Library fails to lease retail space. Maybe they are asking too much?

[thelakelander]

Interesting story in the Daily Record today. The City and the library are having trouble attracting a new retail tenant to the old Shelby's spot. A realtor who has successfully leased retail space in downtown (ex. Pho, The Volstead, Downtown Cigar Bar, etc.) believes they are asking too much.  What do you think?

Seaman said leasing the space had its challenges, particularly in how the space is equipped for food service.

When prospective lessees learned there was no kitchen equipment or ventilation hood in the space, she said, "They hung up on me."

She said she had three possible tenants who expressed interest in leasing the space.

One submitted an application and business plan, but Gubbin on Jan. 27 notified the applicant there wasn't enough information to show the operation would financially succeed.

Another challenge was the level of business experience and degree of financial disclosure the city requires before a vendor can lease the coffee shop.

Seaman said the lone applicant submitted 60 pages of information in the application.

"But it wasn't good enough for the city," she said.

Based on her experience in Downtown's commercial real estate market as it exists, Seaman said leasing prospects other than well-established corporate entities fall into the category of what she calls the "first wave" of urban business immigrants.

"It's artists and first-time-out entrepreneurs. It's a whole bunch of art galleries and free use of space. It's people who might have $20,000 (to start a business). The city is asking for a 60-page doctoral thesis. It's unrealistic," she said.

Yet another challenge is the monthly lease rate the city is seeking for the space, which Merritt said is $2,000 per month.

"Most people might pay $200 a month for that space," said Seaman.

Full article: http://www.jaxdailyrecord.com/showstory.php?Story_id=542241

[JaxArchitect]

Given that they've had such difficulty for such a long period of time finding a tenant, they've obviously got to change their approach.  I wouldn't think it's unreasonable for them to lower their rent expectation or to provide the necessary infrastructure (hoods & equipment) in order to entice a tenant. 
It's not that unusual for a landlord to offer incentives to fill a space like this that benefits the users of the larger facility.  I don't know for sure but it's my understanding that several years ago, Vestcor gave Starbucks a very generous lease rate to get them into the 11 East building.  Of course they moved out when that lease expired.  Nevertheless, seems like Vestcor recognized what the City has not.

[KenFSU]

Beggars can't be choosers.

If Starbucks or Einsteins, for example, was willing to commit for 10 years, I'd give them the space for next to nothing and even help them build it out.

Would be a worthwhile quality of life investment, particular if the city was serious about cleaning up Hemming Plaza.

[thelakelander]

I believe Vestcor gave Starbucks free rent for five years.  However, Starbucks closed before the five years were up.

[mtraininjax]

Damn that Hemming Plaza curse!

[ronchamblin]

I remember Shelby's, and enjoyed a few lunches there while renovating my building.  Their main thing was the panini press, offering various types and flavors.  Overall food was pretty good.

In my view, Shelby's failed in part because it lacked ambiance, perhaps because of having too many restrictions via the location -- or perhaps because of the choices of the owner.  Most places, if reasonable qualities exist, will survive and prosper unless there is a critical flaw -- perhaps apparent only after failure.

A critical flaw could be anything, such as having a landlord inclined to push the rent too high once the tenant stabilizes with profit.  A flaw might be not having enough reserve cash for startup.  A flaw might be the ambiance, a silent killer, taking its toll over many months.  A flaw might be the existence of workers who cannot be pleasant, who are too often rude to customers. A flaw might be simply poor management -- affecting employee performance and critical decisions.  Any flaw, if critical enough, can be the cancer so to speak that will gradually kill the business over time.  The cancer can exist at the grand opening, and if not detected and removed, it can, and often does, eventually kill the business.  Most of us can feel or smell probable success or failure in an establishment.

The old Shelby location, if it is to be filled by a successful food tenant, should invest in creating an interesting ambiance, and should, like any business, ensure there are no hidden critical flaws.

Everybody knows that in any business, one must continually remove the negatives and increase the positives -- its like tuning a guitar or an automobile to achieve the best performance.  And most might know that only maintaining a certain level of performance in any endeavor will ensure survival over the long term.

[tufsu1]

There also used to be an issue where that space could not be open different hours from the library itself.  Not sure if that is still the case, but that is a limiting factor.

[strider]

It strikes me as being pretty simple.  It appears the same with many of the city controlled commercial properties, whether they want to lease them or sell them.  Basically, it is a matter of control and unrealistic above market requirements.  Zoning should be the only control of use.  The real market should control rates and selling prices.  When you start doing RFPs and the like with things that are and should be controlled by the existing market conditions you end up with an empty, deserted location.  Name one RFP in the last few years for space like this that actually ended up with what the city wanted. And better for us tax payers than just going with the actual market.

A lesson learned in Springfield was the result of the control exercised by a few and well that worked out, a mostly deserted, abandoned Main Street even before the crash. Ninth and Main should have been sold at market value a long time ago instead we still have an abandoned structure rotting away.

Who cares what a use is as long as it is covered by the real zoning for that space?  Why require a 60 page report when a regular rental for anyone else is 5 pages?  And requiring a lot of experience?  Many highly experienced owners have lost restaurants anyway. 

In this case, it seems like they should make sure there can be access to only that space when the library is closed and not worry about anything else. Let the current market dictate who and what and how much. Everyone will end up better off.