Draft terms for Downtown Vision Inc.’s plan to lease space and move its offices to the city’s Duval Street Garage show an initial 10-year deal with in-kind rent payments.
The Downtown Investment Authority board voted 7-0 on Nov. 17 to issue a 30-day notice of disposition for the 20,660-square-foot space before its staff completes lease negotiations with DVI.
The city built the six-level garage in 2005. DIA CEO Lori Boyer said during the meeting the space has been
underused and not renovated for years.
The garage is at 33 W. Duval St., not far from DVI’s current offices at 214 N. Hogan St. in the city’s Ed Ball Building.
The nonprofit DVI was created in 2000 to provide advocacy and services to a business improvement district in a half-square-mile area of Downtown’s core. Its boundaries have been expanded to 1.3 square miles on the Northbank and Southbank.
Its Downtown Ambassadors greet visitors and are assigned to help to keep the area clean and safe.
DVI CEO Jake Gordon said after the meeting that filling the space matches the nonprofit’s overall Downtown strategy.
“I think it shows the partnership in us trying to hit all the goals of the DIA and also our goals at DVI, which is to create energy in these underutilized areas and assets on the streets,” Gordon said.
The deal would allow DVI to lease the space for 10 years with two five-year renewal options.
According to the draft term sheet, the deal is an in-kind agreement, meaning DVI would not pay rent and, instead, report services rendered to the city.
Boyer said DVI would have to report value beyond what it collects annually from a surtax on Downtown commercial and residential properties.
She said the leasable space was appraised at $14 per square foot.
City code requires the DIA board to issue the property disposition notice to allow for other bids from interested developers. If no one comes forward with a better deal, DIA staff can complete the lease negotiations in late December.
In addition to the lease, DIA and the city Office of General Counsel will have to reach a disbursement agreement. That is for the city’s portion of the build-out costs paid from money set aside in the 2021-22 Capital Improvement Plan approved by City Council in September.
The plan reserves $2.21 million for the build-out, but Gordon said in October that he is unsure if that total will be used.
Council must approve both agreements before DVI can begin the build-out.
The city is reviewing a permit application for almost $1.78 million of interior work of about 16,500 square feet.
Gordon said Nov. 17 that the remaining square footage is access corridors and the loading dock area.
The draft lease says DVI will be allowed to complete any tenant improvements to the space.
Plans show an eventual entry hall, a retail use where DVI plans a merchandise store, restrooms, meeting room, training space, break room, offices, open work area and more.
Gordon said it is unclear when DVI would be able to move into the space, but he said a conservative estimate would be this time in 2022.