Publication Date: Wednesday, September 15, 2004
Gym awarded downtown lease
Gym awarded downtown lease
(September 15, 2004)The future of a controversial downtown hot-spots got some degree of resolution Monday night.
Despite an offer from a "Johnny-come-lately," the City Council officially awarded a subsidized lease for a city-owned building to a gym. And despite concerns that a "gift horse" might actually be a "Trojan Horse," the council authorized city staff to study the costs of redeveloping Lytton Plaza.
At two earlier City Council meetings, the elected officials sparred over the future of the city-owned two-story building at 445 Bryant St. Against the advice of city staff, a split council conceptually chose a gym, Form Fitness, that would pay $1.85 per square-foot a month the first year. The gym was chosen over a restaurant that offered to pay more.
By the same 6 to 3 vote Monday night -- with council members Vic Ojakian, Hillary Freeman and Jim Burch in opposition -- the council officially awarded a 10-year lease to the gym on Monday night -- but not before some officials reconsidered their earlier reconsideration.
That's because a new gym, Heptagon Individual Fitness, sent a last-minute letter to the council Friday offering $330,000 more during the life of the 10-year lease. That appeared particularly enticing to council members because Form Fitness' offer would require a $400,000 subsidy for the first seven years, since the rent would not cover the cost of repaying the bond used to construct the building.
Over the 10-year lease, Form Fitness will pay $2.8 million for the 7,410-square-foot building. Representatives for Haptagon said they hadn't applied originally because city real estate officials told them an offer of less than $3 a square foot a month would not be considered.
The council had a "fiduciary responsibility" to get as much money for the public building as possible, Ojakian argued. Profits from the lease were planned to go to teen services, since the building replaced a teen center, he recalled.
The council, however, could not simply accept the new, higher offer from the second gym. Its only other option was to reject all initial bids, and open up a new round of bidding. The six council members who supported Form Fitness felt such a move would be unfair.
Form Fitness is now scheduled to move from its current downtown location on Forrest Avenue to Bryant Street near the end of the year.
-- Bill D'Agostino
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