SANTA BARBARA, Calif. - It's the end of an era for longstanding tenants at the El Centro building in downtown Santa Barbara.
Commercial real estate investment firm Jaeger Partners purchased the property on East Canon Perdido Street for $8 million over the summer and recently informed the tenants who occupy its 28 units that rent will increase dramatically, nearly quadrupling in some cases.
"I just about fell off my chair," said Maureen "Mo" McFadden, who has been at the helm of McFadden & McFadden PR for nearly 30 years.
McFadden has paid roughly $400 a month for her space for 25 years, when the building was owned by John and Muriel Lippincott. They purchased El Centro in 1948. McFadden said Lippincott wanted "to know" his tenants and have them stick around. "You can't find people like that very often," she said.
McFadden's office on the second floor has no windows, except for a skylight and no air conditioning. Books, keepsakes and photos showing McFadden posing with Hollywood stars Carol Burnett and Jonathan Winters are everywhere.
During a meeting with new owner Jason Jaeger, McFadden was told her rent would increase to $1,500 per month. It's a price McFadden said she simply cannot afford. She plans to move out when her lease is up in March.
McFadden said her low rent allowed her make her services more affordable to local non-profits.
"I don't think I could have taken care of them the way I did without this wonderful rent that I had for all these years," she said.
Jaeger said rental rates at El Centro are very low compared to other commercial buildings in downtown. After purchasing El Centro, Jaeger said many improvements were needed, including updating second floor amenities, and adding a conference room.
Jaeger said he pays daily visits to the property meeting with tenants to hear their needs.
"We're Santa Barbara based people. We see the value of this building and we are working with the non-profits and the tenants, but we have to get them all to market value," he said.
Jaeger said the majority of tenants are in favor of the new ownership, while only a few are complaining. Offers of 5 to 10 year leases are also on the table, along with gradual increases in rent.
McFadden said many tenants knew they were going to pay more when the building was sold, but they just didn't know how much.
"All of us knew here in El Centro that we had a gift in low rent," she said. "All of us in one way or another served the community with that gift."