Despite opposition from neighbors, the Lake Elsinore Planning Commission in Lake Elsinore, Calif., continues to back plans for a self-storage facility bordered by mobile homes and a park. 

Costa Mesa businessman Mike Dunn hopes to construct three buildings with 217 storage units on 2.7 acres at the northeast corner of Palomar Street and Corydon Road. The project would also include parking for 61 recreational vehicles and boats.

Final approval requires an industrial design review by the city council and the council's declaration that the business won't interfere with a regional habitat conservation plan.

The project has already faced some opposition from neighbors who claim that while the facility plans are aesthetically pleasing they do not want a self-storage facility on that tract of land, which has a park-like appearance with eucalyptus and oak trees.

Source:  The Californian,  Lake Elsinore: Commission Endorses Self-Storage Project
 

LifeStorage will install Defentect threat-awareness solutions, including GT2 gamma radiation sensors and DM3 threat-awareness software, to extend existing security solutions at its 10 self-storage facilities in suburban Chicago.

The system will monitor entrances and exits for the presence of radioactive dirty-bomb components. Defentect's system safeguards infrastructure from dangerous radiological exposure and informs first responders in the event of an incident.

President Obama signed an executive order Monday, reversing a Bush-era policy limiting federal tax dollars spent on embryonic stem-cell research.

President Bush signed an order in 2001 that barred the National Institutes of Health from funding research on embryonic stem cells beyond using 60 cell lines that existed at that time. Bush vetoed legislation in July 2006 and June 2007 that would have expanded federally funded embryonic stem cell research.

In a conference call with reporters Sunday, White House domestic policy adviser Melody Barnes said funding research is a part of the administration's plan to boost the plunging U.S. economy.

Obama also signed a presidential memorandum establishing greater independence for federal science policies and programs.

Source:  CNN Politics.com,  Obama Expected to Reverse Bush Policy on Stem Cells

Unless you happen to live in an area not affected by the economic slowdown (maybe on Mars?), you are probably wondering how to recoup what you’ve lost due to vacancies, lower rates and higher delinquent accounts. You’re not alone. Based on the frequent conversations I’ve had with other self-storage managers, frustration is being felt by many.

Up until January 2008, most storage businesses were running along just fine. As we experienced the gas and fuel prices increase, the world went a little lopsided. The cost per gallon shot up from an average of $1.70 to nearly $5. With the increase cost for fuel, everything went up: food, clothing, recreation, you name it.

Then, just to make things more interesting, a high percentage of adjustable rate mortgages adjusted (higher), values of homes declined and, for the first time in a long time, we had people losing their homes to foreclosure. Construction practically stopped, development ceased and now, well, we all know unemployment is at an unthinkable high.

It doesn’t have to be all doom and gloom, though. There are still ways to turn the bad into positives for you and your facility. Keep in mind that much of our business depends on customers with discretionary income, who have a need for temporary or even permanent storage for their household/commercial goods, and place a value on those goods.

Still, when economic times get tough, that extra $50 to $200 per month tenants pay for storage space may become harder to fork out when other more important items come first, such as gas, food, clothing, etc. How do we jump these extra hurdles and entice customers to rent from us and stay longer?

Get Off Your Duff

Its time to remember that customer service begins with special courtesies. A good place to start is with thank-you cards to all your current customers. Use it as an opportunity to remind them that you have referral programs and will reward them for sending you new customers.

Contact nearby chambers of commerce and let them know you are still in business and have a special offer for members of the chamber. Go to your local churches or other houses of worship and let them know you can help parishioners with their storage needs. Stop by the local schools and remind them you have plenty of space for extra desks, chairs and tables.

Visit area restaurants and other businesses to offer them a great deal on storage and help them free up valuable space for other needs. In other words, get off your duff and re-introduce yourself to your neighborhood.

Take an inventory of how your property looks: Is it neat, clean and well-maintained? Need to touch up some paint or fix the fence? Is it time to change some light bulbs in the hallways or in your sign? How about your golf cart: Is it clean and ready to take customers around the facility to show it off in style?

