In the proposed lease terms, the TDA, which shares the building at 200 North Main Street with the Greater Mount Airy Chamber of Commerce, would pay $1,625 monthly, excluding tax and insurance, for a 15-year term. The portion of the rent paid is according to the amount of space used by each organization. The chamber, which declined to state its rent because it is not public information, pays less rent. The rent includes the cost of $100,000 in renovations to the building for the visitors center.
Rich Kunkel, the chair of the TDA, said that the board wanted to “take a second look at the budget with more accuracy” and “fine-tune” the language of one its clauses to allow the board to renegotiate or opt out of the lease if its revenue dropped significantly.
He said ideally the board would like the option to renegotiate its lease term if its revenue, which comes from an occupancy tax of 6 percent, decreases 25 percent or more, affecting its $300,000 budget.
John Overton, a financial advisor on the board, reported that the latest occupancy tax numbers are down 8.5 percent from last year. In December 2008 the numbers were down 5.55 percent from December 2007 and down again in November by 6.4 percent from 2007.
Kunkel said that the board had a good working relationship with Rick Vaughn, the owner of building and the principal of Granite Development, and was interested in moving forward immediately to suit the interest of both parties. He also said “a bailout,” or opting out of the lease, is necessary to include because of the unpredictability of incoming revenue received from the occupancy tax.
“We just want to make sure we have a safety net, we are committed to this moving forward,” Kunkel said.
He said if the revenue decreased by 25 percent or more it would interfere with the TDA’s main efforts to promote travel in the area by affecting its budget for advertising.
“The monies remaining would support rent, but our main goal is advertising,” he said.
The board decided to have Jessica Icenhour, the director of tourism at the Chamber, review the budget in order to see how it could be affected with the proposed lease terms.
“We want to take a fresh look at the budget to see what impact the lease would do to a budget on a typical year,” Kunkel said.
After reviewing the budget, the board will hold a special meeting to vote on the lease terms, Kunkel said.
In an unrelated the matter, the board appointed Vickie Snow as a new member on the board. It also voted Vice Chair Zack Blackmon Jr. as the incoming chair, Robin Hester as the incoming vice chair, David Beal as the treasurer and Snow as the incoming secretary.
The board holds quarterly meetings, and will meet again April 8 at 2 p.m.. Meetings are open to the public, and usually held at city hall.
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