Final Board Summary:
Miracle Mile Operating Models
Miracle Mile Operating Models
Three Proposed Models · Financial · Mission · Strategic Analysis
Model Verdicts at a Glance
Option 1
Lease Model
(GRM as Landlord)
(GRM as Landlord)
"Strong financially in the short term, but limited in mission alignment and long-term strategic value."
Option 2
Self-Operated
(GRM Direct Management)
(GRM Direct Management)
"Strong mission alignment but financially fragile without added funding streams and operational scale."
Option 3 — Recommended
Hybrid Model
(Phased Approach)
(Phased Approach)
"Best balance of financial performance, mission alignment, and long-term scalability."
Performance Ratings — All Three Models
Financial — Benefits & Negatives
Option 1 — Lease
Benefits
Predictable annual revenue (~$266K/yr)
No operational expense burden on GRM
Strong immediate return on asset
Minimal financial risk
Negatives
Limited upside — revenue capped
Partnership fee depends on tenant performance
No access to grants, subsidies, or program funding
Option 2 — Self-Operate
Benefits
Full control of all revenue streams
Ability to layer in grants, subsidies, program funding
Long-term upside potential
Negatives
Very thin margin — only ~$15K/yr on current budget
High exposure to cost overruns and occupancy changes
Requires significant staffing and infrastructure
Option 3 — Hybrid
Benefits
Diversified revenue: rent + AHCCCS/HUD subsidies + program funding
Improved margins — $100K–$200K potential
Less dependence on any single revenue source
Negatives
Requires active management of multiple funding streams
Moderate operational complexity
Cultural / Mission — Benefits & Negatives
Option 1 — Lease
Benefits
Allows housing to serve community need
Maintains indirect connection to service delivery
Negatives
Limited control over program quality and expectations
Risk of misalignment with GRM's Homeless to Wholeness model
Low-barrier approach may not drive transformation outcomes
Option 2 — Self-Operate
Benefits
Full alignment with GRM core values: love, grace, dignity, respect
High-barrier model supports transformation, not just stabilization
Strong integration with recovery, workforce, and housing pathways
Negatives
Requires disciplined program execution throughout
Higher expectations may limit immediate access for some populations
Option 3 — Hybrid
Benefits
Aligns housing with GRM's transformation model
Maintains structure and accountability while expanding access
Supports measurable outcomes: employment, recovery, permanent housing
Negatives
Requires intentional alignment between partners
Needs clearly defined expectations and shared standards
Strategic — Benefits & Negatives
Option 1 — Lease
Benefits
Simple, scalable real estate model
Low management complexity
Immediate cash flow supports broader GRM operations
Negatives
Does not leverage GRM's ecosystem: workforce, recovery, services
Weak integration into Center of Opportunity model
Missed opportunity to build a replicable transformation model
Option 2 — Self-Operate
Benefits
Full control of outcomes and programming
Strengthens GRM's Homeless to Wholeness model
Builds internal capability for future expansion
Negatives
Significant operational complexity
Not financially competitive without additional revenue layers
Higher organizational risk if not executed well
Option 3 — Hybrid
Benefits
Fully integrates into Center of Opportunity ecosystem
Creates a replicable model for future expansion
Strengthens positioning for grants, major donors, and public-private partnerships
Negatives
Requires phased implementation over time
Needs strong coordination between housing and services teams
Core Strategic Decision
| Model | Maximizes | Best For |
|---|---|---|
| Option 1 — Lease | Short-term revenue Predictable income, minimal risk, immediate cash flow for GRM operations. | Stability now — while longer-term model is developed. |
| Option 2 — Self-Operate | Mission control Full alignment with GRM values, transformation outcomes, and program integration. | Mission-first organizations with sufficient operational capacity and funding. |
| Option 3 — Hybrid | Long-term impact Sustainability, growth, and scalability across financial, mission, and strategic dimensions. | The only model that consistently delivers on all four: structure, accountability, services, and outcomes. |
Final Recommendation — Phased Roadmap
Short-Term
Maintain Lease Structure
Maintain and strengthen the lease structure with CAH for immediate financial stability and predictable cash flow to support GRM operations.
Mid-Term
Layer In Funding Streams
Layer in subsidies (AHCCCS, HUD) and program revenue. Diversify income, reduce single-source dependence, and begin building operational infrastructure.
Long-Term
Transition to Hybrid
Transition to a full hybrid model aligned with GRM's Homeless to Wholeness mission and the Center of Opportunity vision — integrating structure, accountability, services, and measurable outcomes.
Bottom Line
This is not just a financial decision — it is a model decision. To fully achieve Homeless to Wholeness, the model must move beyond housing alone and integrate structure, accountability, services, and outcomes. The hybrid approach is the only model that consistently delivers on all four.