Response to Question on Rents: Downtown Lake Worth vs. City Place

More on the whole charrette presentation later, but I wanted to get this up early.  I received an e-mail this morning regarding the comparison to rents between downtown Lake Worth and City Place.  Here is the question and my response:

Question: One thing I want to ask you about was the rents in our downtown.  They claim that our landlords downtown charge more than City Place (over $25/sq foot. if I remember correctly).  Does City Place get tax incentives from the City or County that allows it to charge cheaper rates?  I thought City Place was over $30/sq. foot. 

Response: I don't think there was much of question and answer session, so you didn't miss much.  Some people stayed and talked with the team individually.

I don't know about your opinion, but I think we really got a lot of good information to work with from them.  It was good to have someone come in here from "outside" and tell us about the underachievement of our potential in relation to the market.  That must have made dent in some heads last night - let's hope.

RE the rents downtown.  The comparison to City Place was very revealing.  Rents at City Place - or any retail location like that - would have a range.  I imagine that would represent the middle of the range there.  Restaurants and bars tend to skew the rents higher if there are a lot of them in one area - like our downtown.  That can exclude many traditional retailers who just cannot match the high dollar volume of eating and drinking establishments.  I actually learned that from Robert Gibbs four years ago when I took one of his continuing education classes at Harvard.  So, to some degree, I think that explains our high rent expectations in the downtown.

But, I do think we have to look at the landlord(s) downtown and work with them to charge more realistic rents to entice other retailers here.  One large landowner is Cimigilia.  They contributed to my campaign.  But, from what I have heard, they can be hard to deal with and have held up other downtowns like ours by holding out for above market rents.  They also touched on the need for management of the downtown to coordinate store hours, promotions, etc.  That is not being done right now - and at those rents a quality retailer would expect that.

We also have such a black eye in relation to public perception about how awful it is to do business here - building department, politics, etc..  That doesn't do us any favors.  In the mean time, we are content to burn fossil fuels by driving all over Palm Beach County to meet our retail needs.

There is no subsidy given City Place to lower rents in relation to the market.  The value there was created early by the City assembling the land and facilitating the project.