RottenReporting: Swallowing Shelley’s Spin

Shelley Blackwell has been orchestrating one heck of a Poor Me campaign about her furniture store. Register & Bee reporter Vicky Cruz completely fell for it.

It’s time to hand out another RottenReporting award.

Let’s start with the horribly one-sided newspaper article…

Riled business owner moving, but staying in River District

Register & Bee article, paywall may apply unless you break through it.)

Sigh. Everybody is picking on poor Shelley Blackwell and her rights as a lessee of the building that her store is in. Except that she’s not the lessee of her store space. Robin and Jim Jones, the owners of Vintages by the Dan, lease both their store space as well as Shelley Blackwell’s Chestnut Lane space.

Robin & Jim Jones rent all of that space for $750 per month. That breaks down to a ridiculous low $2.08 per square foot per year. (Believe it or not, in the old lease from 2012 to 2014, the monthly rent was $475 per month. That was $1.31 per square foot per year.) Needless to say, that’s well below market rate for retail store space. Heck, the IDA has $368,353 invested into that building and that $750 a month rent is way too low… but that’s another topic.

Hey, let’s do a FactCheck while we’re talking about dollar amount. Cruz says that the elevator maintenance contract is $600 a month (and that’s been repeated in previous R&B articles). A quick look at public documents showed me that the annual maintenance contract is $4,095 per year. Dividing that by 12 makes that $341.25 per month. The article’s claim is FALSE. Anyway, back to the one-sidedness of the article.

Here’s the part of the lease that Shelley Blackwell isn’t talking about.

Section 19.22 “Renovations to the Buildings”
The Tenant understands that at any time during their tenancy the remainder of the Buildings may undergo renovation and rehabilitation. The tenant understands that in order to properly rehabilitate the rest of the building that a developer will require reasonable access to the area included under the terms of this lease in order to property address several construction and life safety related issues. There is a reasonable likelihood that future renovation will provide limited temporary disruption to the Tenant’s business operations. The tenant hereby agrees to grant the necessary reasonable access to their lease space and provide reasonable cooperation with regard to the development of the remainder of the building. Landlord will require all contractors to use due care and diligence to prevent Tenant from having to close its business due to significant disruptions from renovation or construction projects on the second and third floor of the building.”

The goal of downtown redevelopment and the IDA is to purchase key vacant and or underutilized properties then facilitate the redevelopment of those buildings by filling vacant commercial spaces in the River District with business that drive traffic, offer desired quality of life amenities, and revive a vibrant business district that ultimately drives tax revenue for the City in the long term.

That’s pretty clear, folks. If Shelley Blackwell has a problem with that, her problem is with Robin & Jim Jones because they knew that was in their original lease. It’s common business sense for the IDA & Economic Development to want to fill that building up to help with debt service payments on it. Or as we say in SouthsideCentral style, “Duh!”

Robin & Jim Jones have 700 good reasons why they’d like to see Chestnut Lane stay in business in the leased space. That’s because they have sub-leased Blackwell’s space out for $700 per month. For you folks playing at home, that means that Vintages on the Dan is now only paying $50 out of their pockets for their store rent. Hey, it’s a great thing to have somebody else pay 93% of your rent for you.

Using standard reporting procedures, I was able to get a copy of Economic Development Director’s letter to Robin & Jim Jones. Here it is…

