Clearing up rumors on commercial leasing in The Village
 

(As appeared in The Villages Daily Sun)
Talking with Scott Renick
Renick is The Villages director of commercial development


Posted: Wednesday, May 17, 2017 3:00 am | Updated: 3:07 pm, Wed May 17, 2017.
By DAVID R. CORDER
Daily Sun Senior Writer

Scott Renick has worked with The Villages Commercial Development Division for 11 years, and the last eight years as its director.
He and his staff are responsible for recruiting new businesses to the community, negotiating commercial leases and determining whether a prospective tenant has the long-term wherewithal to serve
the residents.
Sometimes, however, businesses fail; and, over the years, Renick has heard a number of false rumors about why a certain business failed.
Renick talked with the Daily Sun about one of the latest rumors, as well as dispelling some of the most common myths he has heard.

What’s the story on the latest rumor about The Villages forcing Crispers to close its restaurant in Southern Trace Plaza by increasing its lease payment?
The truth is they approached us about the ability to terminate their lease early. They called us and asked to get out of the lease. Them approaching us to find a replacement spoke to what their long-term plan was, at least for this store. So, we started our marketing efforts and fortunately discovered Habaneros Mexican Grill. It was fortuitous timing. We found something that worked for both parties, and now we’ll have a seamless transition with Crispers closing and the opening of Habaneros as soon as possible afterward.*

Is this the type of unfounded information you heard when Perkins Restaurant & Bakery closed its store at Buffalo Ridge Plaza?
Yes, Their lease expired, and they opted not to renew it at any rate. Although I can’t offer any details, we would have
considered renegotiations.

What about the claim The Villages charges higher-than-average market rates for rent?
That’s another myth; that The Villages charges too much rent for businesses to be able to survive. Every business knows the terms of their lease before signing a contract, and has included that in their pro forma. Any rent escalations are defined from the outset and are either fixed or tied to the federal Consumer Price Index. So there are no surprises on either end. There are properties within The Villages that require higher rents than others, but also many properties in the community that we do not own charge higher rents than we do.

What’s the No. 1 myth being perpetuated about commercial leasing in The Villages?
That every business in The Villages pays to The Villages Developer a percentage of every dollar they take in. I have heard this from the first day, and it is completely false. Some businesses do pay a percentage of sales only after they exceed a certain threshold that is predetermined and agreed upon. It’s a clause in their lease that kicks in only after sales reach a certain threshold; so it’s pre-negotiated. This is a common practice in retail leases nationwide. Within
The Villages, only 7 percent of our businesses met this criteria last year.

What about the claim that The Villages’ leasing rates discourage businesses from expanding into the community?
That is patently false. Rent is a single line item in every tenant’s budget, and a small factor in a broad evaluation of the investment to open a business. We’ve all been to locations where businesses are thriving while paying literally exponentially more rent than in The Villages. There are dozens of reasons why a particular business might decline locating here. Some have certain requirements for population or other specialized needs that we cannot control or satisfy. Many others are based on misinformation or preconceived biases about our market, which keeps my team working each day to educate and change people’s minds.

Is there any other disconcerting myth that troubles you?
That The Villages doesn’t care about vacant spaces.
The Villages’ intention is to own indefinitely its commercial properties in the community. While we have no shortage of businesses interested in opening a location, turnover is not good for anyone involved and ultimately costs money. So we are careful to analyze every aspect of a proposed business to hopefully place those with the greatest chance for long-term success. In doing so, we would rather carry a vacant space than put in a business with a marginal potential, only to see it fail.

I wonder what they are charging per sq ft on average. I have a friend who is a veterinarian in Cary NC. Until recently, he rented 1564 sq ft in a strip mall. I was surprised when he told me he was paying 4400 a month for the space. That includes TICAM which is his share of taxes, insurance and maintenance split with all the other leasees in the shopping center. Also, all upkeep specific for his space, he paid, such as an air conditioner needing replacement. He also had automatic increases on his lease every year based on some index. The owner of this shopping center essentially pays for nothing after he bought the it. I thought that was expensive but I now think it is the norm in this area. Since TV has a much more captive audience, I would guess their rents are at least as high.

A Myth always hides another Myth.... Just Saying. Especially if it comes from a good source of a Myth
Might Be like Robin Hood going to the king and telling him I hear you want all the Money, and the King say no just a Myth, just a good part of it.

