A.S. eyes BMU postal service
The Associated Students Business Committee’s recent meetings have been filled with talk of such a contract, under which a local company, or even an out-of-town business, would rent out space in the Bell Memorial Union to ship packages and sell stamps for students.
During the last couple of days, it looked like a deal was shaping up between the A.S. and Chico Box & Postal Center, which already operates on Walnut Street.
“It’s still kind of preliminary,” said Mike Ober, who co-owns the business with Pamela Moody. “I think it would be a good service to the students,” he said, plus a way to boost exposure of his business, which already has a strong student customer base.
At March 12’s Governmental Affairs Committee meeting, Tiffany Yost, the A.S. vice president of business and finance, reported that she’s hopeful a contract will be signed and the service can move into a space on the Galleria floor of the BMU by spring break—just three weeks away.
At the March 6 ASBC meeting, members discussed renting out either 340 square feet of the BMU or 200 square feet of the bookstore. When the A.S. sent letters to local postal services, only Chico Box & Postal, said it might be interested. Then, a company named Postal Annex contacted the A.S. about possibly opening a franchise.
If a business were to rent out the space at $1.85 per square foot and also collect 20 percent of the gross sales, the A.S. would receive $4,370 net profit per year from a 340-per-square-foot contract. If the space in the bookstore were used, however, a lower rent and no sales percentage cut would yield only $840 per year in profit. The committee members were having a hard time deciding exactly how much to charge for this because it’s rare to rent out space to non-A.S. businesses.
But it’s not about turning a huge profit, Yost said. “This is a service we must provide,” she said, referring to a survey. “Ninety-seven percent of students want this.”
Yost recently visited UCLA’s bookstore as part of a conference and learned that matching services to students’ wants is what made that school’s student government a $75 million corporation.
Although a contract with Postal Annex would provide for more services such as photocopying and mail boxes, the out-of-town business would not be able to move in anytime soon and would also not offer the 20-percent sales cut to the A.S., although it would likely pay higher rent.
Business Professor Shekhar Misra offered ASBC members some suggestions on how they could figure rent in future contracts with private businesses (The A.S. has also considered adding a dry cleaning drop-off counter). “You look at the market rate and modify your cost according to budget; you can’t just base it on cost to [the A.S.] alone,” Misra said.
The current asking rent is based on a comparison with the Chico Mall. John Lydecker, the A.S. vice president of facilities and services, said, “The problem is that there is completely no comparison to the market value because it’s an unequivocal monopoly. It’s smack in the middle of campus.”
Despite the small setbacks, the ASBC members sounded excited about the idea of a postal service in the BMU. "Conceptually, it makes sense," Misra said.