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By David Walsh

PHOTO: The IBEX Global location at the Northfield Workforce Development Center in Spring Hill. / Photo by Alexander Willis

By ALEXANDER WILLIS

IBEX Global, a call center that provides outsourced customer service for other companies, will retain its Spring Hill location after the city’s Board of Mayor and Aldermen voted 5 – 4 Monday to approve a new lease agreement, which will see IBEX pay $70,000 less annually for its leased space at the Northfield Workforce Development Center.

While ultimately approved, the lease amount reduction was met with opposition from nearly half of the board.

Spring Hill, which owns the Northfield Center after purchasing it in late 2017, has leased a 47,101-square-foot section of the facility to IBEX since late 2011.

IBEX’s most recent lease agreement saw the company pay $12.50 per square foot of space, which comes out to $49,063 a month. After that lease agreement ended in December of last year, and after months of negotiations with the city’s economic development department, IBEX proposed a new lease agreement, and had communicated to city staff that if an agreement could not be reached, they would potentially not extend their lease of the property, putting its over 200 employees at risk of losing their jobs.

IBEX’s new proposed lease agreement saw the $12.50 per square foot reduced to $11.00, reducing their monthly payments from $49,063 to $43,175, for a total difference of $70,651 annually.

When first introduced to city leaders during the April 1 Board work session, some members were immediately opposed to the idea.

“I got an email from a citizen, and they said, ‘so you’re considering increasing property taxes on citizens and businesses, yet decreasing somebody’s lease rate,’ and I think that’s a valid point,” said Alderman Amy Wurth. “It’s my understanding that this specific company is coming to us for a decrease because of improvements needed at Northfield, and the overall cost of the lease. It’s my further understanding that they’re stating that if not approved, they will potentially pull out approximately 200 employees from the facility, and they will not extend their lease. I’m not inclined to support this at a time where we are raising property taxes, raising impact fees… that’s a tall order to request, so I’m not going to support this item.”

Another factor in the equation was that were IBEX’s request not to be met, not only could it result in the loss of over 200 local jobs, but the city would see a net loss of well over $500,000 annually from the vacant space. Given this, Mayor Rick Graham said perhaps a reduction in price could be worked out, but that he would like to counter IBEX’s request with a longer leasing period. IBEX’s proposal only stipulated a year-long contract – Graham suggested a four to five year contract would be preferred.

“As an economic developer, I can’t help but advocate for the jobs, because, as Alderman Wurth pointed out, they probably would not lose those people, it would probably just be a loss for those people’s jobs,” Williams said at the work session. “They never threatened that – let me be clear – it was just part of the discussion as a normal business would be, as they have facilities all over the world.”

Fast forward to Monday’s voting meeting of the Board, and many of the same concerns were voiced a second time. Wurth commented that if approved, the reduction in the lease amount could set a new precedent, and cause a “cascading effect” on the other tenants at Northfield. Williams said there was at least one clear distinction with IBEX when compared to the other tenants, in that they supply their own maintenance work, but that as a whole, there were so many factors that go into determining a lease that a new precedent likely wouldn’t be set.

“Every single lease that comes before you is a one-off for you all to make that decision on, so I don’t feel that you’re setting any type of precedent if that’s what you’re asking, because each one is a case by case basis dependent on square footage, length of terms, improvements that may be done… there’s so many moving parts,” Williams said. “No two leases that we have at Northfield are the same.”

Williams also brought up the point that since the proposed contract is only for one year, the improvements currently underway at Northfield could easily warrant the city to ask for a larger amount next year.

“Personally, [it] doesn’t scare me that much,” Williams said. “At the time that they will be up for renewal, we will have made significant changes to the building, and I believe you will be in a better position to command the type of lease rate that you feel the property is worth.”

Despite the opposition from some of the board members, the new lease agreement was ultimately approved by the Board by a thin vote of 5 – 4.

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