Measure Up

Perhaps now is the time to see how you measure up to the competition. Are you priced higher or lower in the market? What kind of deals are nearby facilities offering and can you match or beat them? Do they have any particular sized units that are full? If so, will their managers recommend your facility to customers if they are full? Start the give-and-take process by offering to do the same for their sites.

How about brushing up on your selling skills? Now is a great time to consider taking some online courses to become better at your job and learn new strategies for increasing business. Have you considered the Qualified Storage Manager program offered by Inside Self-Storage and the Self-Storage Training Institute? Wouldn’t it be great to have a certificate in your office letting customers know you are qualified to help them with their storage needs? Visit www.selfstorageeducation.com to learn more.

We all know that when the going gets tough, the tough get going. Now more than ever we need to exhibit a positive mental attitude and let everyone we come in contact with know that we not only are the best storage managers in town, we have the best facility too.

Going back to basics makes sense for staying afloat during turbulent times. It also makes sense to continue these practices even when times are better. Good luck in 2009!

Mel Holsinger is the president of Tucson, Ariz.-based Professional Self Storage Management, which offers self-storage facility management, consulting and development services. He is also a frequent speaker at industry conferences and a regular contributor to Inside Self-Storage. For more information, call 520.319.2164; visit www.proselfstorage.com.

Based upon economic forecasts, 2009 will shape up to be a year of higher unemployment and lower wages, which will undoubtedly have an impact on all businesses, including self-storage. Although the accompanying transitions that come with job changes, residential moves and commercial downsizing all can have a positive impact on the use of storage, there is a related risk that rent delinquencies, lease defaults and property foreclosures will increase.

Based on that expectation and the underlying risk of liability that goes with holding personal property foreclosure sales, more emphasis has been given to finding resolutions to avoid the eventual sale of tenant’s property.

Finding a Solution

There are now 48 states (plus the District of Columbia) with self-storage lien laws that entitle the storage operator to sell a tenant’s goods at a public sale when rent is not paid. However, a self-storage lien foreclosure sale should always be considered the remedy of last resort. Aside from the anxiety that most self-storage operators have with auctioning their tenants’ stored property, there is a real legal risk when choosing to complete the foreclosure process.

Since the auction sale is typically a self-help remedy, requiring no approval by the courts and no “due process” protection for tenants, pressure is on operators to follow the sale procedure without error. Accordingly, each step of the foreclosure timeline found in most self-storage lien laws must be handled with precision.

An unhappy tenant whose property has been sold may claim the sale was conducted improperly even if everything is done perfectly. Therefore, it has always been an appropriate alternative to reach a resolution with a tenant short of completing a lien sale.

It is equally important that operators understand how to “close the deal” when reaching settlements with their tenants. Here are some possible solutions to avoiding a lien sale when dealing with a tenant in default:

• Operator agrees that in lieu of payment a tenant can reclaim property and move out immediately.
• Operator agrees to accept a partial payment to stop the sale, allowing the tenant to move out before the sale date.
• Operator agrees to allow the tenant to move out, in consideration for an agreement to pay later.
• Operator agrees to accept the “abandonment” of the property in the unit in lieu of the payment of the debt.

Of course, there are many ways to resolve a tenant default in order to avoid a sale. The possibilities all depend on the willingness of the operator who is owed the unpaid rent.

All of these agreements must be in writing and include a “what if” provision addressing what happens to the tenant’s property if the tenant does not move out as agreed. In other words, if you’re going to negotiate a deal that includes the tenant moving out, you need to consider how you will deal with the tenant who does not hold up his end of the bargain. (See the "Settlement and Release Agreement" at the end of this article.)

The easiest approach is to include an “abandonment” provision with each settlement and move-out agreement. With an abandonment provision, the tenant agrees to release all “right, title and interest” to stored property if the property is not removed from the facility by the negotiated deadline. Such an agreement creates an “end game” for the situation. If the tenant does not uphold the agreement, he abandons his property that has not been removed. The storage operator then claims ownership of the abandoned property and can sell it, dispose of it or donate it without the risk of the tenant claiming a conversion of the property.

