Remember the old (ugly) Library building up on Harrison? We taxpayers were promised that the building site would be sold to help pay for the new Library building downtown. That promise was broken and the old library building sits empty. But not for long.
The old Library will soon have a new tenant. For the next 11 months, the City of Coeur d’Alene will be leasing the Library to the Salvation Army. This according to Resolution 08-026, set to be passed this coming Tuesday at the City Council meeting. (Go to page 131 of the PDF document.)
The price? Well, un-clutch your heart because it’s not $1/month. It’s not even free. No, they’re charging the Army $1,500 per month for an 11 month lease. That’s not one million dollars.
Granted, initially I was pleased that the City wasn’t giving away this buildling. But then I did some checking.
According to the Lease Agreement in the City Council Packet, the City has set the square footage thusly:
Floor Area: The agreed floor area of the premises is Nine Thousand Five Hundred square feet (9,064 sf), of those premises, with additional sub-structure of three thousand eight hundred fifty-eight (3,858) square feet on the following described real property located in 201 E. Harrison Avenue, Coeur d’Alene, County, Idaho.
That means that the City is charging the Salvation Army a rate of just under 16¢ per square foot (using the “Nine Thousand Five Hundred square feet” areas from the agreement).
A typical lease here in Coeur d’Alene is closer to 90¢ per square foot according to commercial realtors I spoke with. That would put the lease agreement at $8,550/month, which means that the City gave the Salvation Army a heck of a deal! (Remember, the City does not pay extra for property taxes or insurance on the property, and they pass along that “savings” to the Salvation Army.)
Had the City charged the Army a fair market price, the 11 month lease would have brought in $94,050 dollars instead of $16,500. That means (theoretically), the taxpayers of Coeur d’Alene are being shorted $77,550 in rent thanks to the City’s sweetheart deal for the Salvation Army.
dan you should talk to more commercial agents in the area. first, typical is a term people in real estate should avoid like the plague. second, multiple properties in the downtown area can be leased for around .33 per square foot. as they say in real estate: location, location, location.
Comment by reagan — May 3, 2008 @ 9:28 pm
Two agents relayed the price quotes, which were for similar size/areas. If you know of something that’s 33 cents/sqft downtown, can you please provide me with the listing agent’s name? The reason I’m asking is that I was quoted higher rates for downtown leases and the reason I chose not to use those higher figures was to be fair about things. So if you have any raw data, I’d enjoy seeing it.
Comment by Dan — May 3, 2008 @ 10:52 pm
I wondered why no sale sign had been posted on the building. Although not downtown, the location of this building is convenient. The building has a large parking lot as well. Was this seemingly sweet, sweet rental rate the city’s intention all along?
Comment by Susie Snedaker — May 4, 2008 @ 8:52 am
Is this property still for sale? If so, is there a clause in the lease, that a sale would terminate the SA lease? Are your comps on Sherman, apples and apples? Is the old library site as desirable as a business on Sherman. If not, this would make a difference in the per square foot value. And of course the “really big question”, has this property ever been on the market as promised? If not, why not? And is the rent being paid by the SA going to the new library (as profit from a sale would), or directly into the city coffers?
Comment by Diogenes — May 5, 2008 @ 4:07 pm
I’m in the process of getting information regarding the sale of the old building. Stay tuned for another post on this issue.
Comment by Dan — May 5, 2008 @ 4:12 pm
A question I forgot (oh those senior moments). How exactly is the SA going to utilize this building? Business offices? Church? Meeetings? A mini Kroc center…sorry, couldn’t resist.
Comment by Diogenes — May 5, 2008 @ 4:29 pm
Diogenes,
If you follow the link in Dan’s post and start on page 130 of 167, some of your questions will be answered.
Comment by Bill — May 5, 2008 @ 5:28 pm
It looks as if we will be buying that latte a month as (promised by Mike Kennedy in his library bond campaign) for a much longer period of time. Didn’t the council state that the building would be sold and the proceeds applied to the library bond? Now it is disclosed that the building has been used for storage and was never put on the market and will be leased for a paltry amount? I wonder what the savings would have been to the taxpayers had the building been sold and the proceeds applied to the bond as promised. The library issue is fraught with inconsistencies and lack of candor on the part of the administration. But then, that seems to be the way they prefer to do business.
Comment by Susie Snedaker — May 6, 2008 @ 6:29 am