The Land Conservancy is asking creditors and mortgage-holders to take interest-only payments for the next year and many have already said they are willing to come to the aid of the cash-strapped organization, says TLC board chairman Alastair Craighead.
"Clearly, these are people who believe in TLC and don't want to see TLC in serious problems over debt," Craighead said.
Craighead is promising substantial changes in how TLC conducts business. The emphasis will be on pulling back to essential operations with more board oversight of finances, he said.
"We have come up with a plan to keep TLC in business and move towards a sustainable future living within our means and part of that plan is to ask our creditors to give us a little time."
Most of the loans and mortgages are held by individuals rather than banks.
TLC buys and looks after properties that are seen to have environmental or heritage significance. Its holdings on Vancouver Island include Madrona Farm, Ross Bay Villa, Abkhazi Garden and Sooke Potholes.
It has relied on mortgages and loans to finance its purchases, rather than raising money first.
TLC has been expanding its holdings, but fundraising hasn't kept pace with growing expenses.
Long-term debt now stands between $7 million and $8 million and shortterm payables are about $1 million, Craighead said.
Two meetings were held this week with secured and unsecured creditors and letters have been sent to those who could not attend, Craighead said.
"They know now what we need from them and many have indicated they can help us in this way and a significant number have said they will donate the money we owe them," he said.
The new financial plan is based on monthly income of $100,000 to $150,000, which will be used to run a shrunken organization and pay debts, Craighead said.
Monthly income comes from donations, memberships and operations such as the Sooke Potholes campground and Abkhazi Garden restaurant.
Mortgages and loan payments cost TLC between $50,000 and $60,000 a month, but, if creditors accept the interest-only plan, that will drop to about $20,000 a month.
Staff size will be reduced to 12 full-time equivalents, down from about 50 two years ago.
"We are really running the organization very differently now. The board is much more involved in the management and we are maintaining only essential functions," Craighead said.
The board has received advice from business advisers and relentlessly crunched the numbers, he said.
"I believe we have now got it as right as we possibly can."
A priority will be paying off $12,000 in 2010 property taxes, meaning the properties will not go to tax sale, Craighead said.
TLC will still have hefty outstanding tax bills from 2011 and 2012, but many municipalities exempt TLC properties and the board plans to ask Sooke council if the Sooke Potholes properties could be exempted.
The TLC annual meeting, when detailed financial statements will be available, is to be held Sept. 15.
"We hope to present our sustainability plan at that time, because we have been looking at how TLC does business and we have come up with some things that people need to hear," Craighead said.
"The first thing is to rebuild public trust. The other ones are to cap and eliminate short-term operational debt, to systematically reduce long-term debt and to avoid crisis management," he said.