If a tenant fails to move out later and claims the operator did not have the right to take possession of the property, the court could look at the agreement and would recognize that the abandonment was given in consideration for the operator’s agreement not to proceed with the sale. The fact that the tenant failed to meet the deadline would not remove the operator’s right to take possession.

The tenant may decide he wants to just leave the property in the unit. In that case, the operator could choose to accept a direct abandonment of the property. The abandonment must be in writing signed by the tenant. Verbal abandonments are not sufficient.

Other Strategies

Certainly, if a tenant has a history of delinquencies, an operator always reserves the right to terminate that tenant’s lease. Storage operators must always remember that self-storage leases are month-to-month tenancies.

Operators should make clear in their documents that both parties have the mutual right to terminate the lease. Tenants can always choose to move out at the end of their monthly term, and storage operators have the right to notify their tenants that the next month’s rent will not be accepted. Lease termination may be the best way to stop a problem tenant before a lien sale arises.

However, storage operators need to remember two things. First, if they accept the next month’s rent any prior lease termination notice will be voided. Second, if the tenant does not move out in response to the termination notice, the remedy for removal is a court-ordered eviction, not foreclosure.

The last recommendation to avoid sales is to stay ahead of delinquencies by keeping track of non-paying tenants. Storage operators need to be wary of bounced checks, denied credit card charges and calls from repossession companies. These are all red flags of impending problems with the tenant and may be the proper alarm to begin the process of negotiating a move-out agreement, property abandonment or a lease termination.

Ultimately, a lien sale may be necessary, but as long as you endeavor to resolve the debt for the benefit of the tenant before the sale is held, you will always be able to say that it was the last resort.

This article is not intended as specific legal advice and should not be substituted for the advice of an attorney who specializes in the self-storage industry. Speak with your legal counsel and insurance agent to gain further insight into your particular state’s consumer protection laws so you may map out your strategy in advance of a sales and disposal situation.

Scott Zucker is a partner in the law firm of Weissmann Zucker Euster P.C. in Atlanta. He specializes in business litigation with an emphasis on real estate, landlord-tenant and construction law. Zucker is a frequent lecturer at national conventions and author of “Legal Topics in Self Storage: A Sourcebook for Owners and Managers.” He is also a partner in the Self Storage Legal Network, a subscription-based legal service for self-storage owners and managers. To reach him, call 404.364.4626; e-mail [email protected].

SETTLEMENT AND RELEASE AGREEMENT

This Agreement, entered into this ______________ day of _____________________, 20__, between _________________(“Tenant”) and _____________________(“Owner”) is as follows:

1. Owner has made a claim for rent and other charges due by Tenant totaling $__________

2. Tenant cannot pay the full amount due but requests the return of its stored property.

3. Tenant has agreed to pay Owner $________ no later then __________________ and has agreed to remove all of his contents from the storage unit no later then the close of business on __________________.

4. Tenant agrees and understands that access to the storage unit will be denied until payment is made. Tenant also agrees and understands that all property in the unit is to be removed and the unit is to be left in a clean, broom-swept condition. Finally, Tenant agrees and understands that any property left in the unit after the close of business on ____________________ shall be considered abandoned by the Tenant and Tenant accepts that said abandonment means the release of all right, title and interest to all of its property to the Owner. Owner may dispose of said abandoned property at its discretion with no obligation of any kind to the Tenant.

5. Tenant hereby forever releases and discharges Owner from any and all claims, demands and actions concerning Tenant’s occupancy and the storage of Tenant personal property.

Tenant: ___________________________________________

Owner: ___________________________________________

By: _______________________________________________

Title: _____________________________________________

NASA's Kepler telescope, set to blast into space from Cape Canaveral, Fla., Friday night, will look for Earth-like planets orbiting sun-like stars.

Smaller than the Hubble telescope—measuring 15.3 feet versus Hubble's 43.5—Kepler carries just one main piece of scientific hardware, a light imager known as a charged couple device that detects fluctuations in light so tiny they're measured by counting the electrons they produce on a silicon surface.

This will allow Kepler to spot planets by the previously invisible change in luminosity they cause as their orbit carries them around the facing side of their parent star.

