http://paloaltoonline.com/square/print/index.php?i=3&d=&t=1635


Town Square

Does Anyone Know what is happening at the city owned space in the new garage that was leased out to a private company at a $loss to the taxpayers?

Original post made by An Observer on Jul 2, 2007

Several years ago the city paid to have space built in the new downtown garage. They called for bids to lease it out. They rejected a resturant that submitted the highest bid and accepted a low bid from a gym type company, but the bid was so low that the city (taxpayers) are losing money on the deal. It was a long term lease. Does anyone know just how much the city is losing. $$.? Did the original bidder/leaser sublease the building at a much higher price and profit from the deal? Who are the people who own and use the gym? I remember at least one Council member was eager to lease it to this orginazation as he stated " I can walk to that location----".

Are lease rates downtown highter now than then?
Their pliosphy: city Can't wait for new bids to be submitted! Must take low bid quickly.

At the same time the city leases space downtown at a cost of at least $500 plus a square foot for a fairly short time. and I think a cost of over 3 million dollars for 7000 sq ft space. Plus the cost of remodeling the place.

Comments

Posted by Concerned, a resident of Crescent Park
on Jul 2, 2007 at 7:22 am

I don't have any first hand information, but I'm guessing that the gym you refer to is Form Fitness. Every time I go by, there are very few people using the gym. I was a member for a short period of time, but it wasn't, in my opinion, laid out very well and the upstairs machines couldn't comfortably be used with TV viewing. Personally, I think they are not producing the kind of tax dollars for the city that was expected.

There are several council members who live in Downtown North, but that statement about convenience is something I'd inform taxpayers in Palo Alto about. That space should have been leased to the highest bidder if the choice was a restaurant or gym. We have lots of both.


Posted by eric, a resident of Mountain View
on Jul 2, 2007 at 11:23 am

Highest bid/best credit. MV did a similar thing with a new parking garage, leased it to Longs. Some high-end market tried to get a much cheaper deal with aggressive PR, but the city wisely went with the higher, safer revenue.


Posted by RollerEyes, a resident of University South
on Jul 2, 2007 at 1:18 pm

Just be grateful that this deal went down before an even lower bid came along.


Posted by Talo Palto, a resident of The Greenhouse
on Jul 3, 2007 at 5:59 am

Good point Roller Eyes. I am glad we are not paying the gym instead ... (negative lease)


Aaaaaaaahhhhh.. Ploa Atlo

(I too have a rolling eye syndrome)


Posted by Marvin, a resident of Charleston Gardens
on Jul 3, 2007 at 6:50 am

Wasn't the justification for giving the lease to the gym that there were enough restaurants in the downtown area but no gyms??? Now our city council is deciding what the business mix of the downtown area should be.
Our city council in action!!!!!