John Huffman, owner of Buttermilk Pike Self Storage in Crescent Springs, Kentucky, is suing the city over a flagpole he recently installed at his facility. The 199-foot pole at 2550 Schmidt Lane exceeds the maximum height of the building, which is a zoning violation. Though Huffman requested a variance from the city’s board of adjustments, he was denied. Now he’s filed a lawsuit over what he calls a vague zoning code, according to the source.

Huffman was notified about the violation via letter from Planning and Development Services of Kenton County 10 days after the flagpole went up. The maximum pole height for any property is determined by total structure height, which in this case is 40 feet, according to planning manager Andy Videkovich.

Huffman said he invested $160,000 in the flagpole, which is a tribute to his mother-in-law, who escaped Cuba. It also commemorates his American pride and honors military veterans and first responders, he told a source.

Before proceeding, Huffman searched the city’s zoning code for restrictions but didn’t see anything related to flagpoles and businesses, he said. Officials assert that the ordinance is valid and enforceable, according to attorney Mike Baker, who’s representing the city in the lawsuit. Zoning for flagpoles is included in the rules regarding signage, the source reported.

Huffman hopes to reach an agreement with the city, so he won’t be forced to remove the tribute. “I just can't imagine taking it down. You know, to me, I think it's inspirational. I like to see it; other people like to see it. I mean, what's the problem?” said Huffman, who created a GoFundMe campaign to raise money to cover his legal costs.

Huffman also owns Beechgrove Self Storage & U-Haul in Independence, Kentucky. Both locations are family-operated.

Source:
Local 12 News, NKY Business Owner Sues City Over Restrictions on The Height of His American Flag Pole

 

Update 8/11/21 – Police have arrested a suspect for the murder of Arnold-Boesigner, whose body was found inside a unit rented in her name in March. Jonathan Vanduyn, 33, has been charged with first-degree murder and faces the additional charge of concealment of a homicidal death, according to a source.

Police discovered the body inside a black Jeep Renegade registered to Vanduyn, which was stored inside the unit. The cause of death was either homicide by asphyxiation, accidental from the ingestion of drugs or a combination of the two, according to the medical examiner.

Arnold-Boesigner and Vanduyn were involved in a romantic relationship with a history of abuse, a source reported. Investigators believe she was likely killed on or about Nov. 15, when cell records show the couple near the U-Haul facility. Her passcode was used to enter the property at 11:10 a.m. and again later, after her debit card has been used at a nearby Home Depot to purchase heavy-duty garbage bags, duct tape and odor-eliminating products.

Arnold-Boesigner’s pickup truck was captured on camera the same day, with Vanduyn driving. Over the next several weeks, Vanduyn reportedly used her debit card, and her cell phone was shown as active and near Vanduyn’s mobile device.

In December, Vanduyn used Arnold-Boesiger’s pickup to abduct his own daughter and drive her from Wisconsin to Indiana. When police apprehended him for this crime, they discovered items belonging to Arnold-Boesiger inside the vehicle. That evidence led them to the storage unit where her body was found.

---

3/5/21 – The body of a 33-year-old woman was discovered on Tuesday inside a self-storage unit at a U-Haul facility in Roscoe, Ill. The McHenry County Sheriff’s Office obtained a probable-cause warrant to search the property, where investigators found Michelle Arnold-Boesigner. A resident of Harvard, Ill., she was reported missing on Jan. 3 to the Holiday Hills Police Department, according to a source.

At least six police vehicles responded to the scene on March 2. Arnold-Boesigner was identified on Thursday. No additional details have been reported, including whether police suspect foul play. Investigators indicated there isn’t any threat to the community, sources reported.

The Roscoe Police Department and Winnebago County Sheriff’s Office are also assisting in the ongoing investigation.

Established in 1945, Phoenix-based U-Haul International Inc. owns or manages more than 1,200 self-storage facilities across North America. Its portfolio comprises more than 68 million square feet.

Sources:
MyStateline.com, Body Found at Roscoe U-Haul Storage Facility
MyStateline.com, Body Found in Roscoe U-Haul Facility Identified as Harvard Woman
WIFR, Death Investigation Underway in Roscoe
WIFR, Wis. Man Charged for Murder of Michelle Arnold-Boesiger, Abducted Own Daughter

Stuf, a startup business that partners with commercial-property owners to convert unused space to self-storage, has added two locations in San Francisco and Oakland, California. Both are in the basements of commercial buildings and will serve tenants of those structures as well as the general public, according to a press release.

