Council Member Brewer questions BID representatives on landlord rent increase dynamics
Brewer asks how BIDs handle rent increase issues given that landlords sit on BID boards. Ki-Sung acknowledges the challenging dynamic, describes commercial warehousing by property owners hoping for better returns, and expresses support for legislation that could level the playing field.
I'm sorry.
Before you excuse.
Sorry.
I just have one question.
The biggest issue, as far as I'm concerned, is the rent going up 500%.
I mean, I know bids.
I'm very supportive of bids, but I don't want them everywhere because the stores still have to pay.
Landlords don't pay.
The stores pay.
Same.
So my question is, do you run into that increase in rent, even though the owners of the buildings are your board?
So sometimes it's a sort of strange to have that happen.
It's a challenge.
I know bids well.
So how do you handle that rent issue, if at all, that rent increase?
That's such a great question.
We do indeed handle that.
It is a challenging line to walk.
We've tried to connect in places where communication, for example, and negotiation breaks down, which I would say is more common than I would like to admit, but rarer than I would fear.
Yeah.
And this is why I am so fervently in support of this.
I do believe all of these measures are critical.
I don't know that we're going to see meaningful legislation anytime soon that changes the majority requirement of Class A membership on our boards.
But I think that you're absolutely right.
Most of these costs are displaced onto storefronts and businesses and triple net leases.
So that is a meaningful measure, an important step to take to kind of level the playing field.
And as I say, balance perverse incentives that favor displacement and in some cases commercial warehouse.
So a number of our property owners on our district are holding on to properties in the hopes that they can get something better.
They're leveraging it for further investment, bank loans, et cetera, et cetera, so they can expand their portfolio.
That is not...
conducive, I think, to the thriving of the district.
And I think many of our property owners are good actors who know that and are willing to take chances and offer secure leases, longer term leases to our small businesses, but many are not.
And so I think that this is, we can't, unfortunately, because of our makeup, alter that fabric, but we would be very warm to proposals like this that can.
Thank you.
Can I excuse him now, too?
Okay.
You may now be excused.
Thank you.