August 11, 2015
During the regularly scheduled meeting of the Kannapolis City Council Monday the council members approved a contract to hire a property management firm, NAI Southern Real Estate, for the downtown properties.
The City is in the final stages of taking ownership of approximately 50 acres of downtown buildings and properties. The property management firm will be responsible for working with the City’s asset management firm, Development Finance Initiative - UNC Chapel Hill’s School of Government, on issues related to rent, maintenance and other service requests. The property management firm will manage the facilities, collection of rents, payment of bills, property maintenance, accounting and budgeting, management of current leases, coordination of sub-contractors, supervision of capital improvements. All of this will be done with oversight from DFI and City staff.
Earlier this summer the City and DFI interviewed a number of firms with property management experience and 11 submitted formal bids. NAI Southern Real Estate met all of the City’s requirements for property management. The company was founded in Charlotte in 1899 and has extensive experience in managing diverse types of property such as medical, retail and industrial property across the region including properties in Cabarrus and Rowan Counties. If approved, the firm will receive a management fee of $60,000 or 4% of gross rents annually, whichever is greater. This fee is typical for the management of properties in the region. The contract would be for one year as the objective of the City is to sell the properties to the private sector over time as part of the downtown revitalization plan.
The firm will also coordinate the responsibilities of a fulltime property manager and a fulltime maintenance technician onsite and will be able to access additional staff as needed 24/7 for such items such as emergency plumbing or electrical needs of downtown tenants. It is estimated that during this first year the cost for all downtown staff members will be approximately $135,200. NAI will not receive any additional fees for the coordination of these personnel. These expenses and other downtown operating expenses will be paid for with revenues from the downtown leases and not the City’s general budget.
The City and DFI have begun the extensive process of planning for the revitalization of Downtown. The first steps in the process are a market analysis and a site analysis. The results of these steps are projected to be completed this Fall.