Quote:
Originally Posted by Descant
It's not just $250/month rent. The Dive is offering $100,000 in improvements to the docks which will then be given to the city.
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It's worth giving Riviera's leasehold improvement post another look--he makes the point that is embedded in every commercial real estate rental contract. Since the $100,000 improvement is for the exclusive use/benefit of The Dive, the city does not receive any benefit from it, and we should not view the $100K as something being given to the city.
Another way to see this is to put yourself in The Dive's shoes. Let's say that you rent a building for 25 years and expand the septic system for a restaurant. You have not given the owner of the building the value of the septic system--by the time you leave, the system will be worth far less than it is today, maybe worth nothing.