Gananoque council will consider approving staff’s proposal to charge for-profit organizations base rent, plus an additional rate based on the local industry average at the time of the lease agreement.
The discussion was slated for Tuesday’s council meeting at the Gananoque council chambers.
On Nov. 21, staff brought forward a report aimed at providing clarity on a leasing philosophy, to lease town-owned commercial property to new tenants or extensions to current tenants. Council received the report and requested a follow-up report with additional information in order to move forward with a decision.
The following current tenants are categorized in staff’s report as a for-profit tenants: 1000 Islands Kayaking, MyFM Broadcasting Corporation, Sweet Shack, City Cruises.
The following current tenants are categorized in staff’s report as not-for-profit tenants: 1000 Islands Boxing Club, 1000 Islands Chamber of Commerce, Thousand Islands Accommodation Partners (TIAP), Thousand Islands Heritage Museum and the Thousand Islands Boat Museum.
Staff is recommending that going forward, “for-profit” tenants are charged a “base rent” in accordance with the current local industry average rates over the course of a minimum three- to five-year term. Furthermore, staff is recommending scaling the annual rent increases in the agreement based on CPI.
In addition to the base rent, “for-profit” tenants would be charged “additional rent,” staff’s report reads, which covers the operating expenses of the proportional square footage of the leased unit for heat, hydro, water, insurance, maintenance, snow removal, property management, and contribution to reserves. Commercial tenants are charged twice per year for the additional rent based on usage and expenses incurred by the town.
Staff is also recommending amending the commercial lease agreements going forward to ensure the tenant puts all utility bills in the tenant’s name for its unit, where possible. This, the report suggests, will help reduce the burden of administrating and financing additional rent costs on the town.
With regards to not-for-profit organizations, staff is providing four options that council may choose from.
With each of these options, staff is also recommending amending the commercial lease agreements going forward to ensure the tenant puts utility bills in the tenant’s name for its unit where possible.
The options are: base rent (based on current local industry average) plus additional rent (cost-recovery of operating expenses and contribution to reserves for the building); additional rent only (cost-recovery of operating expenses and contribution to reserves for the building, in full, per square foot, per year); additional rent only (at an agreed upon subsidized amount for the tenant, per square foot, per year); or the status quo, which is to negotiate leases on a case-by-case basis.
(Keith Dempsey is a Local Journalism Initiative reporter who works out of the Brockville Recorder and Times. The Local Journalism Initiative is funded by the Government of Canada.)
Keith Dempsey, Local Journalism Initiative Reporter, Brockville Recorder and Times