The San Francisco facility at 115 Sansome St. is inside a 118,000-square-foot building in the city’s Financial District. Owned by the Vanbarton Group, the basement space was previously used for overflow building storage. The Oakland facility at 521 16th St. is inside a 61,000-square-foot office building affiliated with Westlake Realty Group Inc. The basement was previously unused, the release stated.

“The missing piece with self-storage, especially in heavily populated areas like the Bay Area, is having reliable and conveniently situated options,” said Katharine Lau, co-founder and CEO of Stuf. “By leveraging underutilized spaces, we’re able to provide locals and businesses nearby facilities for all needs.”

The New York-based venture signs revenue-sharing deals with landlords and converts the agreed-upon space to self-storage. It’s Bay Area expansion comes after the company raised $1.8 million in seed funding last year. Stuf also operates locations in Los Angeles, New York and Washington, D.C.

Source:
PR Newswire, Self-Storage Startup Stuf Announces New Locations in San Francisco and Oakland

StorageMart, which operates more than 200 self-storage properties across Canada, the United Kingdom and the United States, is offering $100 in cash to all of its U.S. employees who get fully vaccinated against COVID-19 by Oct. 31. As part of its incentive program, the company has also challenged other self-storage owners to follow suit.

The moves come as hospitalizations and deaths from the COVID Delta variant have risen sharply among the unvaccinated. “Stopping the virus takes everyone, and the vaccine is a safe and effective tool to help us do that,” said Cris Burnam, CEO. “The COVID-19 vaccine is now widely available, and we want to encourage everyone who can get it to do so.”

“The responsibility is ours to do what we can to help stop the virus,” wrote Marketing Director Sarah Little in a company blog post. “Today, we asked our team to join us in protecting our communities by getting vaccinated. Getting vaccinated adds another layer of protection for our employees, our coworkers, our customers, our families and loved ones.”

Burnam would like to see other self-storage operators mobilize a vaccine effort. “Our employees carried our industry through a tough time. I challenge every self-storage operator to follow suit and incentivize their teams to become fully vaccinated against this virus,” he said.

Founded in 1999 and based in Columbia, Mo., StorageMart is privately owned and operated by the Burnam Family, which has been in the storage industry for four generations. Its portfolio consists of more than 15 million square feet of storage.

Sources:
PR Newswire, StorageMart Offers COVID-19 Vaccination Employee Incentive
StorageMart, COVID Vaccine Employee Bonus. Plus a Call on the Industry to Step Up.

A self-storage business can be a complicated entity that might involve multiple investors, which can make tax filing a convoluted process. Whether you’re preparing for the next tax season or filing under an extension for this year, it’s important to think about potential issues as well as ways your company can benefit. Doing so will save money and, if problems are caught early, protect you from an unwanted audit.

Watch for Tax-Law Changes

While no significant 2021 tax-law changes have been announced at the time of this writing, the Biden Administration has signaled it would like to modify the U.S. tax code. There’s no guarantee this will happen, but it should be a topic of discussion with your accountant.

There’s an expectation that capital-gains tax and ordinary top-tax rates will increase this year or next. This means you need to start planning now. Speak with your bookkeeper about potentially reporting your income early in 2021 and deferring certain deductions in 2022. Proper timing and deductions can save you money if tax codes do change. There’s no one-size-fits-all solution, so this advice won’t work for everyone; but it’ll apply to many self-storage owners.

If there’s an increase in tax rates, you may want to hold off on any advanced depreciation until next year, so you can save more money down the road. Just take a regular table depreciation for now. You may also want to postpone any cost-segregation study until 2022. This tool identifies and reclassifies personal property assets to shorten depreciation time for tax purposes, in turn reducing income-tax obligations for the year. If you’re forgoing advanced depreciation in anticipation of a higher tax rate, you won’t need a cost-seg study for 2021.

Understand the Requirements of Any PPP Loan

The COVID-19 pandemic created an unprecedented amount of financial assistance for business owners, including the Paycheck Protection Program (PPP). If you accepted such a loan, as long it was used to maintain payroll and make rent or mortgage payments for your business, it’ll be forgiven and turned into a tax-free grant. However, you must understand and adhere to the terms and conditions. Not using the money correctly could lead to your business being liable for all or some of the outstanding debt.

