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City to open new satellite customer service office

Suzanne Tungate Elizabeth City Finance Director
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By Jon Hawley
Staff Writer

Tuesday, May 15, 2018

Elizabeth City's customer service office at Southgate Mall will move half a mile away to Towne Pointe Square, and aims to open by July 1.

The city council authorized the move in an 8-0 vote Monday night, approving a lease with Towne Pointe's landlord, LFM Properties. The space will cost several thousand dollars to renovate, after which city staff estimate it will cost $20,600 a year to operate, or almost double the $11,000 a year the Southgate office costs.

The city is moving because it doesn't have a choice: the mall's new owner has asked the city to leave, City Manager Rich Olson reported to council last week. The city started leasing space at Southgate almost seven years ago, and remained one of the mall's tenants even as it lost stores and struggled financially. After the default of former owner ABC Properties, the Vireo Group bought the mall in February 2017 and has been demolishing and renovating the mall into a shopping plaza with all stores at the front. The Northeast Academy for Aerospace and Advanced Technologies, a charter school, is also working to move into the mall.

The city cannot afford that frontage and its lease with Southgate expired last year, Olson and city Finance Director Suzanne Tungate reported last week. Vireo wanted the city out this month but Olson negotiated more time, Tungate reported during a finance committee meeting Thursday. Olson was absent from that meeting but reported on the issue to council in a budget meeting a week ago.

Olson explained to council that the city shopped around for several locations, including at Jordan Plaza at the mall's eastern edge. All those spaces were too costly and too long and narrow, he said.

City staff decided Towne Pointe Square, at 407 S. Griffin St., worked better, but it will cost more, Olson told council.

Under the lease approved Monday, rent will be $1,000 a month for the first two years, rising $100 a month in years three and four, and then $1,200 a month in year five. The rent is reasonable based on square footage, but not as good as the low rent the city negotiated at the mall, Olson said. ABC gave the city a deal because it wasn't in a prime location but still brought people to the mall, he explained.

LFM itself will pay for some improvements to the space, including a backdoor exit and bathroom renovation, according to a staff memo.

During Thursday's meeting, Councilor Johnnie Walton criticized city staff for allowing the city to be evicted from Southgate. He argued the city should've demanded more accommodation from the Vireo Group.

“We're acting like the sissies in this situation,” Walton said, adding later, “we shouldn't have had to go and look for something else until we wanted to look for something else.”

Councilor Jeannie Young disagreed, arguing the city had to respect the Vireo Group's property rights, including to decide who it rents space to.

Nevertheless, Walton said the city needed assurances in its new lease that it would not be abruptly evicted again.

Prior to Monday's meeting, Olson said the Vireo Group has been good to work with, and it's been flexible on when the city leaves. He also said the city couldn't compel the Vireo Group to provide it space on its property.

Olson also said that LFM will have to give the city several months' notice before it could evict it.

Though the city's customer service satellite office will become more costly to operate, it should still see a lot of use. A city memo reports that almost half of the city's walk-in customers use the satellite office to pay their bills. Without the satellite office, customers who wanted in-person service could go only to city hall.

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