I know a business that has been in The Villages a very Long time, and he tells a different story... alot more involved than just the money I knew this cat when he was knee high to a grass hopper. He has no reason to tell a MYTH.. LOL

A better myth would be to watch the video series on building Brownwood and hear the developer say it is not about money in TV. MYTH or NOT?? Might need to call the Myth Busters.. :a20:

There is one obvious conclusive point here and that is who owns all the commercial property in TV? Do you suppose that dampens competition?

Another impression made was an interview with the Daily Sun clears up any myths.

i recall in one of the recent VHA voices we were told if we wanted answers to any of questions just read what's in the Daily Sun

it is not my intent to disparage the Sun because it does well for its intended purpose.

But honestly we all know there is only one cattle baron in town

The Villages Development is a multi billion dollar venture which, in my opinion, is the best managed development I have ever seen anywhere. To try to pinpoint an area in which they are in it for the money is ridiculous. If you are a resident, just look around and see what you are enjoying because of their management. Do you have landscaping second to none. Entertainment, second to none. Recreation, second to none. There's golf courses, recreation centers, town squares and activities available no where else in the world. The roads, landscape maintenance, building maintenance and waters that are beautiful. Medical EMT that stand ready to serve you, I see them sitting in their vehicles ready to take off to save your lives. Yes you pay a HOA but will pay that anywhere and won't get a fraction of the amenities. Don't worry about how much the management is making on rent, How ridiculous, just live your lives and enjoy this beautiful area of which you are Blessed with.

Simple whats the rate per SQ FT..Don't need line item excuses

LOL

I'm sure there is no self-serving purpose of the Director of The Villages Commercial Development Division, stating that none of the businesses leaving are doing so...because the lease rates are too high. :oops:

Nahhh, nothing here, because Renick and the Daily Sun have said so. :ohdear:

Nevermind, had to erase my response and SMH. Just don't like when people tell you what should be important to you or not. Mea Culpa.

Thank you Bogie.

The Villages ARE in it for the money. That is fine with me. I am a Capitalist.

I think they do a great job here and I like that the Morses do a good job with their big, BIG development. Many of us moved from lovely well maintained areas around the country and even Florida. I am not angered by financial success and I am not jealous of it. I don't think all rich people are good are all good people are rich. I think we are lucky to live here and I am glad this is the place we chose to live out our years.

I read posts above from people whose philosophies of life I am familiar with from having read their opinions on this forum for many years.. They haven't waivered and neither have I.

Maybe I need to explain, now that I can't back out. I wish there were simply a delete button! :) I meant: a person gets on and expresses an opinion, or delivers some "facts". Agree, disagree, or post your own opinion, just don't say why are they worried about that, this place is so beautiful, just go live life....which has nothing to do with nothing! And it trivializes someone else's interests. I don't care how much $$ the Morse's make. Their idea, their funds that back it, I get to live here and enjoy it...so be it. It is interesting, however, to try to gain some insight in to how they lease their properties, or don't. To me. Now...I will go outside and enjoy the amenities...

Every day is precious. I have been rude to people on this forum who have so many good qualities. I have been wrong so many times. None of us know what tomorrow brings. We need to enjoy this beautiful day.

You are right Lovey. So very right.

Thanks... :) Every now and again, I get it right!! Hahaha...
Have a great day and a happy weekend....not that weekends mean a lot to us old retired folk!

It's true that everyone has an opinion....that said though...it is beyond me why "some" are looking for the dark side of things (always) re: our community. Such as, the developer is "out to get us". Yet, they purchased a home here, join the activities yet they blast the "hand that feeds them" (so to speak). I don't get it. I, for one LOVE this community! Every community has issues...none will be perfect..but this one out-runs any others we've lived in, in the past.

I'm not sure how the rental contracts between the developer and a business are constructed is any of our business anyway. If the terms were so far out of line it would not benefit the developer or the residents if the spaces are empty. Retail space has a value that can change. Think about the value of space in Lake Sumter in 2005-6 when it first opened and there were fewer neighborhoods around. Compare it to now. Certainly the value has increased and a smart businessman will consider that in a new lease or renewal. It is up to the lessee to determine if the terms are OK. There are some long term tenants in Spanish Springs and Lake Sumter that have added locations in Brownwood, so the terms can't be that onerous.

