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Palm Coast Council Has No Objection to 10% Rent Increase at City Marketplace Offices

| June 24, 2014

Palm Coast offices occupy the third floor and the first floor of Building B at City Marketplace, with Hollingsworth Gallery and City Repertory Theatre sandwiched in between on the second floor. (© FlaglerLive)

Palm Coast offices occupy the third floor and the first floor of Building B at City Marketplace, with Hollingsworth Gallery and City Repertory Theatre sandwiched in between on the second floor. (© FlaglerLive)

After threatening to leave City Marketplace over a proposed lease increase that would have gouged city coffers, the Palm Coast City Council on Tuesday had no objections to a new one-year lease proposing to increase rent by 10 percent, down from 57 percent in the original proposal. That means city offices will stay put at City Marketplace through next fall, when they are scheduled to move to a new city hall at Town Center, now in its design phase.

“Our current lease is $20,000 a month, or $240,000 a year, that is all includive,” City Manager Jim Landon said, “and it expires August 31. We are hoping to be out of here in the August September timeframe of 2015. This proposal would be a one-year extension with a 10 percent increase, or $22,000” a month. The proposal is all-inclusive, meaning that it does not include CAM, or Common Area Maintenance, fees–nor will such fees be imposed on the city.

“I wanted to stess that here recently the tenants and actually other property owners received notice from the association that is responsible for the common area that their fees for the common area, better known as CAM fees, are going up substantially,” Landon said. “We do not have CAM.”

The City Marketplace property owner has imposed a CAM fee increase of 212 percent on the Flagler County Sheriff’s space at City Marketplace, an increase the sheriff is contesting. Steeper CAM fees have been asked of other tenants.

Landon was recommending approval of the new lease because it would be cheaper to pay the 10 percent rent increase than to pay moving fees to temporarily relocate offices elsewhere, before the final move to Town Center.

Backing Down, City Marketplace Landlord Reduces Rent Hike on Palm Coast to 10%

June 17–No one has ever faulted City Manager Jim Landon for not being a shrewd negotiator. Either his skills paid off for the city, or John C. Bills, the City Market Place landlord, came to his senses after first proposing to raise the rent on the city’s office space by $138,000 for the year. Palm Coast officials termed that proposal “unacceptable” and were ready to move out, even though they need the space for only one more year or 15 months, now that the Palm Coast City Hall at Town Center is in design and will soon be under construction.

The two sides this week have worked out a lease agreement that would raise Palm Coast’s rent by $2,000 a month, to $22,000, but also reduce Palm Coast’s space modestly, by 1,278 square feet, from a total of 22,200 square feet currently. That reduction in space–unit B-103–does not affect city employees or services. It’s a storage unit that the city agrees to give up.

“I’m pleased to announce that we have a tentative agreement that we will present to you at your workshop next week that is just a 10 percent increase in our rent where we are today, versus the 57 percent increase that they were proposing,” Landon told the city council Tuesday morning. “I think that’s a very reasonable increase after being in there for I think, three years? No actually we’re at the end of the sixth year, the second three-year term. So you’ll be presented that with the idea that we won’t have to be relocated temporarily.”

The new lease would be in effect from Nov. 1 through Oct. 31, 2015. But it makes no provisions for the city needing the space after that. City Hall is scheduled to be completed sometime next fall, but it could be late fall, and possibly early winter, before the city can move in, depending on how close to the scheduled completion date the contractor can remain.

Palm Beach Gardens-based John C. Bills Properties bought City Market Place in November 2013 for $2.9 million, a few months after buying Roma Court, another troubled commercial development that was built just as the housing boom crashed, and that has strained to fill its spaces ever since. The new City Marketplace landlord then distributed new lease terms to tenants, many of whom–among them Hollingsworth Gallery and Mia Bella Dance Academy–were shocked by the requested increase in rent.

Palm Coast had considered parceling out its office spaces between its utilities offices and space it would have leased from such places as the old News-Journal bureau on State Road 100 and storefronts in a Winn-Dixie shopping plaza. Having those possibilities–and outlining them publicly and noisily during a previous city council meeting–gave the city a stronger negotiating position against Mills, who could have been left with more than 20,000 square feet of gaping space in a matter of weeks, and a dearth of tenants to fill it.

The draft lease agreement appears below.

Draft Lease Agreement, Palm Coast-City Marketplace

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13 Responses for “Palm Coast Council Has No Objection to 10% Rent Increase at City Marketplace Offices”

  1. Gia says:

    This is not an agreement. Bad deal again by PC gov. yoyo’s. There was no reason to raise the rent except for the landlord to be greedy $ these yoyo’s get their feet in.

  2. A.S.F. says:

    John C. Bills…What a Guy.

  3. Talking about more and more, thinking about less and less says:

    The facility is a dump. The city shouldn’t pay any increase at all.

  4. Carl says:

    Guess the truth can`t be printed , they are weaseling out of paying back illegal cam tickets , and they have been ripping us off by grossly abusing the red light cam system by installing 47 in a town this big and rigging the lights to get us stuck at each and every one , not to mention stealing money out of utility funds and raising our rates to make it up, and God only knows how much they will skim off this City Hall sham and its only phase one, they could buy the Tribune building , but can`t get kickbacks and charge tax payers three times material cost on a building already built. And lets not forget all the multiple businesses in town 4 McDonalds, 5 Publix , 10 Kangaroo`s, 3 Walgreens , 3 CVS`s , 4 of each Bank, you don`t think they are getting paid to monopolize this town?

  5. confidential says:

    They should have bought the City Market Place for mere 2.9 million and would have paid it off with the rent income from the current renters plus the saving of the city lease…and we the tax payers should have financially won. But No, they decided to build their luscious city hall against the taxpayers wishes instead for a whooping 10 millions that will be double probably at the end…plus the incoming huge maintenance cost! All just to benefit the elite and the all nice and healthy graft.

  6. confidential says:

    By the way the city market place complex is very nice as has an all around gallery to protect us from the scorching summer sun and or rain…something that ugly Town Center does not have! Bunch of box uninviting franchise stores sticking up like an eyesore thumb that I do not sponsor! I do not waste my gas driving those 10 miles to grill my car and self while shopping and by shear luck have one of those fly boys/girls missing the runway or over malfunction aircraft crashing on us while shopping one of these days.

    • Biker says:

      Really??? It is apparent you know very little about city market place. It is so poorly designed and constructed that nearly every unit leaks when rains.. Which lead to mold being detected throughout. If it is such a wonderful location then why is it 90 percent empty?

  7. Someone Else says:

    Remind me again where the city get the money to pay bills with.
    When the corrupt leadership of Palm Coast decides it has no objection to paying 10% more, please remember they are actually saying that they have no objection to YOU paying 10% more.

  8. tulip says:

    Actually, paying 10% more would be acceptable. Otherwise they would have to lease another place and who knows what that rent would be, plus all the expense of moving everything to another location and the cost of setting up phone and internet services, etc. then, at a later date, the cost of moving again to Town Center.

  9. Talking about you, I do mean you! says:

    Take it out of Landon’s salary. He makes too much anyway.

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