Unpaid rent, lack of resources and a new course for Stanislaus Veterans Center

The county will take over management of the meeting facilities at the Stanislaus Veterans Center, at Coffee Road and Sylvan Avenue in Modesto, after a partner foundation wasn’t able to make rental payments of $14,774 a month.

The county will seek a private operator to manage the 315-seat meeting hall and conference rooms and market the facilities for events held by veterans groups, other organizations and private parties.

Under an agreement approved in September 2015, the Veterans Foundation of Stanislaus County was responsible for $177,283 in annual rent payments. A foundation leader said Friday that volunteers handling the day-to-day chores of running the center were left with limited time for major fundraising to pay the rent.

In April, the foundation told county officials it couldn’t make the payment for that month and has since missed other monthly payments. Citing a lack of resources, the foundation notified the county in October that it no longer could meet the rental obligations. The county Board of Supervisors approved the transfer of management last week.

“It was killing us because it’s all volunteer,” said Michael Pelucca, the foundation’s acting chief executive officer. “We didn’t have enough board members. ... In the last three months, I have been putting in 12- to 14-hour days.”

County Supervisor Terry Withrow was asked Friday if too much was expected of the volunteer organization in the original agreement for developing the veterans center.

“I don’t know that too much was expected,” Withrow said. “We put together a budget based on what we hoped would happen. It didn’t come to fruition. We are making adjustments and figuring out another way to make it work.”

Effective Jan. 1, Stanislaus County’s chief executive office will take over operation of what officials say is a one-of-a-kind center for military veterans, who may need a place to socialize, apply for benefits or get help for post-traumatic stress. The Veterans Foundation of Stanislaus County, founded in July 2015, wants to focus its energy on a fund-raising drive in 2019.

The county will assume responsibility for an additional $166,700 in rental payments for the veterans hall and conference facilities, bringing its share of the cost to almost $315,000 annually.

Annual costs for the 19,000 square feet in meeting facilities are slightly more than $405,000 when rent, janitor service and utilities are included. Modesto’s contribution of $80,000 a year won’t change. The veterans foundation will continue to manage a 685-square-foot lounge, making it responsible for $11,590 in annual rent.

According to the report, the county is owed $138,853 in missed rental payments.

County officials hope a private operator can schedule weddings, private parties and other events to generate fee revenue to offset the loss of rental payments to the county. A facility committee will make recommendations for rental rates, and the county could issue a request for proposals from interested businesses in January.

The county and Modesto combined forces with the start-up foundation to open the facilities in March 2017 as a one-stop service center for military veterans and as a meeting place for veterans organizations. The county managed the remodeling of a commercial building at Sylvan Square shopping center and entered a 10-year lease for a total of 37,547 square feet for the veterans center.

About 19,000 square feet of that is subleased for the veterans hall and conference rooms. County Aging and Veterans Services and the Community Services Agency also have offices in the center..

Patty Hill Thomas, county chief operating officer, had no critical words for the foundation, which is dedicated to supporting former soldiers who served in the Middle East, Vietnam, Korea and World War II. But she said the partners in the project decided recently it was time to recalibrate.

The veterans foundation will remain as a key partner, and local veterans organizations such as the American Legion will continue to have free use of the facilities.

“We agreed a change was needed to re-balance the partnership,” Hill Thomas said. “(The foundation) had a big job to do and they did that well. We all concluded we needed to get an events manager for the hall and meeting area.”

The foundation tried a number of ways to raise funds for rental costs and other needs, including renting out the facilities for private events. Signage and naming opportunities at the center failed to produce enough income. Pelucca, a Marine veteran who served two tours in Vietnam, said the volunteers were stretched too thin to effectively market the facilities.

Pelucca said a former foundation CEO dedicated countless hours and decided she needed to retire in October. Members are now trying to rebuild the leadership team.

The foundation board expects to seat new members at its annual meeting in January. A fund-raising campaign next year will seek business and corporate donations and could include grant applications, Pelucca said. County leaders want to see an endowment fund created for repaying the rent and supporting veteran activities, using proceeds from foundation fund-raising events approved by the county.

Foundation and county officials said they remain committed to the mission of the center. Along with providing a gathering place for the estimated 27,000 veterans in Stanislaus County, the center’s doors are open for younger veterans and their families to learn about services and benefits.

The project was put on the drawing board sometime after a proposal for a veterans memorial district was considered and then scrapped in 2012. With voter approval, the district could have created an annual property-tax surcharge to pay for veterans meeting facilities. County supervisors promised to find another way for those who proposed the district.

Pelucca suggested only a small percentage of veterans organizations in the county are aware of what’s offered at the Modesto center. According to its website, the foundation has hoped the services center will revitalize membership in veterans and military organizations.

“Nothing is going to really change, other than the county providing someone to run the place,” Pelucca said. “We just need a lot of support.”

Withrow said the county still hopes the rent money is repaid. “I don’t know any other place in the country has put together a veterans center like we have here,” Withrow said. “We are very positive about where this is going next.”

This story was originally published December 23, 2018 at 2:25 PM.