City mulls over lease for Secretary of State offices

No rent increase in 10 years prompts reconsideration of terms

DAVISON — As the city negotiates a new lease agreement with the Michigan Secretary of State for its offices at 300 N. Main St. the council is looking at the possibility of selling the building down the road rather than remaining as landlords.

For nearly one year, the Secretary of State offices in Davison have been operating without a lease agreement between the state and the city.

City Manager Andrea Schroeder said an agreement was in the works early last year, but the pandemic interrupted the process and the state has since been less receptive to a proposed increase in the lease.

The lease has been set at $10 per square foot, generating about $31,300 a year, for 10 years now. City officials said they would like to see an increase to $12.25 per square foot, or $38,186 annually.

The council voted Jan. 25 to offer the Secretary of State office the revised lease, good until April of 2023 and retroactive back to April 1, 2020.

At the same time, the council decided it’s going to consider asking voters for approval to sell the Philip J. Becker, Jr. Building so it can have that option on the table in the future.

Councilman Casey Clark said with the Secretary of State in Lansing continuing efforts to modernize and make many of its service virtual, he sees the state downsizing it further I the years ahead.

“I don’t think the Secretary of State is a good long-term plan for the city,” he said. “Most business can be handled over the Internet with the Secretary of State. I don’t see them having a long-term strategy of keeping more…offices open. They are probably going to be shutting more offices down, keeping them in central locations.”

He said he doesn’t think they’ll be around for the long-term, especially if they can’t “afford a reasonable rent.”

Councilwoman Jessica Abraham said she agreed with Clark, adding a 5-year lease was too long and the city should consider something shorter. She also said she thought the state was getting a good deal with the rent being so low.

“We made this lease agreement in 2010,” said Abraham. “That’s only a $500 increase over 15 years, a month. I know the value of my house has almost doubled since then. To me, I don’t think that’s enough.

“If the Secretary of State was to leave and we were to rent it out to someone else and a restaurant comes in, are we only going to charge them $12.25 a month?”

City Manager Andrea Schroeder said she would rather have somebody occupying the office space right now, until the city gets through COVID-19 and the future becomes a little clearer.

Mayor Tim Bishop said he agreed with Schroeder, suggesting the shortest-term lease until the city could get through the COVID-19 restrictions and then it would have the opportunity to figure things out.

He also asked the council to consider it might be in the city’s best interests to keep the Secretary of State downtown in Davison.

“The Secretary of State brings in people who stay downtown for at least 20 minutes from 8 a.m.-5 p.m. daily,” he said. “Their spending money could go into a downtown business owner’s pocket.”

Bishop suggested putting the issue of selling the building on the ballot so the city can have the option to sell if it wants to.

Schroeder said the city could investigate placing the issue on the Election 2022 ballot.

Councilwoman Jamie Stebbins said selling the building has a “sticky aspect” to it in that the city would lose a large amount of control over downtown Davison.

“The Secretary of State is a focal point,” she said. “I like the idea of keeping it in the city’s hands, so the city decides what goes on there.”

She added she would love to see the council maintain selling as an option, however.

The council voted unanimously to send a lease agreement to the Secretary of State for $12.25 per square foot, per month, retroactive to April and with it set to expire in April 2023.