news story / By Hank Sims

The NEC’s Subprime Mortgage

Real estate deals may not have impoverished the Northcoast Environmental Center, but they sure didn’t help

(July 30, 2009)  By now we’ve all heard plenty of stories about people who bought houses they couldn’t afford, at the top of the market and with no money down. Those luckless homeowners, many of them foreclosed upon long ago, will forever be a symbol of this decade’s great financial collapse.

Still, there haven’t been many stories quite like the Northcoast Environmental Center’s. Earlier this month, the legendary Arcata institution underwent a dramatic downsizing, laying off its executive director, moving offices and cutting back production of the Econews, its monthly newspaper. Now it’s coming to terms with the fact that it made the same bad real estate decisions so many others did in recent years — and, worse, that it did so on the backs of its supporters.

The NEC’s house in Arcata. Photo by Lynn Jones.

GALLERY >

On Friday, Pete Nichols, chair of the NEC’s board of directors, sounded pleased that the organization is moving past having to worry quite so much about balance sheets, asset management and foreclosure.

“We’re using this as the opportunity to get out of the real estate business, and back into conservation,” Nichols said.

However, the NEC isn’t quite through with its real estate troubles yet. Some local people are a bit on edge right now, wondering when and how they’re going to get back the money they loaned to buy the organization its headquarters at 1465 G St., Arcata, back in 2006.

The Northcoast Environmental Center borrowed a total of $550,000 to finance its purchase of the G Street office, according to deeds of trust filed with the Humboldt County Recorder’s Office. All of the money came from local individuals and nonprofits. And though two creditors were paid off with the sale of one of the NEC’s two downtown parcels last April — leaving a total of $350,000 loaned against the G Street property — as of this writing, the NEC has missed payments on the outstanding loans.

“I just have to play it day by day and tell myself it’ll work out,” said Arcata resident Don Tuttle Wednesday. Tuttle, the county’s former director of public works, and his wife, Andrea, former head of the California Department of Forestry, loaned the NEC $50,000 in 2006 toward the purchase of the office.

Tuttle said that he first heard that the NEC was seeking money to buy new office space sometime in 2006, while at a fundraiser for a different institution at Baywood Golf and Country Club. Tuttle said that the money requested was “a pretty good chunk of change” for his family, but that he felt it was important that the NEC should survive. After thinking it over, he went to a lawyer’s office and signed papers.

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