Town request for rent pushes it over the edge. Others express concern
By Mark Reaman
Crested Butte’s effort to update leases and rental rates with tenants in commercial spaces owned by the town is getting some blowback. The county clerk has given notice that it will no longer use the space in the Crested Butte Town Hall for motor vehicle registration services after the end of the month.
The Mountain Theatre appealed to the council at Monday’s meeting to seriously consider the impacts of raising rents on lean non-profit organizations before approving the changes.
The town has 26 unique tenants in 14 different locations. Of the 26, 16 do not have a current, signed lease in place. That is what started the conversation earlier this winter. The council passed a resolution in January addressing the issue, and the intent was to have no rent increase in 2017, with modest increases in 2018 and 2019 until lease rates reach $2 to $6 per square foot per year, depending on the location and whether or not utilities are paid by the town. Rent would be on a sliding scale so that tenants in larger spaces would pay a smaller per-foot cost.
No need to remember if it’s Tuesday
One of the first big ramifications of the town action is that the Gunnison County Clerk’s office has decided to close the motor vehicle office in Town Hall.
The clerk’s office has had a one- or two-day a week presence there since 1999 but Gunnison County clerk Kathy Simillion said it doesn’t make sense to pay the town to provide a service to their own citizens in the north end of the valley. The motor vehicle office will be officially leaving the space at the end of this month but, given the calendar, their last day in the space will be Tuesday, March 28.
“The clerk and recorder’s office takes pride in the quality of services we provide to the citizens of Gunnison County,” said Simillion. “The recent decision made by the Crested Butte council to charge a rental fee for our use of space in the town hall is unfortunate for the north valley residents. However, the Gunnison Motor Vehicle main office is open Monday through Friday from 8 a.m. until 4:30 p.m. Vehicle registration and renewals may also be completed online at Colorado.gov/renewplates or by telephoning our office at 641-1602.”
The town had notified the county by letter that the council had implemented the new policy regarding the renting of town space. While prioritizing non-profit groups and governmental organizations, the policy asks that town staff negotiate leases that “adequately [cover] the cost of routine operations and maintenance and some portion of anticipated capital improvements.”
After a “ramp up” period of a couple of years, the town asked the clerk’s office to ultimately pay $5.40 a square foot starting in 2019 and expect a 1 percent annual increase after that. They requested a $250 security deposit as well. Under that arrangement, the annual lease in 2018 would be $794 and in 2020 it would be $1,603.48.
“It was time for the town to get the leases in order since the majority of the tenants didn’t even have an active lease,” explained town manager Dara MacDonald. “The council gave clear direction to begin the process of formalizing leases and bringing them into compliance and that is our goal. We are in the midst of discussions with each of the tenants and, like the letter we sent to each of them says, the town staff is seeking to find a balanced approach for our non-profit tenants that fit their finances while also exercising reasonable prudence in recouping expense associated with maintaining these public assets.
“As for the motor vehicle office, we look at the service provided by the county clerk as valuable and hope they reconsider their decision,” MacDonald continued. “We were told by the county manager that they were looking at closing the office anyway before we sent the letter. Space is at a premium in the Town Hall and given the direction of the council we didn’t feel $1,600 a year for that space was an undue burden.”
Council perplexed by motor
Councilmembers were upset at the county’s decision when they learned of it Monday. “That is extremely disappointing. It sounds like so much of national politics right now where decisions are made strictly on a bottom line financial basis,” said councilman Jim Schmidt. “The county manager seems like he relies on the bottom line above all else. I wonder if he wants to build a wall. The thought of having to drive down to Gunnison to register your car is a hassle. It doesn’t seem like they are recognizing a large part of the county population living up here.”
MacDonald pointed out the decision was probably made by the county clerk and not the county manager.
“If the $1,600 is the reason for them closing that office, that’s not just disappointing—it is alarming,” said councilman Chris Ladoulis.
“You can do a lot more online in that area now, including getting your plates,” said councilman Roland Mason.
