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Friday, May 29, 2009

CubeSpace in Court

Posted on Fri, May 29, 2009 at 2:44 PM

By Rachael Marcus, the new news intern

For three years, CubeSpace has been Portland’s reaction to the sterile environment of most offices — the “co-working” building rents shared office space to small businesses and nonprofits, selling the idea of a working within a supportive business community that helps cubicle-dwellers get through the day without wanting to gouge their eyes out with a number two pencil. But this week CubeSpace is wading through less friendly business negotiations: last week their landlord US Bank issued the group an eviction notice and court subpoena. CubeSpace had not paid rent since March.

Today US Bank and CubeSpace’s owners, Eva Schweber and David Kominski, are debating in court whether they can negotiate rent or whether US Bank has the right to lock their doors.

Schweber and Kominski are wary of talking to the press lest they further infuriate US Bank. But a letter they posted on their website spells out their side of the story:

We sent a letter to our landlord, US Bank in August 2008 asking for a rent abatement so that we could get on top on our bills….We were under the mistaken impression that they had a stake in us remaining in the space. They responded in October 2008 with a "no."

We continued struggling along, until February when we had a truly awful month. We have prioritized paying our employees, taxes and health insurance over everything else. We paid February's rent on the last of our credit cards. We sent an email to US Bank explaining that we were really out of cash and needed to renegotiate our rent payments. US Bank responded with a letter threatening to come after all of our assets (you know, all of those assets that we sunk into CubeSpace).

In March…David called US Bank's lawyer and proposed a payment plan in which we paid partial rent now, and slowly paid the back rent over the course of our remaining lease….The lawyer said he would speak with the local property manager and get back to us.
We didn't hear back from the bank, but our business continued to grow….Tuesday, May 20, we were served with an FED (Forcible Entry and Detainer), a court action by a landlord to remove a tenant. This was the first response we had received from the Bank since their October 2008 letter.

[Photo removed by request of photographer.—eds.]

Within hours of the posting of this letter, supporters set up another website, and raised $5,130 in a few days. That’s a good chunk of change, but far short of the $45,000 Cubspace needs to make it into the clear, according to numbers printed in the Oregonian.

The story continues below.

After seeing supporters raise several thousand dollars in less than two hours, Schweber gushed on her Twitter, “Alternating between crying and speechless by the amazing community response. So many people want to help. What an amazing community.”

US Bank, on the other hand, was not so thrilled. They responded to Schweber, saying, “US Bank does not view your comments regarding issues of public opinion and the Portland business community as productive. Please focus any future correspondence and negotiations on items that will bring the parties to an agreeable resolution.”

Now seems like the time for businesses to be downsizing, to be taking advantage of communal workspace and shared resources. As such, the economic turndown did not pose too great a risk for Mark Grimes and Josh Friedman, founders of downtown’s NedSpace, which opened in February. “We’re attracting people coming out of offices, out of home offices, [and] out of coffee shops,” Grimes said.

As proof, he reported that in 60 days, five of the 25 businesses at NedSpace have earned over a total combined profit of $600,000.

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