SIGN OF THE TIMES Barlow tenants are pushing back against so-called common-area maintenance fees.
A majority of tenants at Sebastopol's Barlow retail development have formed an assocation to challenge what they see as unreasonably high fees. The group has hired a certified public accountant to audit the Barlow's "common area maintenance" (CAM) fees.
Last summer, 24 Barlow tenants banded together to form the Barlow Tenants Association. The number is now 22 after two members left the Barlow. There are currently 38 tenants at the development.
"We are in the process of auditing the Barlow to better understand how we're getting to these expenses," says association leader Ben Kinmont, owner of Ben Kinmont Bookseller, an antiquarian bookshop in the Barlow that specializes in rare books on gastronomy.
Kinmont said the Barlow management is working with the group on the audit. The CPA's report is expected in the next six weeks or so.
"Our goal is to try and make this work," Kinmont said.
Barney Aldridge, the Barlow's developer and owner, said he welcomes the audit and called it a "healthy and good thing." He said he offered to help pay for the audit, but the association declined. But given the work he's put into the Barlow and the free rent, loans and other assistance he said he's given some tenants, he's frustrated by the complaints.
Since the Barlow opened in 2013, four tenants have terminated their leases. Some cited CAM fees; others pointed to poor sales and management practices.
"I totally closed my business and probably won't open another because it left such a bad taste in my mouth," says one former tenant who requested anonymity.
When this former tenant first signed a five-year lease two years ago, the tenant was told CAM fees would be about 18 cents per square foot each month and would only increase a "reasonable" amount.
But the first CAM bill was 28 cents a square foot. Last year, the former tenant's CAM fee had increased to $900 a month.
"There was nothing reasonable about it," the former tenant says.
The fees are paid in addition to rent and go toward landscaping, cleaning, marketing, taxes and Barlow employee salaries. The current rate is 47 cents a square foot, a rate Aldridge says is lower than similar developments.
Aldridge says the CAM fees are an estimate and have increased because of unforeseen costs, including a near tripling in flood insurance over the past three years, property reassessment by the county and the need to hire more staff. He says the businesses that left did so because of poor business plans and poor sales, not because of increases in the CAM.
"It had nothing to do with CAM. They just went out of business."
More due diligence and advice from an attorney, the former tenant adds, could have prevented the situation.
"A business owner wants to know how much the bills are going to be. I was strapped. [The CAM fees] were eating up all the money I had set aside for my business."
This tenant fears the fees may drive out small West County businesses the Barlow set out to attract. "It's going to become a shopping mall with Starbucks and chain stores."
Aldridge says he's turned chains away. The city of Sebastopol is considering regulations that would prohibit so-called formula businesses; if adopted, the new regulations could prohibit chain stores from moving into the Barlow, says Sebastopol planning director Kenyon Webster.
So far, Gypsy Bay Laurel, C-14 gallery, Lynn's Lavender and Dance4Change have left the Barlow. Warped Brewing is also planning to leave, but owner Noah Bolmer wouldn't comment on his reasons. The brewery is no longer making beer in Sebastopol and is moving its operation into San Carlos' Devil's Canyon Brewing Co. They are looking for another retail storefront in Sonoma County.
Lynn Rossman is the owner of Lynn's Lavender. She was the first new tenant to sign a lease at the Barlow—and the first one to leave. After what she said were numerous construction delays and then problems with her unit and few customers, she was given an opportunity to terminate her lease.
"We did so, gladly," she says.
She believes the departure of businesses is related to larger managerial issues. Rossman supports Aldridge's vision for the Barlow as a place for local artisan producers and businesses, but she says poor management has hampered the project.
"Had he hired and listened to experienced, competent and knowledgeable people, it would have gone in a different direction," she says.
Aldridge says Rossman left because of poor sales.
"I'm one of the few landlords that lets anybody out of their lease. Most landlords chase people for years in the courts over their leases."