Quote:
Originally Posted by FlyingScot
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.
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I think more to the point would be lets say I build you a building on your land and have you rent it to me for a reduced rate for a set time.
The exclusive benefit is a benefit only to them only for the duration of the lease.
And the 'improvement' is the creation of something the doesn't exist. A pier will not be worth 'far less than it is today' because it does not exist today. If they didn't make this offer that space would have sat empty for another 100 years, I still don't see the problem assuming they agree on a term / amount.