City raises rent as Downtown grows

Oct. 4—The St. Joseph City Council is raising rates for one of its leased spaces Downtown — a sign of things to come as the area continues to develop.

The city of St. Joseph owns the Missouri Theater, and attached to the building are spaces occupied by the Allied Arts Council and new businesses like Reverie and Lilac Leathers. For years, the city has been leasing that space for $250 a year — a steal in the current market. The city also pays for all utilities except gas and electricity.

However, those rates likely won't last long. In fact, the city was set to approve a contract with Lilac Leathers that would increase the lease by $100 each year until it reaches $650. Instead, the council reached a new agreement with the owner that increases the lease by $200 each year for the next two years.

"In the city government realm of things, you're not out to make a profit, but you're not wanting to lose money and that's what we're currently doing right now," said City Councilman Jeff Schomburg. "I'm just looking out for the taxpayer's best interests and making sure that we are very sustainable in what we're doing and not losing out on money."

Schomburg said the market rate for those spaces in the Missouri Theater is $0.57 a square foot and those spaces are about 1,200 square feet, so the eventual $650 a year still is cheaper than the market rate.

The increase coincides with the rise in development and growth Downtown, which leads to property becoming a hot commodity. Schomburg said the city council wants to make sure it's getting what the space is worth. Chanelle Wilson, the owner of Lilac Leathers, said during the council meeting Monday that she wants to see Downtown grow too, which is why she agreed to the new lease agreement.

"You want to help them get started," said St. Joseph Mayor John Josendale about small businesses. "You want to support them in getting started and as they move along. It's a win-win — they grow, it becomes more beneficial for them and they can afford to pay a higher rent."

Schomburg said the council is going to look at the lease agreements with the other spaces along that stretch of Eighth Street to make sure the rates are "at the current market rate or close to it." But those spaces are occupied by new small businesses that rely on cheap overhead to get by, so the council will have to balance supporting entrepreneurs while also trying to achieve the market rate.

"Being a small business owner, I know starting a business is kind of risky, but the amount that we're charging for those places right now, it's really benefiting those businesses," Schomburg said. "I just want to make sure that we're taking care of the city and the taxpayers' dollars."

Quinn Ritzdorf can be reached at quinn.ritzdorf@newspressnow.com