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Photo by Robb Long
Nami server Christian Gyuen adjusts the window shades for diners at the restaurant.
By Michelle Bruch
Some Downtown building owners making rent concessions to keep tenants in business If this were an ordinary economy, a drop in sales at a restaurant like Nami at 251 1st Ave N. might force them to close down.
But the times aren’t ordinary, and Nami’s landlord is working to keep the restaurant afloat.
“In order to help [Nami] stay in business, we’ve been accommodating them at 50 percent of their rent,” said Robert Timperley, manager of the McKesson building. He made the remarks at a public hearing in early March to protest additional taxes his building will incur from the new Downtown Improvement District.
Ji Cho, general manager of Nami, said the restaurant is negotiating with the landlord and details haven’t been finalized. Other building tenants are also working with the landlord, she said, and even business owners that come in to eat say they are asking for rent concessions.
“I think we’re all kind of hurting right now,” she said. “I think that landowners understand that this is a tough year. If they can help people stay it’s best for them and us in the long term. I think everybody’s trying to do the best that we can.”
At the same Downtown Improvement District hearing, Jeff Robinson, the principal owner of the building at 300 1st Ave. N., said he is also slashing rent for some of his tenants. His largest tenant needed to lay off 30 people in the last year, he said.
“We’ve had to reduce rents temporarily to many of our tenants in order for them stay in business and get through these very difficult economic times,” he said.
“Everybody’s doing it. Everyone is seeking rent reductions,” said Andrea Christenson, second vice president at Colliers Turley Martin Tucker. “Part of the problem is if somebody vacates a space because of financing, it would be very difficult to replace them right now. A year from now it would be a totally different story.”
One building owner who spoke on condition of anonymity said he is giving a break to tenants with seasonal walk-in traffic. He’s discounting for a period of time and adding the full cost back into payments spread incrementally through the duration of the lease.
“So far, so good. It’s temporary help and we’ll see what happens after that,” he said.
Another building manager who declined to give his name said rent concessions are a practical move right now. He figures that other landlords with empty storefronts are probably hungry enough to give his troubled tenants money to relocate and rebuild.
“It isn’t always for the altruistic reasons,” he said. “It’s principally economically driven because we understand how much it costs to redo the space and leave it empty for six months. ... It’s just very basic business sense in our industry to keep people who are paying rent, even if in economic hard times you have to do some accommodations, at least on a temporary basis.”
Welsh Cos. Vice President Nils Snyder, who works with tenants at buildings including 50 South Sixth and the Capella Tower, said lease concessions are hitting retail, office and industrial tenants alike. He said that before landlords sit down to renegotiate anything, they want to see that a tenant is making cuts throughout every area of the business — their salaries, vendors, franchisee payments and equipment leases.
Of course, not every landlord is giving handouts.
Welsh Cos. Vice President Jeff Hegg said the Oracle and International towers haven’t needed to make any subsidies, and most of his tenants are faring OK.
“So far there haven’t been any compelling or legitimate financial reasons for doing concessions,” he said. “We feel very fortunate.”
Martha Anderson of Anderson Property Management said most of the East Bank businesses she manages are doing very well. And those that close down are being quickly replaced — she already has a tenant lined up to move into Fugaise, a French fine-dining restaurant on East Hennepin that closed in March.
Most of the tenants asking for rent concessions are “ma and pa” shops in smaller neighborhoods without a strong retail anchor nearby, Anderson said. But the extra cash might be doing the trick. Anderson has worked on two temporary rent reductions that spanned just two months, and those tenants are already back on track to make full payments.
Reach Michelle Bruch at 436-4372 or mbruch@mnpubs.com.