Crested Butte resident and former county commissioner David Leinsdorf suggested the town send a joint letter with Mt. Crested Butte to the county asking them to reconsider the decision to close the office. The council agreed to do that.
Simillion said the office serves about an average of 25 people per day when it is open in Crested Butte. The plan was to go back to having the office open two days a week starting on May 1.
Simillion said the office in Crested Butte processed about $300,000 in tax revenue a year but that revenue was split between multiple state, county and town entities such as the Colorado Department of Revenue, the RE1J school district and the RTA.
“We figured that the office already costs us about $20,000 annually when you factor in staff time, travel costs, the phones and janitorial services,” said Simillion. “While we like being able to provide the service to citizens up there, to pay rent on a building that is not even ADA [Americans with Disabilities Act] compliant didn’t make sense for us. To pay more money to provide such service just doesn’t make sense to us and it is disappointing.”
Simillion said the office conducted a random sampling of Crested Butte residents to ask if this closure would present a hardship to them. “Their answer in each instance was no,” she explained. “We heard overwhelmingly that people travel to Gunnison often for other services. But we try to inform everyone of the online renewal service available to them as well.”
Other county impacts include health and library services
The county is also being asked to pay rent for a 100-square-foot space used by the Health and Human Services Department. The town asked the county for rent of $600 per year with a security deposit of $100. The proposed phasing would start in 2017 at $300 and go to $600 in 2019 with the 1 percent per year increase.
County manger Matthew Birnie said they are looking at the lease requests on a case-by-case basis.
“The Clerk has decided that this extra cost (along with travel expenses and lost staff productivity while they travel) tips the scale toward a decision to discontinue the service,” Birnie said regarding the decision to close the DMV office. “It looks like we will likely decide to retain the small space we have for a Public Health presence up valley. I believe the town will still let us use Jerry’s Gym for flu clinics whether or not we have that office there. They have not indicated that they intend to start charging us for that use.”
Public Health served about 600 customers in the Crested Butte Town Hall in 2016. Approximately half were for vaccines administered to north valley residents and the other half was for giving flu vaccines before winter.
A grey area is the Crested Butte Library that is on the list cited by MacDonald. The Crested Butte Library is being asked to pay about $8,300, once the rent goal is reached.
“The library is a distinct case,” explained Birnie. “The library is a special district, so it is an independent governmental entity. However, nearly all of the library’s funding comes from the County General Fund. As such, we would not be excited about the town charging much rent for the library as that will come directly out of the budget for library services. The building has always been the town’s contribution to the provision of library services in Crested Butte. I see the library as a distinct case from the various non-profits using town space and even different from the small spaces used by the county to provide services for years. The library pays its own utilities and maintenance and has invested quite a bit in the building.
“More important, the building has been Crested Butte’s contribution to having a library in town from the beginning and charging them more than nominal rent would be a significant departure,” Birnie continued. “We hope that the town continues to see value in collaborating to provide that service in Crested Butte by continuing to make the building available for a nominal cost at most.”
Harry makes a point
Crested Butte Mountain Theatre executive director Harry Woods spoke to the council Monday about the proposed rent of $4,800.
“Think about what you all supported in the work session with the Creative District a few minutes ago. The mayor said the town has to step up and support the arts,” he said. “The town has been a great partner with the Mountain Theatre and we have been in that Old Town Hall space for 20 years. For a town this size to have a live community theater is something special. I’ll tell you that a rent increase will impact a non-profit like us that doesn’t make money. I understand you need to formalize the lease; however this rent increase will severely impact our bottom line.
“Fundraising is really tough for everyone in the local non-profit world,” Woods continued. “Things like the Mountain Theatre are a jewel for the town. So think about the benefit of that rent money to the town and then think about how having that money can benefit a group like the Mountain Theatre.”
Other nonprofits taking a rent hit because of the large spaces include KBUT ($6,900) and the Crested Butte School of Dance ($8,900).
“We understand that no one likes to see an increase in rent but we are doing what we can to stay fair to the tenants and the citizens of town who own those spaces,” summarized MacDonald. “As we have said, we are very willing to work with each organization to make this as easy a transition as possible.”