Neat. So we’ve established that free buildings still aren’t free.
Discounted rent would be nice, but if it’s anything like Carrollton was supposedly talking about a year ago, the buildout was going to be staggering and it was going to be in a worse neighborhood.
If you’ve got a line on something awesome-er than where we’re at that’s going to be ready to go in ~24 months, I’d let the Board know. But with vacancy rates dropping and commercial rents rising, I suspect that we’re going to be looking at a more conventional lease in 2 years. It’s unlikely that we’ll be in a position to buy, nor do I suspect that we’ll be willing to save large sums of money to be able to afford buildout on any donated facilities that might happen to land in our lap.
Economic development corporations and city councils have substantially different previews, goals and flexibility. Economic development corporation boards will operate under either type 4A or type 4B state law. 4A boards are pretty restricted to things that grow primary jobs, or infrastructure to support economic growth. 4B can do everything 4A can, and adds quality of life amenities. But it can still be a challenge of alignment. Some 4B boards only do parks.
City council can do a lot more, but for public amenities like I think this would be viewed, they often come with stings like requiring discounted rates for residents.
The above comments about how unusual it is to have as many parking spaces as we have should cause us to recognize that we have a very a very good situation and we may be here a long time. How do we make this sustainable?
Limit membership.
Watch for nearby space to become available to move some operations there. If this is a possibility, specific plans should be made early. Who gets to stay could become a long discussion.
Open a branch.
Cooperate with the landlord on parking so they don’t want to get us out.
Is becoming mentioned more often as a solution for problems other than parking problems.
We are watching, we asked for first option when negotiating our lease. We are also setting aside funds for moving. Landlord would only grant for space adjacent to us. We are also watching the area around us.
I assume the “who gets to stay” is referring to committees that would move to additional space.
Has been discussed. But the where is an issue. I believe there have been some struggling new Makerspaces that have approached us about being absorbed before I became on the BoD.
This isn’t an option for us. Should be stated as “We will comply with terms of our lease that we agreed to.”
What about finding a car dealership that has gone under (like the one just off of the SB Valwood Exit on 35). There’s typically a TON of parking, Maintenance bays that are well electrified, probably has an auto lift or two already installed, and typically very accessible all the way around.
Excellent idea, but in this area, they’ve rarely “gone under” and have usually participated in “forced moves”, like the one off of the SB Valwood Exit on 35.
Its one thing to think about though, when new highways are built, they end up creating new good spots and new bad spots, especially for businesses that rely on highway visibility,
As I drive from the Terrell area to get here, I’m partial to this option. I’d love a satellite MakerSpace in Mesquite or somewhere and I think it would attract further members that live in east Dallas County.
All that marginal commercial real estate on the west side of the highway has likely disappeared over the last couple of years for a reason - i.e. the just-vacated Chevy dealer is surely being eminent-domain’ed for right-of-way.
When I was looking into the matter on the last board, one of the properties for sale was an abandoned RV dealership in Lewiville on I-35 (aerial) (street view). Abundant parking, almost certainly adequate power, fenced property, entire space was air-conditioned if I recall, and it was something close to 30k ft².
The astute of you will play with the slider in street view and note that for the entire ~5 years of history on that site it’s been vacant, suggesting that there will be a appreciable refurbishment. It was also being sold, meaning we’d have to come up with some serious scratch - asking price was something like $1.6 million the one time I saw a price last year.
And after some googling, looks like it’s still listed on Henry S Miller and Loopnet.
Edit: As it wasn’t obvious to all, it isn’t as simple as 1 number, there are a lot of catches to owning property. The mortgage calculator doesn’t include, mortgage insurance, a party willing to take the risk against their future credit, taxes, facility expenses, build out, moving costs, ect.
We would need a down payment
$1.600,000 X 20% = $320,000
In addition to rent, we would potentially pay taxes on that property. And estimated $33,000 annually or $2,750 monthly. While non-profits are exempt from property taxes, I think we could expect a challenge to our non-profit status if we take 1.6 million property off the tax rolls.
There are the maintenance costs we would have to assume, ie when the AC breaks we would be on the hook for the full cost, not just our $1000 per unit per year
We would have five figure costs (at a minimum) getting the property wired and configured the way we need it
We would have five figure costs moving our equipment to the new location
We would loose revenue from lost membership during the transition period.
We simply don’t have the cash, nor credit rating to purchase, move, and setup. In fact we don’t have the resources to do any one of the three, much less all three without draining ALL of our reserves.
BTW, for those that don’t know, DMS current has no credit in its own name, and hence no credit rating.
Commercial property loans tend to be structured very differently than personal home loans. Some do have longer periods of payment, I’ve seen some with terms of 20 years. But, they tend to be amortized loans far beyond the payment period. So say we made an offer on the property we are talking about, odds are we would get a 5 to 7 year loan that is amortized over say 30 years. So we would make payments of the same amount as if we were paying the loan over 30 years, but we would have a very large balloon payment of the remaining loan at the end of the term of the 5 to 7 year loan.
If you want some fun reading, here is an article I found on google that reinforces my experience.
That all said, this is one of those places that a city council can often stick their head in and help out. As soon as the Garland Makerspace (currently planned to be funded by Garland) is up and running, we will have a period where other cities in our area will want in on the action of a city sponsored makerspace. Because when it comes to politics, it is all just a dick measuring contest between the different cities. At that point the DMS will be a prime option for a city wanting a jewel in their crown. As we are already working and making revenue, one of the largest makerspaces in the country, and are looking to grow. This might hit in perfect time with the end of our current 2 year lease extension. As I would guess it will take garland makerspace about a year and a half to really become something that starts to compete with us. But, it will take a lot of luck to even get there, as cities look at us under the idea that we can fit into their system like a library. We are not that. The library is a strict service to the community and effectively treats everyone as a customer. Makespaces just don’t work that way at our cost level.
Let’s say someone I know was willing to buy the building outright for cash. Would DMS be willing to pay $12,500 a month or more for rent for a minimum of 10 years? Would DMS assume responsibility for build out if we could build it out OUR WAY? We might even be able to write up a lease with an option to purchase in the future.
Alternatively, what if we formed our own Real Estate Investment Trust and sold “shares” of the trust to DMS members. This would still probably require a long term lease from DMS at more than the current rent. (Ideally, it would be at prevailing market rates)
We might even make it available for investment into people’s 401K or IRAs. Yeah the return on the investment and therefore rent would have to be more than the 4% quoted for a loan, but if we put this to our membership it might be fun to explore.
Of course, a lot of financial analysis would be necessary before we did anything. Who knows maybe the owner would be willing to take a second on the property, too if he had a long term tenant. Real estate usually appreciates more slowly than the stock market but is usually a pretty sound investment. My brother bought some commercial property in Austin that has quadrupled in price in the last 30 years.
I have a friend in commercial real estate who I can contact if we’re seriously interested in the property.
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