The Lake House — formerly Tetra — has been hit with financial difficulties since it was purchased for $2.6 million — about twice its assessed value — in 2015. RA showed a cost overrun of $430,000 last spring, due in part to a six-figure expected rentback from former owner/tenant Tetra that did not happen.
Exterior renovations to turn the building from offices to a community use building for afterschool care, meetings and events, also cost way more than anticipated.
RA CEO Cate Fulkerson will outline the Lake House financial outlook at tonight’s regular RA Board meeting. The board is also expected to pick an outside firm to conduct an independent audit of the Lake House cost overrun.
According to RA documents and Reston 2020’s analysis, RA will spend in 2016:
- $700,000 on renovation of the interior and exterior of the Tetra building.
- More than $107,000 on operating expenses, some $95,000 comprises employee-related expenses.
- Mortgage payments that will total nearly $184,000 this year.
RA numbers show it is now bringing in money as afterschool care began this month and it is booked for many events.
Total revenues were $3,677 in August, but are expected to jump to $31,000 this month and grow each month, according to RA’s spreadsheet.
But Reston 2020 compares the numbers with the original estimates in RA’s 2015 Tetra purchase fact sheet to show the ground it must make up, including:
- 2015 estimate that operating expenses would be $45,011 in 2016. RA’s latest report puts operating expenses at $107,303–more than double RA’s “fact sheet” projection.
- No program expenses because RA anticipated that the building would be leased back to Tetra developers through 2016. Now RA anticipates $107,303 in operating/programming expenses for this year.
- 2016 overhead expenses, including “existence cost” expenses and loan costs, were expected to reach $228,623 in the fact sheet. They are now projected to grow slightly to $247,072 this year.
Read more on Reston 2020’s blog.