Enterprises by the Dan, LLC
T/A Vintages by the Dan
James C. and Robin Jones
Re: 310-312 Main Street
Dear Mr. and Mrs. Jones,
Thank you for your time last week to discuss upcoming construction on the second and third floors of 312 Main Street. The Danville Office of Economic Development appreciates your investment in the River District and what both Vintages by the Dan and Chestnut Lane bring to this growing area. We are thrilled that you have seen such success since locating to the River District.
One goal of the IDA is to purchase, stabilize, and improve blighted, high priority; unused and underutilized pieces of real estate in the River District in order facilitate new business growth in the District. The IDA also works to recruit private sector investment that will result in job creation, residential development, and also improve or create quality of life amenities, all of which improves the long-term economic vitality of the River District.
Much of the $100 million in private investment in the River District can be attributed to the $30 million of public investment. In recent history, the IDA has purchased numerous properties and completed renovations and rehabilitation in the interest of providing attractive affordable spaces for commercial tenants at prices well below market value. Just as tenant up fits were provided for Vintages by the Dan to occupy its current location, the IDA desires to continue to make tenant up fits to the building which would enable future entrepreneurs and business owners to realize the dream of successfully starting a business. This was the purpose for including Section 19.22 “Renovations to the Building” in the agreed upon lease signed July 8,2014 which reads:
“The Tenant understands that at any time during their tenancy the remainder of the Buildings may undergo renovation and rehabilitation….There is a reasonable likelihood that future renovation will provide limited temporary disruption to the Tenant’s business operations. The tenant hereby agrees to grant the necessary reasonable access to their lease space and provide reasonable cooperation with regard to the development of the remainder of the building. Landlord will require all contractors to use due care and diligence to prevent Tenant from having to close its business due to significant disruptions from renovation or construction projects on the second and third floor of the building.”
As you are aware, during the Industrial Development Authority’s (IDA) meeting on February 10, 2015, the IDA decided in closed session to put a 90-day hold on their decision to construct a stairwell at the entrance of 310 Main Street. Subsequently at their March 10, 2015 meeting, the IDA had additional conversation that included revisiting the goals and objectives of downtown revitalization and weighing the impacts to existing
business. During the closed session of the March 10th meeting the IDA decided to move forward with its previously approved construction plan to construct the stairwell at the entrance of 310 Main Street. This proposed construction will occupy approximately 150 square feet and will provide access to more than 8,000 additional square feet of commercial space on the upper two floors of both buildings.
We understand that this does reduce the amount of square footage that you are currently leasing from the IDA and will inconvenience your sub-tenant during construction. The Office of Economic Development would like to make the following recommendations to the IDA board as a way of accommodating both businesses during this time:
– A permanent reduction in rent based on the proportional percentage of square footage lost.
– Based on your lease agreement, you are paying $750/month for the first floors of 310 and 312 Main Street. The annual rate for this area, which is 4,326 square feet, is $2.08/square foot. The stairwell is expected to reduce your floor space by approximately 150 square feet. Based on your current annual rate, this would result in a reduction of your lease rate by $312/year or $26/month. However, we understand there is concern over losing a portion of your storefront. Given the reduction in visibility, we would recommend a reduction of an $50/month.
– Under the expectation that each business remains open during the construction, an accommodation to compensate for any lost sales during the construction period, which can be calculated by using the delta between 2014 year’s gross sales receipts and sales tax revenue that were provided to the Commissioner of Revenue’s office.
– Providing signage during construction to help customers locate the alternate entrances into the stores.
– Assistance with moving merchandise to prevent damage during construction.
– We will recommend hiring a professional moving company to pack and move merchandise into storage while construction is taking place.
The Economic Development office will make these recommendations to the IDA at the May 12, 2015 meeting and will notify you of any decision made at that meeting. The IDA will do its best to minimize the inconvenience to the existing business during the estimated 4-6 week period of stairwell construction activity.
The IDA and the Office of Economic Development sincerely appreciates your investment in the River District and hope that you continue to experience increased levels of success in the future!
My very best,
Telly Tucker
Director
cc: Mr. T Neal Morris, Chairman of Danville Industrial Development Authority
Mr. Clarke Whitfield, Danville City Attorney

Let’s analyze this letter closely. First, the IDA has to deal directly with the lessees, Robin & Jim Jones.  As a sub-lessee, Shelley Blackwell has no legal standing on this. If there’s a communication blackout or breakdown with Blackwell, it’s not the city’s fault at all. That’s between Blackwell and the Joneses. Second, the letter clearly denotes the clause that says that the IDA is working legally according to the terms of the lease. Third, these weren’t promises at all. They were recommendations that Economic Development made to the IDA board.

Using more reporting skills (unlike Cruz), I found out that the IDA board voted not to pay the tenant or subtenant financially because of the $2.08/SF sub market lease rate already providing ample “incentive” and secondly, they have made it a habit not to pay any business in the River District due to construction and it wouldn’t be fair to pay one business without compensating all. Honestly, who could blame them for that decision?

I also found out that both Vintages by the Dan and Chestnut Lane are using the basements under their 1st floor spaces (4326 square feet), and the mezzanine space (404 square feet). They’ve been allowed to use that space and it’s not being counted as square footage for their lease. Such a deal!

By the way, bonus points for Shelley Blackwell badmouthing the IDA and Economic Development, then saying she’s going to apply for a IDA Downtown Enhancement Grant. That’s like saying, “You’re a poopyhead but I’ll take your money.” Heh.

Chestnut Lane was disturbed for one week of construction, not the four to six weeks that was referred to in the article. The completed construction did not take away a display window. The Chestnut Lane building still has a side entrance with double doors that has always been used to move the furniture in and out. Shelley Blackwell is choosing to close her store at the current location even though she’d be able to continue in business there with no problems at all. This only adds fuel to her disingenuous “The City Is Picking On Me” argument and is horsecrap.

Register & Bee reporter Vicky Cruz swallowed Blackwell’s highly-biased spin on what has happened, then wrote an article without doing any reporting or factchecking. As you can see, that factchecking would have put a totally different perspective on what has gone on.

That’s RottenReporting.