Thanks for the post Bogie Shooter.

I can say from personal first hand knowledge in more than one commercial lease signing/renewal here in TV that your posted information is pretty accurate.

Nobody signs a lease without knowing what the rental amount will be for each and every one of the years....usual 5 year lease. And most include an option clause for one or more 5 year renewal options.

Could the rent be increased when exercising a future option? Of course. Would it be so substantial it would drive one out of business? I suppose it could happen, however, very unlikely.

Several years back when comparing the rental costs here in TV to what local rates were in non Villages owned property.....for example in the "Target" shopping center and one of the malls close by....the rates were all in the same ball park. As a matter of fact the rates in the "Target" shopping center were the highest.

All were such that the only real decision to be made was location.

There is no reason for the developer or those who manage their business segments to have to lie about what they do or how they do it or why they do anything.

We all know opinions do vary.

Jealous? Let it go.....
 

The facts are simple. Commercial properties in TV, as elsewhere, are occupied based upon a contract between the parties, with the terms agreed upon in advance.

If either party doesn't like the terms, they should not sign the contract. It is no time to complain about the terms after the signing.

If the lessor and the lessee are satisfied with the terms it's nobody else's business. Simple as that.

Any griping about the profits made by the Morse family appear to be attributable to jealousy.

:boom: Great post!

Naysayers, move to a place like Juliette Falls - that just went into receivership this week; do you want to be in a place like that or a place like The Villages? Thought so......

I wonder if questioning and inquiring minds are necessarily negative minds or are they cautious minds who do not take matters at face value?

Take for instance any corporation that has vast financial and political control over three counties in a state. Would an inquiring mind probe such an arrangement, such as law enforcement , IRS, prosecutors, consumers, competitors and would such inquiry be only negative or perhaps cognitive in nature to understand the composition of it all.
what makes it tick and why?

Well said! I agree with you.

Inquisitiveness is one thing and is an admirable quality. Disguising inquisitiveness to try to prove a preconceived notion or agenda that may not exist is quite another.

Yeah, what he said!:swear:

I don't really care what is in the business contracts for the Villages commercial leasing. I do care about the number of empty store fronts, especially right on the square at Brownwood and on Canal street at LSL. Was there any discussion of incentives or marketing plans to get businesses into those empty spaces?

Yes.

Play on Words
 

See the highlights below. This is what drives people nuts. It states "Every business in the Villages pays to the Villages Developer.." Then further on it states "it is completely false.." and then it states,"only after it exceeds a certain threshold.." This is a play on words when it states as some do pay. It is directed to the ones who are bringing in the most revenue. It is not completely false and should be accurate. :ho:

What’s the No. 1 myth being perpetuated about commercial leasing in The Villages? That every business in The Villages pays to The Villages Developer a percentage of every dollar they take in. I have heard this from the first day, and it is completely false. Some businesses do pay a percentage of sales only after they exceed a certain threshold that is predetermined and agreed upon. It’s a clause in their lease that kicks in only after sales reach a certain threshold; so it’s pre-negotiated. This is a common practice in retail leases nationwide. Within The Villages, only 7 percent of our businesses met this criteria last year.

Gary. You seem bitter. Of course it is about the money. All successful businesses work on margins. In my whole life of almost eighty years I have not seen a successful business say....I have made enough money, I will continue running this but take no profit.

I suspect at this point that continuing to build is about something else. The Morses are investing a considerable amount of money in acquiring and developing the new areas. I would guess they could have watched that money and been able to maintain a very, VERY good lifestyle for several hundred years for ALL of them and their descendants.

It may be power. It may be risk taking. It may be showing a belief that a private business can do better than a government agency in building and running a small city. It may be building a legacy. It may be their jab at leaving a lasting chapter in history...or it could be about the money.

They know what they are going to pay before they sign the lease so how can they leave because the rent is too high? They knew the amount.

Rents
 

:agree:I agree completely. We have the choice to live here or not. We don't have control over businesses here any more than we do anywhere. Let's just enjoy!

Most people who go into a business of their own may be doing it in part, to satisfy their ego.

But along with their ego trip, the main criteria for doing so is the almighty dollar.
Being successful pads their ego and fills their pockets -- the more, the better.

