After 50 years overlooking the Renton Municipal Airport, the Renton Chamber of Commerce is looking for a new home. Where, exactly, is yet unknown but the transition will likely occur before the end of the year, Chamber President Bill Taylor said last week at a Chamber networking breakfast.
Taylor's announcement came on the heels of an extension to the Chamber's most recent 10-year lease with the City, which expired in Dec. 2010. The new agreement will end on Dec. 31, 2011.
Although the Chamber currently owns its building at 300 Rainier Avenue N., the City of Renton owns the land under its foundation. And, according to the lease, the land and structure will both belong to the city after the lease expires; this is known as a revisionary clause.
The Chamber building isn't the only property on the Renton Municipal Airport with the clause, although most of those properties, occupied by Boeing and other tenants, are now owned by the City.
It's no surprise to the Chamber, said Taylor, adding that the last 10-year lease renewal was made "with indications that it would be the last one."
The issue became somewhat of a hot potato within the chamber over the years.
"Every board chairman passed it along to the next, not having done much to address it," Taylor said of the Chamber's knowledge that someday its lease would end.
The transfer is part of a long-term lease agreement, which began in 1961.
Hundreds of community members and businesses chipped in to cover the cost of materials and construction of a Chamber building, said Harry Blencoe, who's name is just one among many on a large, wooden sign in the Chamber's conference room.
The hand-lettered plaque recognizes individuals and businesses that contributed to the project more than five decades ago. Before then, the Chamber was located in a two-story building on Wells Street in downtown Renton.
And earlier still, the Chamber was known as the Commercial Club, said Elizabeth Stewart, director of the Renton History Museum. The club began in 1912 and conducted its meetings out of the City Council Chambers until it moved to the Wells Street location sometime in the 1940, according to historical records.
Blencoe joined the chamber shortly after he graduated from the University of Washington on March, 20, 1950. Two days later he started at First Savings Bank in Renton. About a decade later, Blencoe held the position of Executive Vice President of First Savings, which was about the time community and business leaders rallied to fund the construction of a new building.
He remembers the time well.
"All the business people in town got together to raise the money to build the building," he said. That's when the bank rallied with other local businesses to support the Chamber.
Today, Blencoe remains on the Board of Director for the bank. He understands that the lease is up, but the construction still feels like yesterday.
"I'm surprised it came so soon," he said.
According to the original lease, which ran from 1961 through '81, the Chamber was responsible to the City for the use of the land, also known as a ground lease. The lease was then extended for another 20 years, through the year 2000, and then again through 2010. The decade-long extension came with the agreement that the Chamber invest in some building improvements to the tune of $65,000.
At the end of the ground lease, the Chamber would turn the building over to the City. When the current lease ends, the Chamber would have to pay for both the use of the building and the land, if it stays in the same location; however the City granted a one-year extension at the end of 2010.
Last years rent—including the rent lease hold excise tax—added up to $8,488 per year, said Alex Pietsch, the economic, neighborhood and strategic planning administrator for the City of Renton.
The Chamber also acts as a visitors center for the City, said Jay Covington, chief administrative officer. The city pays roughly $8,488 to the Chamber each year for this service.
As a result of the lease extension, the chamber is paying market-rate ground rent on its property for 2011, which amounts to $17,331.
A recent appraisal reports the approximate market value of the venue—including the building and the property is sits on—could net more than $30,000 a year in rent payments.
That's a substantial amount more than the Chamber is accustomed—or willing—to pay, Taylor said.
There are no specific development plans, or proposed plans for the site, Pietsch said. Ideally, the City will rent the building out to another tenant at the going market rate.
Over the last few years, the City has increased rental rates to be more consistent with market value.
Because the Renton Municipal airport is on that parcel, it's subject to FAA regulations, Pietsch said. That means tenants with an "airport use" are given priority; however, current tenants won't be discriminated against if they aren't flight-related, he said.
"All the tenants of the airport are treated equally," he said, referring to land use, and market-rate rent payments.
The chamber has the option to remain in the building, but the Chamber made it clear that that is not a finically feasible option, he said.
But, he added, "It has not been definitively said that the lease could not be extended."
The Chamber formed a six-member Chamber Relocation Committee in September to begin the search of a new Chamber venue, said Chairman of the committee, John Galluzzo.
Jason Parker, Larry Cutting, Steve Holman, Patrick Hildebrant and Taylor are also members of the committee.
"The lease is up and things have to change," Galluzzo said.
He's heard a few rumors of the chamber possibly moving to the highlands, or other outlying area, but that's just not true, he said.
"It will be in downtown Renton," Galluzzo said of the chamber's eventual relocation.
Chamber President Taylor said the Chamber would rather buy than lease; however there aren't many options on the market.
So far the board has located two sites for sale downtown, Taylor said, but neither fit the Chamber's expectations.
"I think we have an obligation to the people on this board to end up some place that they can be equally proud of," Taylor said.
The Chamber must be visible, accessible and downtown, he said. And the space should be roughly 2,500-square-feet. The current space is about 3,400-square-feet.
Taylor also worries about the timing and the economy.
"Will a bank write a loan to a non-profit?" he asked. "I think we'd be a good risk."
Despite the economy, Galluzzo said, "Now is the right time for this to happen."
Current purchase prices are they lowest he's seen in the last decade, interest rates are down, and "the chamber is the strongest it's been in 10 years," he said.
As for soon-to-expire lease terms, Galluzzo said the City has no responsibility to the Chamber. In fact, he said, "The City has been an exemplary partner for 50 or 60 years."
"The Chamber is at a point in its life that it needs to stand on its own," Galluzzo said. "We have to take charge of our own future."