May 28, 2008

Emptying Commercial Space: An Opportunity for Your Nonprofit?

Recession or not, reports of empty storefronts are popping up nationwide -- signs advertising "Free Rent" have actually been spotted in Las Vegas. That's bad news for the economy, but could actually be good news for some nonprofits.

StorefrontLandlords hate to have an empty storefront. It's a potential target for thieves and vandals, and reduces traffic to other stores in the same strip or complex. But finding another tenant and negotiating a new lease can take weeks or months to complete.

Some nonprofits have been finding ways to fill the gap. For no or very low rent, they've used empty retail space for such temporary purposes as animal adoptions, a soup kitchen, a depot to collect and contribute clothes to the poor, and more. It's a win-win situation: The nonprofits get higher visibility and a way to reach more people (both clients and potential donors); the landlord gets the benefits mentioned above, plus possible increased foot traffic to other stores; and both might get some good media coverage from the partnership.

If your nonprofit could benefit from such an arrangement, look around your area for empty storefronts and get in touch with the landlords. They might have already heard of your idea -- particularly if they read the "Commercial Lease Law Insider," a respected publication that featured an article called "Protect Yourself When Temporarily Filling Retail Space with Nonprofits" in its September 2007 issue.

The "protection" part of the article simply referred to the fact that the landlord needs to sign some sort of agreement with any nonprofit to which it lends or rents space. Signing such an agreement is in your interest, too, to make sure everyone has the same understanding of price and other terms.

Instead of a standard lease, the landlord is most likely to want a license agreement, which is appropriate for situations where the arrangement is so temporary that the landlord shouldn't have to evict you if you refuse to leave by the agreed-upon date. If, however, your organization turns into a long-term tenant, you'll want to sign a standard commercial lease. For help with this, see Negotiate the Best Lease for Your Business, by Janet Portman and Fred S. Steingold (Nolo).