Source:  Time,  Kepler Telescope to Take a Census of the Galaxy

SMD Software Inc., developer of SiteLink software for self-storage and portable-storage management, announced that its Web Edition has successfully completed the SAS 70 Audit Report, an in-depth assessment of internal controls including financial and data security. The audit ensures controls are in place and attests to their effectiveness over time. Examples of controls reported include: 

• The appropriate management of authentication and accounting
• The appropriate processing of data
• The completeness an accuracy of data and reports
• The security, encryption and storage in redundant locations of customer data 

SAS 70 was developed by the American Institute of Certified Public Accountants as an extensive audit of the internal controls of a service provider’s procedures and processes. It has become the highest standard of controls as they relate to financial and data security, reporting and monitoring. 
 
SiteLink has more than 8,000 installations worldwide. For more information, visit www.smdsoftware.com.

JK Moving & Storage Inc., the largest independent moving and storage company in the Washington, D.C., area and the second largest in the nation, is awarding its inaugural Environmental Sustainability Award to the Crystal City Business Improvement District (BID). The company will officially present the award during an open house at its Sterling, Va., headquarters on March 26. All JK clients, including community partners, industry leaders and Fortune 100 companies, were considered for the honor.
 
Criteria for the 2008 award were based on what JK refers to as SMART objectives: 

• S - Support community efforts around sustainability.
• M - Make a change. Set small attainable goals.
• A - Adopt your surroundings. Get started where you live, work, and play.
• R - Re-use. Recycle, donate and give away what you can; don't just throw things away.
• T - Tell others. Share ideas and experiences. Everyone can make a difference and get involved at some level.

The Crystal City BID was chosen based on its numerous initiatives. In March 2008, the district launched a Crystal Green Program, aiming to reduce energy demand and the area's carbon footprint, minimize automotive travel, increase recycling, and promote the environmental awareness and sensitivity of area businesses, restaurants and residents. The program inspired numerous events including a volunteer cleanup day with Canon U.S.A and Arlington County FreshAIRE.
 
Crystal city also created the Crystal Farms Program in May 2008 to bring community-supported agriculture (CSA) to employees and residents of the area. CSAs allow members to purchase "shares" of a farm's crops in the form of weekly fruit and vegetable deliveries. It then followed with a landscaping partnership to add, save and reinforce green practices, and to lay out a program that used best environmental practices for property maintenance.
 
Crystal City also helped divert thousands of pounds from the waste stream through the Crystal Green Power Purge. Held in the summer of 2008, the event provided area businesses and residents with an opportunity to safely, securely and sustainably recycle unwanted electronics. The BID collected more than 50,000 pounds in materials that were recycled according to guidelines approved by the Department of Defense.
 
The new JK award was born out of more than 10 years of company’s personal development and strategizing of its own sustainable practices. Under the leadership of Steve Kuhn, executive vice president, the company’s green initiatives involve every aspect of the business, guided by a sustainability task force comprised of industry experts, environmental experts and JK employees.
 
JK’s sustainability efforts have diverted more than 540,000 tons (1 million pounds) of waste in the past seven months alone. The company has also become a hub for information and guidance for clients who wish to make similar shifts toward sustainable practices.
 
Founded in 1979, JK offers local, long-distance and international mobility solutions for residential and commercial customers. For more information, visit www.jkmoving.com.

An analyst from KeyBanc capital markets, a provider of corporate and investment banking and capital-markets services, this week made recommendations regarding self-storage real estate investment trusts Public Storage Inc. and U-Store-It Trust. The analyst upgraded Public Storage stock from underweight to hold on valuation and reiterated a hold on U-Store-It.

According to the analyst, both companies have acknowledged that while the self-storage industry may outperform other commercial property types, it is not immune to economic volatility. Management teams from both companies have indicated that renter move-outs are outpacing move-ins, and commercial tenants may be on a decline this year.

The KeyBank analyst cautioned investors about jumping into the sector too early, as the company expects self-storage to experience pressure from several economic and capital-market factors. At the same time, it views upside and downside risks to be more balanced.

Source: StreetInsider.com, KeyBanc Upgrades Public Storage (PSA) to Hold; Reiterates a Hold on U-Store-It (YSI)