The purpose of PPP loans was to help business owners maintain their employees and buildings during the crisis. To qualify for forgiveness, you needed to maintain your employee-compensation levels, spend at least 60% of the money on payroll, and use the rest for business rent, lease or utilities. If you didn’t use the money for these purposes, you’re required to pay back a percentage.

Understand Your Operating Agreement

It isn’t uncommon for a self-storage facility to have multiple owners. Using a variety of investors makes it easier to raise capital; and bringing in people with a variety of skills can be helpful in growing the operation. However, being part of a multi-partnered business means you must have an operating agreement, and it must match your tax filings.

Capital accounts should track the money each investor contributed as well as any undistributed preferred returns and distributions based on how you wrote them in your agreement. Self-storage owners working in a limited partnership can sometimes do a debt-finance distribution, which means the partnership secures debt, then distributes a portion of the proceeds to the owners. If you decide to do this, you might be able to deduct some of that interest, but generally not all of it.

It’s also worth noting that smaller self-storage companies are exempt from the business-interest expense limitations. This applies to any business with gross receipts of $26 million or less; however, this exception may not apply to you if you’re considered a tax shelter. This comes into play if more than 35 percent of your losses are allocated to limited partners. Know your business’s operating agreement. It’ll help you out next tax season.

Clearly State Your Intentions

What was the reason you started your self-storage business? Were you planning to run the facility yourself or hoping to sell one day or? You need to have an answer to this question, as it’ll have tax implications. Self-storage developers deal with a high tax costs because the whole process is taxed as business income. You may be OK with this, but you need to state your intentions in the tax filings.

Owners who manage their own facilities and later sell them will deal with capital-gains tax as well as deprecation recapture. This is the gain realized by the sale of depreciable capital property, which is taxed at a higher rate. The rate can be lower under a capital-gains play, but you need to make your intentions clear before you file.

This doesn’t mean you can’t change your mind about the purpose of your business. Entities in the real estate market change direction all the time. But I’ll reiterate: You must make your intention to change direction clear before you file.

It’s never too soon to start preparing for the next tax season. Be aware of potential changes to the tax code and make sure you understand the conditions of any PPP loan you received. Understand your business-operating agreement and clearly state your intentions when you file. Taking the time to get your tax issues in order early will save you time and money down the road.

Note: The information is this article is intended to be general education, not tax advice. Consult with your tax advisor to determine the best strategy for your specific facts.

Phil Wuollet is a certified public accountant and a partner at Epstein Schneider PLC, an accounting firm in Scottsdale, Arizona. He helps clients with tax compliance as well as developing forward-thinking strategies for reducing and deferring taxes. For more information, call 480.483.3024.

Self-storage ownership has changed in recent months due to the pandemic, technology innovation, staffing fluctuations and all sorts of factors. To ensure you’re keeping up with the times, take advantage of the seminars that were recently recorded at the 2021 Inside Self-Storage World Expo. All seven sessions from the show’s Ownership Track are now available for pre-order in DVD format and will also be released as on-demand video once production is complete in late September. They are:

• 5 Smart Things Self-Storage Owners Should Do Every Year (But Many Often Forget)
• An Owner’s Guide to Remote Self-Storage Management: It Isn’t Just for Pandemics!
• The Keys to a Smooth-Running Self-Storage Business: Implementing Policies and Procedures
• In Self-Storage, Staff Is King: People-Management Mistakes to Avoid
• Self-Storage Diagnostics: 5 Ways to Measure the True Health of Your Business
• Is It Time to Become a Multi-Site Self-Storage Operation? Why and How to Grow Your Portfolio
• Spend Where It Counts! Ways to Cut Costs and Boost Your Self-Storage Bottom Line

You can order DVDs individually or part of a special discount package. These seminars are also included as part of two larger bundles at significant savings. The Total Solutions package includes all 42 topics recorded during the expo, while the Operator Essentials bundle includes all sessions from the Customer Experience, Management, Ownership and Technology Tracks.

Pre-orders are expected to ship by Sept. 24. Visit the ISS Store for full product details. Take advantage of education you can view from the comfort of your home of office, and become a modern self-storage owner positioned for long-term success!

CubeSmart, a self-storage real estate investment trust and management company, has been recognized as one of the “50 Most Engaged Workplaces in North America” in 2021 by Achievers, which offers a cloud-based employee-engagement program. The annual campaign recognizes top employers that display leadership and innovation in engaging their teams, according to a press release.

