The AFM maintains our headquarters in the heart of Manhattan’s Times Square (often referred to as the “crossroads of the world” and best known for the ball drop on New Year’s Eve). We also maintain offices in Los Angeles, Toronto, and Washington, DC.
Recently, our AFM West Coast Office in Los Angeles moved, along with AFM Local 47, to the local’s new office building in Burbank. We previously leased space from Local 47 in their old building and we will continue to lease space in their new building located at 3220 Winona Ave., Burbank, California 91504. While there may be some hiccups during the transition, we are making every effort to keep the workflow moving and the communications open. Currently, 12 employees work in the AFM’s West Coast office.
Our Canadian office in Toronto has 15 employees (including Vice President from Canada Alan Willaert). This office handles the national Canadian issues for all 10 Canadian provinces and three territories. This can be enormously complex as the labor laws in Canada often differ province to province.
Our Washington, DC, office coordinates all our legislative activities. AFM Diversity, Legislative and Political Director Alfonso Pollard, our official lobbyist, and Sandra Grier work to promote our legislative agenda, while building relationships with our elected representatives.
I am often asked why the AFM keeps our headquarters in New York City. After all, NYC is crowded and expensive. Indeed it is, but this is where the labor community is located, not to mention many employers with whom the AFM negotiates. Another exceedingly important reason for staying in NYC is our experienced and valued staff. Any move outside Manhattan would certainly mean losing a number of employees who bring years of experience, knowledge, and understanding of the music business to their work each and every day. Currently, we have 33 employees working in the New York Office, including AFM President Ray Hair and myself.
For years, we have had the desire to own our headquarters office space, rather than lease. Ownership builds equity and any extra space can be leased to third parties, which will generate revenue for the AFM. While owning an entire office building in Manhattan is beyond our means, purchasing a floor in a building may be possible.
A few years ago an attempt to purchase a floor in an office building was scuttled because the burden on our cash flow created doubt about our ability to meet all our financial obligations. We just couldn’t swing it. Today, we find ourselves in a somewhat improved financial position. Make no mistake—there are plenty of things that can quickly affect our financial position negatively.
However, there are good arguments to move forward with a purchase at this time. The lease of our current space will expire January 2019. We will have to move out of our current space regardless of whether we stay in the same building. The landlord has told us that a tenant wants to take over the entire floor, including the space we currently occupy. We would need to move to a different floor, even if we decide to stay in the building.
Additionally, the rent will go up considerably. Looking at purchase projections versus leasing, the first few years after the purchase things will be very tight financially. This is particularly the case in year one when we will be paying rent for our current space, while the interior construction build-out takes place in the newly purchased space. But as we get into years three through 10, purchasing becomes more advantageous when compared to leasing. Keep in mind, with each year of ownership, our equity in the purchased space grows.
This may well be the only opportunity we have in the near future to own our space. Interest rates are quite low and a space that meets our needs is available. At this writing, it is far from a done deal. We are still negotiating with the owner. Any purchase will be contingent on presentation, review, and approval by the AFM International Executive Board. I’ll keep you posted as things progress.Read More