04-10-2024, 04:11 PM
(04-10-2024, 02:40 PM)the_conestoga_guy Wrote: I don't think we should read too much into council poking their noses into lease contracts. I'm sure they were flooded with emails asking them to save the climbing gym, and now they're just paying lip service to appear sympathetic.
One detail I did find interesting was that the gym is on a 5 year lease. I'm not incredibly familiar with how these sorts of real estate deals are handled, but 5 years seems super short. The gym would have projected their income against the up front costs of setting up the new space and would have realized that the payback period was fairly long (I'm assuming years). I wouldn't be surprised if they're only breaking even after this 5 year lease ends. And if they were only offered a 5 year lease option, wouldn't that have been a red flag? Especially considering they're being forced out of their existing space for the exact same reason? I know I'm rambling here, but it certainly appears that the gym weren't totally diligent when signing to take over this space.
In the meeting GRR says their lease is for 5 years with a 5 year extension option, however they need 10 years to break even on the cost of the new climbing walls they're installing in the building, which to me seems strange, why would you not just negotiate a 10 year lease to begin with. Regardless the property is a zone and flip so speculating when construction would start isn't useful, the developer isn't going to admit they're just up zoning it but anyone with a brain can just go look at the developers website where this property is marked as "land banking" and realize it's not going to happen anytime soon, so GRR is relatively safe.