“I’m really not willing to do another license agreement.”
I couldn’t blame him. What started as a temporary three-month lease had become a two-year tenancy. The landlord wasn’t exactly being unreasonable.
For a tenant these days, the temporary deal is often preferable to committing to a long-term relationship. Almost every company I know has gotten a little beat up by the economy during the past three years.
As they’ve adjusted to the downturn many have shed employees, which resulted in excess work space that they were still committed by contract to pay for.
No business likes paying for space it can’t use.
Ease Technologies was one of those companies. The Columbia-based technology company is in the solutions development and managed services business. The CEO is Chuck Bubeck, a 1974 graduate of Wilde Lake High School. After a successful career at Apple Computer, he left in 1993 and started Ease with a couple of his Apple colleagues.
Over the years, they’ve also developed a nice little niche in helping school systems configure and install their new computers. With the initial contracts, Ease would perform this work at each school; but as the contracts grew and the schools had less warehouse space available, they were forced to find their own space.
Though they had excess space in their offices in the Merrill Lynch Building, that space had a serious drawback: They needed a secure loading dock. And the Ease offices are on the 11th floor.
Fortunately for Ease, the past couple of years have been a tough on warehouse landlords, too. They found a landlord that was willing to give them serviceable space for a three-month lease, with an option for an additional three months. It was bigger space than they wanted, but the price was right and it worked better than hauling computers up 11 floors.
And the business grew. What additionally seemed like a lot of warehouse space was soon bristling with banks of shiny new computers being nurtured for school systems throughout the region.
The next deal they negotiated with the landlord was for six months, with a six-month option to renew. Though business was good, Chuck still wasn’t sure how long it would stay that way. He was aware that these school deals were susceptible to the knife, with local government budget belts tightened.
The Ease story parallels the story of the local economy as a whole. Though the recession has been officially pronounced as being over, I don’t know many businesspeople who are exactly comforted by that pronouncement. Even as business has started to pick up, companies are trying to make do with what they have, rather than hire new people or commit to new facilities.
The recession may be over, but the memory of it is still very fresh. Nobody wants to be caught without a seat, if and when the music stops playing again.
This trepidation to grow has been particularly rough on the recent college graduates just entering the workforce. Last December, USA Today reported the unemployment rate for college graduates was “the highest since 1970 when records were first kept … .”
In an article in the New York Times last month, Catherine Rampell found that the rate of employment for recent college grads has “fallen sharply in the last two years, as have starting salaries for those who can find work.”
The good news is that there are signs that the tide is turning, at least locally. Though still somewhat cautious, Ease and other local businesses are realizing that a well-played hand now can reap rewards as the recovery begins to take hold.
Ease Technologies just signed a two-year lease for its new Systems Integration & Deployment Center. Though this is hardly seen as a long-term commitment, it’s a lot longer than three months.
College graduates are getting jobs, too. We have a recent sociology grad in our house. She decided that, instead of throwing herself into graduate school, she’d jump into the job pool. It took her less than a month to land a job that she seems fairly happy with. Her boyfriend, a recent grad with an engineering degree, had job offers back in January before he even graduated. Both have taken jobs with Maryland-based companies.
It’s easy to get taken in by drama in Washington that would have us believe that the country is headed towards an economic Armageddon and that any commitment past August is ill-advised. This, of course, simply becomes a self-fulfilling prophecy as companies retrench even more.
But the good news is that, around here at least, there seem to be at least a few business owners with foresight and a belief in their abilities to get the economy rolling again.
Unfortunately, theirs are the stories you rarely hear about. But I suspect they’ll be content to be rewarded in other ways.
Dennis Lane co-hosts “and then there’s that …” a bi-weekly local news podcast on hocomojo.com and blogs about stuff around here at wordbones.com.