The Harvard Club of Boston is considering selling its “annex,” the building that sits to the right of the main clubhouse on Commonwealth Ave. in the Back Bay, according to the Club’s president, Nicholas J. Iselin ’87.
The annex contains 17 of the Club’s overnight rooms, a library, administrative offices, the Back Bay Room, and the Boston Room, which is the Club’s main dining room.
The Club, which is open to graduates of Harvard and other “selected affiliate colleges and universities,” according to its website, is a private business that is not affiliated with Harvard University.
Iselin said that in the event of a sale, the Club would keep the Back Bay room and Boston room, the part of the annex that is most used by members. Other than this stipulation, the impact of the sale on the Club depend on the agreement with the buyers.
“We’re going to do everything we can to safeguard the needs of the club,” Iselin said.
Several of the Club’s board members declined to comment on the potential sale.
Iselin said there is a “pretty good” chance of the sale happening, partly because he thought that demand for the real estate would be high.
“What I know of the Back Bay real estate market...suggests that there will be an appetite for what we’re selling,” Iselin said.
Last month, the Harvard Club settled a lawsuit filed by its wait staff alleging that the Club violated the Massachusetts “tip law.” The Club agreed to pay $4 million as a result of the suit.
“The annex has been under consideration to leverage capital for a long time,” Iselin said, adding that while the lawsuit’s settlement “certainly drives home the need for raising capital,” considering selling the annex is not a response to the suit.
Iselin said that he had received a “mixed bag” of feedback from members about selling the annex, but that there was a “productive discussion” taking place.
“Our members are not shy about expressing their opinions, and I’ve gotten a lot of opinions,” Iselin said.
In an Oct. 3 letter to Club members, Iselin addressed some of the concerns and suggestions that had been voiced by members about selling what he called the “underutilized annex space.”
First, Iselin wrote that using the parking lot to raise funds was not a viable alternative to selling the annex, as Boards of Governors have explored the possibility for 40 years, and, “ultimately, the math has not worked.” Additionally, lack of a parking lot would inconvenience members and negatively impact revenue from functions at the Club.
Second, Iselin responded to the suggestion that capital be supplemented by an increase in dues by writing that the increase that would be necessary is impractical and would contradict the Club’s guiding principles of inclusiveness and affordability.
Third, Iselin addressed the concern that losing the annex would lead to a decrease in revenue from overnight rooms and said that the annex rooms are among the Club’s “least attractive, hardest to maintain, and hardest to rent.” He wrote that the rooms are utilized at a rate of only 55 percent and that, largely due to the recession, the Club’s most serious revenue challenge is because of decreased revenue from functions.
“In this climate, we will not make up ground without some significant changes in this mix,” Iselin wrote.
—Staff writer Samuel Y. Weinstock can be reached at email@example.com.