The city of Arnold will turn off the lights at the shared workspace it operates.
Corridor 55, which opened in 2014, will close when the city’s lease on the space at 112 Richardson Crossing ends at the end of April.
On Nov. 7, City Council members unanimously voted to approve an eight-month lease for the property.
According to that lease agreement, Arnold will pay $18,800 to cover the rental fees for September and October, which hadn’t been paid at that time, and to keep the establishment open until April 30.
The city would have had to pay $28,200 if it kept Corridor 55 open for another year.
Currently, 24 members operate out of Corridor 55, which offers office space, a conference room and other amenities for people who run small businesses.
Some of them may relocate to Synergy Collaborative Workspace, a coworking space that opened Monday at 3601 San Simeon Commerce Drive just outside the Arnold city limits, said Carlos Dunlap-Beard, who co-founded the business with his wife, Alicia Beard, and Ned Hendrixon.
“I am disappointed that the project isn’t continuing, because it is a good community asset,” said State Rep. Mary Elizabeth Coleman (R-Arnold), who was instrumental in creating Corridor 55 when she was an Arnold city councilwoman.
“It sounds like that need is being met through the private sector (Synergy Collaborative Workspace). Often government isn’t best equipped to solve problems, and this, unfortunately was an example of that. I’m disappointed that it is not being continued, but I understand the decision the council is making and why it is making it.”
City Administrator Bryan Richison, who managed the coworking space, said there is a chance Corridor 55 could remain open if a private investor takes it over.
“I was joking with (Mayor Ron Counts) that we say we are going to close the golf course, and I get two people who want to take it over,” said Richison, referring to current negotiations with Walters Golf Management to take over operations at the city-owned Arnold Golf Club. “I say we are going to close Corridor 55, and I have been contacted by three people about Corridor 55. We need to start closing more stuff; people want to take it over once we start talking about closing things.”
Richison said discussions with those interested in possibly buying the Corridor 55 operation are in the early stages.
“They all could take a look at the numbers and situation and drop out,” he said.
Richison said the city contacted the Chamber of Commerce, which has an office in Corridor 55, to take over operations at the co-working space, but the chamber declined.
“We live on fundraising efforts and membership fees. We kind of looked at it like is it fair to use membership fees to take care of this thing,” said chamber president Julie King-Schwarz, who is vice president of Servpro of Arnold/North Jefferson County.
“We are all volunteers, so who is going to take care of this thing? Nobody has the time to do it. We are not property managers and didn’t feel it was in our best interest to take it on.”
Corridor 55 only showed a slight profit in one of the five years the city has operated it – in 2016, when city records show it made $1,552.38, Richison said.
However, he said that profit was the result of the lease fee for the building not being factored into that fiscal year.
Arnold has paid a total of $254,765.80 to operate Corridor 55 since 2014. It only collected $79,013.89 in those five years from membership dues, meaning the businesses has cost the city $175,751.91 since 2014, according to city records.
The current 24 members pay between $25 and $150 depending on the services they use at Corridor 55, such as office space, the conference room, a classroom, a kitchenette, high-speed secure internet or mail services.
“I feel like the city has been undercharging some of its occupants for some of these spaces,” said Billy Fauller, who owns Inside Out Tax Resolution Services and has been renting two offices in Corridor 55 for the last year. “If they were charging what they should have been, maybe it wouldn’t be such a lost cause.”
Richison said the Corridor 55 finances and management could have been handled better, and he pointed to a number of factors that held back the operation.
Richison said after Coleman didn’t run for her council seat again after 2015, he was the only city official with knowledge of the operation and as city administrator, he didn’t have the time needed to run the shared workspace.
He also said the current prices were supposed to double after Corridor 55 opened and a manager was supposed to be hired to manage the day-to-day operations. However, that didn’t happen because the operation never brought in enough money, Richison said.
“What happened is, despite the massive amount of advertising, no one signed up,” he said. “We only had a handful of members and a lot of empty offices. I made the decision not to double the rates. I was afraid it would drive away what members we had.”
In 2016, Richison said the city pulled back on advertising Corridor 55, and ironically that is when businesses started signing up to rent office space there.
“I don’t know how to explain it,” Richison said. “Before you knew it, it was full and we had a waiting list. I think at that point, we should have looked at the rates. There is no doubt.”
Fauller said he pays $200 a month for two offices, which includes fees for utilities and internet service.
“It is great for us, but when you are trying to run and manage an incubator office or a shared workspace, you have to price these things out so it can be sustainable,” Fauller said. “It doesn’t sound like these things were priced out to be sustainable long term.”
Fauller said he had already been planning to leave Corridor 55 before the city announced it was going to close the coworking space. He said he is close to finalizing a deal to move into a building off Jeffco Boulevard.
“When I heard word through the office that the city of Arnold would be closing it, it just expedited my plans,” Fauller said. “I have one employee. The plan is to bring people on and branch it out and make it bigger. We will need more space for that. Considering the timing of everything, it worked out pretty well.”
Richison said there are other reasons for closing Corridor 55.
He said it is not a core function of a city to run a business. Also, he said the shared workspace was not launching larger business operations as was hoped when it opened in 2014.
“We have other things like parks, streets and police, which are clearly core services that a city needs to provide and we need to focus more on these,” Richison said. “There were people who believed the purpose of this was to support startup companies that would grow larger, move out and fill existing commercial space in the city and become employers and contribute to the tax base. That is not what we attracted.”
Fauller said the city closing the operation could be taken as a sign that it is turning its back on small business and the self-employed.
“I feel it is sending a message to the community that they are not really interested in trying to foster new business within the city,” he said.
Richison, on the other hand, said the fact the city tried to run a shared workspace shows it supports small businesses and entrepreneurs.
“I understand the perception, but the fact that we tried it and supported it for five years is strong proof that we do care,” Richison said. “I hope we find a landing place for all of the members. Whether that is someone taking over Corridor 55 to run it as a private business, or whether that is the new one (Synergy Collaborative Workspace) opening south of us. I hope that one way or another, everybody finds a situation that works for them.”