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Carmichael Lynch drops Harley account
UPDATED August 30, 2010, 2:29pm
By Gregory J. Scott
When it comes to selling muscle bikes, three decades is enough. Downtown advertising agency Carmichael Lynch announced August 23 that it was resigning from its Harley-Davidson account, ending a relationship of 31 years with the iconic motorcycle brand. In a prepared statement, Doug Spong, president of Carmichael Lynch, said, "Our agency leadership came to the consensus that we've taken the Harley-Davidson brand as far as we can. It's in our best interest to part ways." Mark-Hans Richer, Harley’s CMO, said, "Our strategies have been moving away from a singular consumer target and a one-size-fits-all agency solution. Rather than accept this new reality, Carmichael Lynch chose a different path and we respect that." The
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Community notebook :: Florence Court apartments
By Gregory J. Scott
1 Comment
At Florence Court, new apartments up, courtyard staysThe mid-August groundbreaking came and went quietly for the FloCo Fusion Apartments, a chic rebranding of a ramshackle cluster of student housing near the University of Minnesota’s East Bank campus. Despite years of resistance from current residents, the new building is officially going up, fanfare or no. Florence Court, as the community used to be called, is one of the oldest apartment buildings in the Midwest, dating back to 1886. The L-shaped structure sits at the intersection of 10th Avenue SE and University Avenue, but is tucked back from the street, hidden until recently behind a BP gas station. The 33-unit complex surrounds a leafy courtyard, which its residents — a colorful
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Watching out for the homeless
By Sarah McKenzie
// Volunteer outreach worker Jerry Fleischaker honored with prestigious McKnight award //After Jerry Fleischaker’s wife died of Alzheimer’s disease, he came across a newspaper article about St. Stephen’s Human Services’ work reaching out to homeless people with mental health issues. The story inspired him to start volunteering for St. Stephen’s. Now the 79-year-old retired pharmaceutical sales representative volunteers full time for the Downtown-based organization. “My wife died of Alzheimer’s in 2002. I saw the care she needed,” Fleischaker told Monica Nilsson, director of street outreach and community education for St. Stephen’s. “I was haunted by the thought that people might be
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Downtown visioning session looks to 2025
By jake weyer
// Whether to add a park north of Central Library will be part of the discussion, meant to produce a 15-year plan for Downtown //It’s been nearly 15 years since Downtown business leaders got together with city staff and elected officials to hash out a long-term plan for the area. Back in 1996, those stakeholders came up with Downtown 2010, a vision that included such grandiose plans as a new ballpark for the Minnesota Twins, a light rail line along Hiawatha Avenue, a new Central Library, completion of the Target Center and the development of the Downtown Improvement District — all realities today. “We’re standing now, planless,” said Sam Grabarski, president of the Downtown Council. “And a lot of good
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A mountain out of a bronze molehill?
By Gregory J. Scott
// The Sid Hartman statue stirs debate about public memorials Downtown //
OK, no one disputes that the guy deserves a statue. Sid Hartman, the nonagenarian sportswriter who has spent the last 65 years reporting for the Star Tribune and WCCO, is probably getting bronzed. The Department of Public Works is ironing out technical details for installing a metallic Sid replica, complete with TV reporter microphone and newspaper tucked under the arm, right outside of Target Center and a block from the Twins stadium, at the corner of 6th Street and 1st Avenue. The Public Works assessment is the final stage in a roughly six-week approval process to get the statue out into the public. No one’s upset about that. As Nick Legeros, the artist who designed
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Biz buzz :: Construction costing Elliot Park businesses
By Gregory J. Scott
1 Comment
For Elliot Park businesses, street improvements come with a price
True to its motto, Band Box Diner can turn “grease into a feast.” But the Elliot Park gem can’t make much out of the road construction that’s transformed its streetscape into a scarred industrial zone.
The throw-back diner is one of the businesses standing to benefit from a sweeping, 15-block reconstruction of Chicago Avenue South — if only it can survive through to the project’s completion.
“It’s kind of like, if you have a half hour for lunch, and then you get lost for 45 minutes, what are you gonna do?” says Brad Ptacek, who has operated the diner for the last 13 years.
Ptacek’s breakfast
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