The Port of Olympia Commission and the City of Olympia have agreed to new lease terms for the popular Olympia Farmers Market, a move that should provide exactly what the market had sought: rent relief.
The revised lease terms were approved at Monday’s Port Commission meeting, and the city is expected to approve the lease at today’s City Council meeting.
Port finance director Jeff Smith, under questioning from port Commissioner Jeff Davis, said the immediate result of the revised lease will be a rent reduction of about $4,000 a year and a $25,000 savings in money that would have been applied to a maintenance fund.
The Olympia Farmers Market lease is an unusual one.
Port districts aren’t allowed to operate farmers markets, so the port signed a ground lease with the city, which owns the buildings at the market.
The original lease for the 60,000-square-foot farmers market was signed in 1996. It included annual base rent of $20,000, but also spelled out that a percentage paid on gross receipts would escalate over time as the market did more business.
Business has been very good as gross sales have approached $6 million a year, according to a July 2012 story in The Olympian.
Despite the success, market officials fear that passing on higher rental costs to vendors will boost prices consumers pay for market goods. They also see the rent escalator clause as a disincentive for the market to grow.
Here are some of the finer points of the revised lease, according to a handout at the meeting:
• Rent is capped through 2015 but could be increased in 2016.
• The percentage paid on gross receipts no longer escalates but is held at 1.5 percent for the term of the agreement.
• A maintenance fund has been reduced from $100,000 to $75,000, based on a City of Olympia proposal, although it, too, could be raised in 2016.
• The market, the port and the city have agreed to hire an independent consultant — paid for by the port and the city — to evaluate how the farmers market does business.
“The aim for all parties is to have the best farmers market we can for our community,” Smith said.
Also Monday, the port commission amended its plan for harbor improvements to pave the way for the purchase of some property near the farmers market.
The port is set to close on its purchase April 18, paying $319,800 for a 0.72-acre lot at Washington Street and B Avenue.
The seller is the state Department of Fish and Wildlife, which has owned the lot since October 1960, said Jim Erskine, spokesman for the state Department of Enterprise Services, the agency that manages state-owned property.
The port wants to use the lot for parking, either surface or possibly for a parking structure, to meet the needs of future development in the area.Rolf Boone: 360-754-5403 email@example.com theolympian.com/bizblog