE: YOU HAVE BEEN SELECTED BY YOUR NONPROFIT TO PARTICIPATE IN AN IMPACT INVESTMENT WHICH WILL DIRECTLY FUND THEIR LOAN NEED. BY CLICKING THE "GET STARTED" BUTTON AND EVIDENCING A PLEDGE, YOU ARE NOT COMMITTED TO FOLLOW THROUGH WITH A PLEDGE UNTIL YOU HAVE ALL OF THE DISCLOSURE INFORMATION HAS BEEN PROVIDED AND YOU AGAIN INDICATE AN INTEREST TO STAY INVOLVED.

Who are the investors?
Investors come from your supporter base and their extended networks: current supporters, past supporters, family, and/or business relationships that are connected to the nonprofit.

How does the loan work?
Similar to a commercial loan, the funds invested by supporters would be loaned to the nonprofit evidenced by a loan agreement, promissory note, and security agreement as a lien against the property of the nonprofit as collateral. Once the loan closes, the Borrower will be invoiced each month to make a loan payment. This is a win-win situation, bringing socially-minded individuals together to realize a financial benefit for the investor while driving greater social impact through the nonprofit.

Can retirement funds be utilized for this type of investment?
Yes. While participants are able to direct cash, many are unaware that it is possible to utilize self-directed retirement funds (IRAs, previous employer 401k, 403b, etc).

Does this cannibalize giving for the nonprofit?
No. This approach enhances existing relationships within nonprofit communities. Since it isn’t the traditional request for donation, supporters are typically excited to earn a return on investment while knowing they are driving impact. This community financing approach also cultivates new relationships. As a result, Semble has found in many cases that increased volunteering and giving occurs from the participating investors.

What is the structure of the investment that funds the nonprofit loan?
The investment is a payment dependent promissory note investment. Payment dependent means that a return is directly tied to the nonprofit actually making the required payments on the loan.

How does the Platform offer better interest rates?
The Borrower sets the key terms of the loan, such as the interest rate, which helps ensure a better rate. This approach avoids the cost and complexity of bank lending and passes the savings on to borrowers and the investors. For example, banks have high administrative, marketing, and infrastructure costs—adding to what they need to charge in order to make a profit. 

 

What are the next steps? 
At the point that you are ready to participate, select "Get Started" and follow the simple steps. It takes about 2 minutes to enter the basic information, including your email address, amount you want to invest, and the rate of return you would like to receive. Choosing to take this first step is not a binding commitment.Once you've made your commitment, you will be prompted by Semble to fill out some paperwork via DocuSign - you can read more about that by clicking here.

 

 

Ready to commit to invest in the loan needs of Edmonds Senior Center?

Click the blue Get Started button to enter your commitment. This is a non-binding commitment and Semble investor support is always available if you have any questions or need assistance.