Authority not selling Eight Mile recreation center
March 11, 2013
ROSEVILLE/EASTPOINTE — The Recreational Authority of Roseville and Eastpointe won’t be selling the recreation center on Eight Mile Road anytime soon.
The authority board is scheduled to approve a request for proposals to lease the Eastpointe center at the March 14 board meeting. The decision was largely financial, according to Eastpointe City Manager Steve Duchane, who serves as vice chair of the authority board.
“Our concern was that the market may not present itself with a very lucrative option for us, because the market is still somewhat depressed,” Duchane said.
“If the goals of the authority are to generate revenue, the sale of this property results in the revenue going back to the parent cities, split between Roseville and Eastpointe, and you can certainly say that is a noble cause, but the recreation authority hasn’t finalized its bigger plans, and to unload a very well-rebuilt building that has some value, it may not be the best timing.”
For a lease to be feasible, the authority must secure a one- to three-year lease that, at a minimum, covers the cost of maintaining the building, utilities and insurance, but they are hoping to receive a lease proposal that covers all its needs and generates extra revenue for the authority to use toward recreational activities.
By opting to lease the building rather than sell, the authority maintains control over the building for future use.
That could mean eventually engaging in a long-term lease that generates income for the authority and/or benefits the community — for example, by leasing it for government offices or to a community organization; selling the facility in the future when the economy has improved and it would generate more revenue; or using it for recreational purposes by the authority.
“The market doesn’t drive it as the best point to sell, and is short-term revenue really our goal?” Duchane said.
“Or is it to have some facilities that will be around and under our control and have some other potential uses? Leasing seems to be the best option because it would keep it under the control of the authority and allow us to create changes in the future, depending on how the users create demand or how our plans go.”
The 34,000-square-foot building won’t be right for any business or organization, though. When the city remodeled the building, it did so with recreation and senior activities in mind.
The building comes complete with an approximately 60-by-100-foot gymnasium with a raised balcony for seating, a 44-by-55-foot auditorium with a 25-by-18-foot stage, two office areas, and a sprinkling of classrooms in the basement and on the first floor.
Tony Lipinski, director of the authority, is responsible for maintaining the building for lease or sale. He visits it weekly, doing walkthroughs, watering plants and otherwise just checking in on the facility. He knows the building well.
“The building would be good for any kind of governmental business, youth program, church or businesses that do family or community events,” Lipinski said.
Even though the requests for proposals haven’t gone out yet, he’s already received a dozen calls from organizations interested in the building.
“One church (that called) has a food program and a youth program, and it seems like this building would fit right in with what they are doing, but the lease has to benefit the authority, too,” he said.
To be beneficial, the authority must be able to cover the costs of the building at the very least and the tenant must also be able to maintain a minimum of $1 million in coverage in various types of liability insurance: general liability, professional liability, automobile liability and excess liability. It must also meet the state statute for workers’ compensation and employers’ liability.
It may seem like a lot, but for commercial leases, it’s the norm. Beyond those specifics, the board seems to be open-minded when it comes to building uses, remodels and sub-leases.
Any type of remodel, expansion or addition would have to be approved by the authority, but a draft of the RFP states that tenants are allowed, following board approval, to remodel, redecorate, add on to and improve any part of the building, so long as the work is done in a “workmanlike manner and utilizing good quality materials.”
And if work on the building is considered an improvement to the facility, the authority will most likely support it because their goal is just that the building benefit the authority and communities the authority serves.
“We just want to make sure whatever is in here is, one, good for the community and, two, good for the authority, and just to make a nice fit,” Lipinski said.
The RFP is expected to be released by mid-March and the authority is hoping to have a tenant in the building by mid-summer. For information on the building or to submit a proposal, call Lipinski at (586) 445-5480 or email email@example.com.
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