Applicants were evaluated by a 15-judge panel comprised of employee-engagement academics, industry analysts, thought leaders, journalists and influencers. Winners were selected based on Achievers’ “Eight Elements of Employee Engagement,” including accountability and performance; belonging, equity and inclusion; culture alignment; manager empowerment; professional and personal growth; purpose and leadership; recognition and rewards; and wellbeing. They’ll be honored during a virtual gala on Oct. 21.

“It is an honor to be recognized for our team’s engagement for the second time. It is a credit to each and every one of our teammates for making CubeSmart a great place to work,” said CubeSmart CEO and President Christopher P. Marr. “Teammates tell us that our culture is special. We invest in them, and they invest in us. Together, we are able to make a difference for our customers, create a sense of belonging amongst our team, and grow personally and professionally. Having a truly engaged team carried us through a challenging year, and we’ve become stronger because of what we faced together.”

“The COVID-19 pandemic presented a myriad of challenges for businesses and their workforce, but these unprecedented times also offered an opportunity for organizations to support their people. Companies that prioritized employee experience, recognition and employee voice have seen increased productivity, higher employee engagement and stronger loyalty,” said Jeff Cates, CEO and president at Achievers. “This year’s 50 Most Engaged winners embody what it means to be a ‘people-first’ business, and have proven how the prioritization of employee experience can help an organization withstand even the most difficult of times.”

CubeSmart owns or manages 1,259 facilities nationwide. Its operating portfolio comprises 87.2 million square feet.

Sources:
CubeSmart, CubeSmart Recognized as One of the Achievers 50 Most Engaged Workplaces in North America
Achievers, 50 Most Engaged Workplaces Awards

U.K. self-storage operator Lok’nStore Group PLC has released pre-close financial results for its 2021 fiscal year, which ended July 31. Self-storage revenue increased 20.9% year over year, while physical occupancy across the portfolio grew from 69.6 percent to 85.8 percent. Total occupied space at year-end was up 35.3%, while leased price per square foot grew 8.7%, signaling expectations for continued revenue and profit growth, officials said.

Lok’nStore has also remained active with development and believes new supply will contribute to future growth. “We have made significant progress on our new-store pipeline whilst remaining conservatively geared, with three stores currently under construction opening by early 2022 and three more about to go on site,” said Andrew Jacobs, executive chairman. “This pipeline of new stores, delivering 38% more space, will add considerable momentum to sales and earnings growth in the future.”

The earnings update didn’t include monetary figures or net profit. The company will release its full interim results for the 2021 fiscal year on Nov. 1.

Founded in 1995, Lok’nStore builds, buys or leases large warehouses or industrial buildings and rents storage units to customers on a weekly basis. It operates 34 self-storage facilities in Southern England.

Source:
Lok’nStore, Pre-Close Trading Update

Hines, an international real estate development, investment and management firm, has launched Hines U.S. Property Partners (HUSPP), a new, open-ended fund focused on industrial, life-sciences, mixed-use, multi-family, office, self-storage and other property investments. HUSPP raised $650 million from institutional investors connected to family offices, insurance companies, nonprofits and public pensions, while Hines contributed an additional $100 million. The fund is projected to top $1 billion by Sept. 30 and intends to collect $1 billion in annual investments, according to the source.

Hines has targeted submarkets within Atlanta, Dallas, Denver, Los Angeles and Seattle for opportunities, according to Alfonso Munk, chief investment officer for the Americas. Investments will leverage Hines’ corporate platform, including property management and select, value-add development projects.

“As we emerge from the pandemic, the real estate industry is at a critical inflection point, and successful managers will need to examine their portfolios in an increasingly dynamic environment,” Munk said in a released statement. “We are excited to launch this fund and begin implementing our strategy to buy, create and manage to meet investor demand, and lead the industry in redefining the future standards of core real estate.”

Hines entered the self-storage sector in 2018, with a plan to acquire and develop properties in the Southwest. It’s projects include Val Vista & Queen Creek Self-Storage in Gilbert, Arizona; Las Colinas Self-Storage in Irving, Texas; and Woodbridge Self-Storage in Wylie, Texas, according to the company website.

Founded in 1957, Hines is a privately owned global real estate investment firm with a presence in 27 countries. It has approximately $161 billion of assets under management and 180 development projects underway around the world. The firm’s current management portfolio comprises about 173 million square feet, the release stated.

Sources:
Bloomberg, Texas Firm Hines Raises $650 Million for U.S. Property Bets
Hines, Hines Secures $750 Million in Investor Commitments at First Closing of New U.S. Flagship Core-Plus, Open-Ended Fund