General Assembly Could Lose Startups Thanks To A Lease Debacle

General Assembly founders Adam Pritzker Jake Schwartz Brad Hargreaves Matt Brimer

Photo: Dan Frommer, Business Insider

General Assembly, the beautiful new startup space in New York, has been hit with a minor scandal, and startups are talking about leaving.General Assembly had been keeping eight startups on the seventh floor of its building. But General Assembly’s cofounders neglected to lock down the space with a long-term lease.

Now the company that owns the building is taking the seventh floor back, forcing those startups to move to the 15th floor, a much less attractive space. Note: The main (4th) floor with the majority of General Assembly startups, like Yipit and Fashism, is still fine.

The affected companies are angry.

“We’re a startup, we’ve made mistakes before. But our mistakes didn’t affect other companies,” one of the CEOs told us. “If we had known we’d have to move so soon we never would have signed up for General Assembly.”

Matt Brimer, cofounder of General Assembly tried to pacify these concerns, telling us, “We prioritise our community above all else…Unfortunately, the landlord for the Annex told us with almost no warning that they were taking the space back for themselves.”

He added, “We quickly found a solution on the 15th floor to make sure our startups in the Annex would still have a great home — which we believe is actually an upgrade from the 7th floor space.”

Our source says the 15th floor is worse space because it’s tucked in the back of an ad agency. It’s not as spacious, or intimate. “It’s too quiet,” says our source, who worries the startups won’t be able to collaborate as freely.

The startups getting moved are considering just walking away from General Assembly.  They’re all Dogpatch Labs “alumni” and want to stick together.

Here’s the email Brimer sent out to the startups that were going to be moved:

Hello all,

As you know, the 7th floor Annex space was originally structured as a temporary solution for us to have some interim space during the late-stage construction and transition stage into the 4th floor. The 7th floor space was never intended to be a long-term solution, and we’ve known it’s had issues from the beginning. Furthermore, we’ve taken your concerns and complaints on the heating situation, lack of light, lack of bathroom (!), and more to heart.

With all this in mind, we’ve taken steps to find a better solution, and over the last few weeks we’ve managed to arrange for an upgraded space that should alleviate most — if not all — of the issues on the 7th floor. Starting March 1, we’ll be moving out of the 7th Floor and into a much nicer sublet space (located in our own area within an ad agency) on the 15th Floor. This space has fully functional bathrooms, a receptionist, more natural light, a shared conference room, water cooler, cleaning service… and is overall a nicer space than the Lehr sublet.

I’d like to take a small group up the 15th floor on Tuesday at 3 pm so you all can get acquainted with the new setup — please let me know if you’re interested, and we’ll meet on the 7th floor then.

We’re anticipating moving days will be Monday, Feb 28 and Tuesday, March 1, so please plan on those days being a transition time. I’ll have more info soon on further details, but for now look forward to nicer digs coming soon!


Don’t Miss: Photos Of General Assembly, New York’s Ridiculously Gorgeous New Startup Space »

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