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You can rent space in assets to generate income and enhance assets
This section moves from fees on users to actually renting space to tenants. It stresses that rental of space can bring
in money whilst also, ideally, enhancing the asset offer. As is true with fees, there is still a need to ensure that the
right incentives and support structures are in place (notably in local government) to make rental attractive to
asset managers and tenants, respectively. Similarly, equity must also be considered.
Raising much-needed income
Renting of space can be important to sustaining assets. The very viability of an asset may even be at stake without
rent. For example, the Phillips Community Center, which opened in Minneapolis in March of 2012, had served
as space for the school board. When the building did not sell on the market, it was given to the Minneapolis Park
and Recreation Board. The building only survives as a Rec Center because it pays for itself through tenant rents.
Many larger assets lend themselves to being rented out to coffee shops, the revenue from which varies according
to the location and busy-ness of the asset in question. In other assets, you may get your coffee from a machine.
Certainly assets have leased space to vending machine companies, for example, at Troy Public Library, which
gets 20 percent of the profits on a confectionary/candy vending machine. The aim with such rental is to provide a
service and make a small income in the process.
Figure 3.7: Paying tenant and an asset within an asset
Design space for rental when planning new assets
–Tin Fish café-restaurant, Lake Calhoun, Minneapolis
(source: Erika Sperl)
Some assets have rental spaces built into them that are part of
the asset but that were also always intended to be rented out. In
Baltimore, the newly-opened Southeast Anchor Library in the
city’s Highlandtown area has space for a café built into the design.
The café is seen as a valuable amenity in addition to its revenuegenerating
capacity.
Another good case in point is around the large lakes within the
Minneapolis parks system. Whilst the Minneapolis Park and
Recreation Board has steadfastly ensured that lakefronts are not
developed, they have built some places for eating and have leased
these to private operators. The venues are only available for three
months or so each year but, in that time, yield a healthy revenue
stream for the Board, in addition to being a valuable amenity for
visitors to the lakes. For example, the Tin Fish café-restaurant at
Lake Calhoun yielded $140,000 in 2011 and Sea Salt Eatery at
Minnehaha Park yielded $250,000. Similarly, in many metro, state,
and national parks, there have long been cabins that can be rented.
Raising Money | 84