Yes, the developers have done and are doing and will continue to do -- more developing.
Why not? They have a good product and a captive audience in the form of ongoing retirees.
And you "suspect" it isn't about money??? Surely, you can't believe that!

They most certainly aren't doing it for the betterment of mankind.
It definitely is about the money!

We all know things based on what WE would do. How WE think about folks who have more money than we do. How we feel about capitalism etc. etc. Some people continue to work when they don't have to.

Money is a good way of keeping track. Many people that I know here in The Villages came alone and left their spouse behind for several years because he/she was reluctant to close the practice, the electrical firm, the pharmacy that employed long term employees.

There is not a damned thing wrong with making money if it isn't done illegally or immorally. If it was just about making money I would have encouraged our grandchildren to steal or deal drugs. Money is nice to have. You can feel secure when you have a goodly amount and you can help others too. Some do it so quietly that you would never know they did and some people are on PBS telling folks they funded this or that foundation. Both good.

Lot of jealousy of financially successful folks I have observed in my lifetime.

yea what he said

So, what's wrong with that?

NO Not Bitter at all. Just the facts. I have been around long enough to see how things work. I grew up in this area. Work in this area, wife works in this area.
Just dont understand why some folks get pulled into the trance of it is just a myth of how things go.

Power and Money :eclipsee_gold_cup: Michael Douglas said in the movie Wall Street 2, Money Never SLeeps. Greed is good.

Nothing wrong at all with it, as long as you admit to it. Do not hide and act like you have no idea.

As long as you build it, they will come. Greed that is.
:spoken:

And as always,, JMOP

All I will say on this topic is: Bonnie and Gracie I always admire your post and dedication to the cause.

I have a friend. A childhood friend at that. I have know this guy since he was knee high to a grass hopper. He has owned a business in TV forever. We talked awhile back about how things are going in TV with the business. He said things have changed so much over the last 10 years or so. He is about to move locations to save money. He was telling me that there is much more than just the money of doing business in TV, I will leave it at that.
If you are wanting to bring the best of the best to TV to serve and provide to the residents, then you got to be willing to change. Just a thought

The daughter of Mark Morse is in charge of Commercial Leasing now...I think. Is that one of the changes, Gary?

In general bricks and mortar retail is waning. Malls are in their death throes. Most people, including me, shop on line. I don't buy clothing or trinkets at ANY tourist destination, knowing the rent is higher because it can be. The squares are tourist destinations. The Morses may need to adjust their prices. Few retail stores are expanding into brick and mortar locations and opening new locations ANYWHERE. Shopping online is winning out.

And Gary...I have no cause. I admire a well run business. I like living where things are kept up and crime is low and it doesn't snow.

I absolutely agree. They do a good job and they make a lot of money. Nothing wrong with that.

Clearing Up Rumors

Yep! Glad that is cleared up.

"This is a common practice in retail leases nationwide."
That really isn't correct, over the years we have leased over a dozen properties none had a % of sales clause in them in NY.
Now franchising nationwide and discussing locations with potential franchisee none have such clause.

Percentage leases are commonly executed in retail mall outlets.
TV is not a mall!

TV has an issue with a sales dip in the summer for a retailer.

When I first moved here I inquired about the rent for a store, it's high (without normal concessions) don't let anyone tell you it's not.

For example it's lower over by HD rt 441 with tons more
shoppers.

my .02

.

Did you lease in destination malls or in strip malls?

If you have a high traffic, high turnover business the volume can support the higher rent, but if you have a niche business, you had better be very careful of your bottom line. That's just how it is. People charge more for rent because they can charge more. In the past in DESTINATION malls that attracted droves of people, high rent and a portion of sales after a certain point used to be common. The same in vacation destinations. it isn't illegal, immoral or unethical. It is what the traffic will bear.

Well said.

From Experience
 

I can say with knowledge that some major Corporations Corporate Attorney's will tell their Pricing Departments that if the product they are announcing has no competition then the only thing that should measure their price is "GREED"The villages is not a charity and it does not have a soul. It is a profit making business. In large business's you have laws that govern their behavior, (e.g. antitrust, price fixing, etc.etc.). We do not have that in the villages. The trade off is quality of life vs controls. I guess you could say the POA is a sort of control but it also has limits. :popcorn: