John Musella admits the SCV Chamber of Commerce hasn’t been on solid financial ground for “at least five or six years, if not longer. It could have been close to a decade.” Blame it on economic downturns or incompetent leadership if you wish, but the fact remains that the current chairman (don’t call him CEO; that position doesn’t now exist) has skillfully maneuvered the chamber into a more solid financial place.
“Chamber bills are being paid in less than 30 days,” he said. “We’re current with everybody. … The SCV Chamber will be 100 percent debt free in the next 60 days. This puts us into a very strong position financially to allow us to move forward.”
When it appeared bankruptcy was the likely option, the 41-year-old Musella didn’t go there. Instead, he followed a time-honored plan: Put your financial house in order first; then start researching what the people really want, and then give it to them, just as long as the financial goals stay met.
“John clearly understood the challenges the chamber was facing and was willing to make the difficult decisions to do what it takes to get the chamber back on track,” Mayor Cameron Smyth said. “Not everybody has that ability or wants to take that responsibility.”
But Musella did, starting with that infamous lease that soon proved impossible to pay. Not only that, but he decided the space in the building on Tourney Road was more than what the chamber needed.
“The office space was more than double the size the chamber needed because, like every other business that went through the Recession, they downsized and remade themselves for where the market is today,” he said during a 45-minute interview at a local Starbucks. “The chamber needed to do that, too. We didn’t need that big of an office space, and we certainly couldn’t afford to pay that kind of a rent.”
Although the SCV Chamber defaulted on the lease and ended up owing $700,000 in unpaid rent, broker commissions, related charges, the unpaid lease balance and interest, Musella was able to reach an agreement with the landlord to settle the matter. The terms are confidential.
“I’m sure there’s lots of people who are curious and what’s involved with that,” Musella said, “but we’re restricted by the terms of the agreement, and 99.99 percent of legal settlements are confidential.”
Musella also made some difficult cost-cutting moves: eliminating the CEO position and cutting staff. Even he isn’t being paid for his 25 hours a week he estimates he’s giving to the chamber.
Then he did to the chamber what he does to his own public relations firm.
“I look at every dime I spend, and I went into the chamber office and I started looking at every dime spent at the chamber, and there were things we were spending money on every month that were … unnecessary,” he said. “For instance, we had two storage units. We were paying roughly $120 a month on each of those storage units. I understand people accumulate things and have to store them, but at the same time, there’s a value to the items in the storage unit, and at some point the cost of the storage unit becomes more expensive than the value of its contents. And so we went and emptied the storage units. We got rid of a bunch of stuff, took the important files back to the office and got rid of those expenses. That’s $240 a month times 12.”
Another example: centerpieces. Musella said people wanted centerpieces for the installation dinner, but he wasn’t going to pay for them. Somebody would have to donate them. Somebody did.
“When you run a small business, people look at every dollar you’re spending because you’ve got to respect the people who are providing you your income and you’ve got to look at every dollar,” he said. “All those small costs start adding up.”
Once the financial situation became clearer, Musella started the second phase of his plan: a questionnaire sent to members and non-members (the Gazette received an emailed copy, too). The questions include what events have people participated in, barriers to participating more, understanding of the mission statement, and ranking the chamber’s effectiveness and importance.
“We want to hear from people as far as what they thought about the programs today and what they think we should be doing or could be doing,” he said, “because what I think may or may not be actually relevant to … the people that enjoy the chamber. … So, I want to make sure we’re hearing from everyone, members and non-members, because we always want to increase membership in addition to maintaining our membership.”
This survey closed Friday. Musella emailed to say that he, some chamber members and business leaders will be analyzing the responses ahead of the third phase of this plan: a strategic planning session Aug. 25 at Princess Cruises to be led by Holly Schroeder, president and CEO of the Santa Clarita Valley Economic Development Corporation (EDC).
Musella said the all-day session – open to the board of directors only – is the first step toward setting short-term and long-term goals. One goal is beefing up membership from 955 now to 1,300.
“We’re going to start at the very basics of the planning session: What is the mission of the organization and does our mission statement accurately reflect where we’re at and where we want to go five years from now,” he said. “Once we establish the mission statement, it’s a matter of going through and talking about how do we implement that mission statement to provide value to the membership and then how do we provide that value to membership while making sure the financial income is there to support the mission of the organization.”
Schroeder, who said she is pleased to help, thinks Musella is a good communicator who will assess the situation and then communicate it to the chamber board.
“John Musella has been a godsend to our chamber,” Councilmember Bill Miranda said. “He took over the reins at a most precarious time and has been able to achieve an unprecedented turnaround. I attribute that to his leadership abilities and his willingness to take problems head-on.”
Musella has a few other tasks to accomplish before his term ends Dec. 31. One is to find another location. The city has given the chamber free digs in City Hall until Nov. 30. Musella said he’s confident the chamber will be gone by Nov. 1, giving him a 30-day cushion.
“We have some office space leads,” he said. “It takes time to find that space because the square footage we’re looking at is the 1,300- to 1,400-square-foot range. … Most offices are 2,500, 3,500 square feet for a small office. That’s where a lot of vacancies are at, so to find something in that 1,000, 1,500-square-foot range is a challenge. There’s just not that many options. We’ve found some and we’re working on a deal.”
Then he has to choose the next board chairperson, and he hopes that by the first quarter of 2018, the chamber will either have hired a new chamber head or will be actively searching for that new leader. He isn’t sure that last goal will be met.
If that is the only goal that he fails to reach, his winning percentage will still be very high.
“I’m very appreciative he has the talent to do the job,” former chairman Curtis Woods said, “but also he has the time away from his business to get everything settled.”