Rotten Ralph’s restaurant will have until the Bradenton Beach May 18 city commission meeting to pay its debt in a final attempt to remain the leaseholder on the Historic Bridge Street Pier.
On April 9, commissioners voted to terminate the restaurant’s lease and concessionaire Dave Russell was served with default papers the following day.
A lot has changed since that April 9 meeting, in particular the amount of money city attorney Ricinda Perry said Russell owes the city.
At its April 18 meeting, Perry said the previous $50,000 Russell owed the city was actually $266,000 according to her calculations.
Russell appeared at the meeting with attorney Bill Kaklizesq.
Mayor John Shaughnessy said he didn’t think the scheduled discussion should take place since Russell retained an attorney, but Perry said no litigation has been enacted, so the commission should feel free to hear what they had to say.
Kaklizesq said he was there to request a 30-day delay on the eviction process from the city.
“Within that time period, we will negotiate in good faith,” said Kaklizesq.
Kaklizesq said the negotiations would either lead to an amicable termination that would allow his client time to remove his equipment from the restaurant or negotiate the amount of money owed, pay and renew the lease.
Kaklizesq said there is no question his client owes the city money, but he disputed the claim by Perry of more than $266,000.
“There are some problems with the enforceability of those claims,” he said. “Having said that, my client agrees there are back fees due, but not that amount.”
Kaklizesq said it would be in the city’s interest to avoid expensive litigation and collect the actual amount of money due to them through negotiations.
“I believe some of the fees are legitimate and absolutely due,” he said. “I don’t want to state our case here, however, and I don’t want to aggravate people. But there are obvious problems with your claims against my client. We’re not saying we don’t owe you, but no way is it $266,000.”
Commissioner Ric Gatehouse said he, too, did not understand how the debt rose from $50,000 to Perry’s calculation of $266,000.
“In all the discussions before this April 18 meeting, the amount the city said he owed was $50,000 plus fees totaling what has been a moving target from $72,000 to $79,000,” he said. “How did we end up with $266,000?”
Perry said she took it upon herself to calculate the debt when it became clear that an eviction would be necessary.
“It became my responsibility of doing due diligence,” she said. “So I asked for every piece of the budget for the property, everything that has been paid and then did the calculations.”
Gatehouse said it didn’t make sense.
“I’m sorry, but if this is the way we do our accounting, we are probably losing a lot of money elsewhere,” he said.
Commissioner Gay Breuler opposed working with Russell further and reiterated her position.
“I have a problem with the whole thing,” she said. “We’ve given him time. He hasn’t shown how this would be paid. I’m not in favor of giving him more time. It’s just an exercise in futility. It’s time to end this as quickly and decently as possible.”
Gatehouse said he disagreed, adding the city offered Russell a deal and he did all he was asked.
The deal had to do with Russell signing his restaurant equipment over to the city to cover his debt with an option to purchase the equipment back.
Russell said he found himself in financial trouble following the June 2012 tropical storm that closed the pier a few days, but also ensured long-term closure of the adjacent floating dock that brought boaters to the pier.
Russell said he can afford the monthly rent, but that the city prevented him from making partial payments, and so the debt continued to escalate.
The city also began charging him $100 per day in late penalty fees.
“So we said we aren’t going to take your payment, but we are going to charge you $100 a day for not paying it,” said Gatehouse. “I don’t think that’s fair.”
Gatehouse said three weeks ago the commission asked Russell to clear the liens on his equipment, and “he did that. Then we told him ‘too bad, you have to go.’”
Gatehouse said that’s not good business.
“That’s not the kind of business this city should be doing,” he said. “If we tell a man we are going to do X, Y and Z, then we should do X, Y and Z. Apparently he has financing to pay his debt, so we should negotiate.”
Perry said there was never an equipment deal.
“There were discussions that the idea was proposed to the city.” He was told to make a presentation to the commission and the commission would need to vote on it, she said.
Shaughnessy said the city has provided several extensions to the lease already.
“I haven’t seen any paperwork,” said Shaughnessy. “All I’ve seen is talk. And No. 1, a contract is a contract. If you don’t read it before you sign it, whose fault is it?”
Shaughnessy reminded the public that it’s not the commission’s money at stake, “it’s your money.”
Vice Mayor Ed Straight said he would agree to giving Russell an additional 30 days.
“If we act today, we aren’t going to get anything,” he said.
Commissioner Jan Vosburgh said Russell should have been more responsible.
“You tried to make a go of it and it didn’t work,” she said. “You haven’t made an effort to pay.”
Russell disagreed. “That’s not true,” he said. “I was not allowed to pay the rent once I was behind. I was under the impression that the equipment proposal — which was a deal brought to me by the city, not brought by me to the city — would resolve this.”
Russell said he did everything the city asked him to do and “I walked in here at the last meeting assuming we were good to go. I did what I was asked, and that didn’t happen. It was voted to terminate the lease.”
Russell also said he has financing in place, but has asked the city “several times” for a financial breakdown of his debt and he never received it until he hired an attorney. He said only then was it finally given to him.
“I think this has gotten out of hand,” he said. “No matter what I did, it’s going to turn against me. No matter what hoops I jump through, I’m going to be told that’s not going to work.”
Russell said he believes the debt to be around $54,000 and he can pay it, but he said he will not pay the fees and penalties calculated by Perry.
“I think $266,000 is outrageous,” he said.
Perry gave commissioners three options: Either allow her to continue the eviction process, delay the eviction and settle an amicable termination agreement or delay the eviction and negotiate a payment with an option to negotiate a new rental contract.
After much discussion, commissioners agreed to delay the eviction process for 30 days and allow Russell to pay a negotiated fee to cover his debt.
For now, the restaurant remains open, depending on the negotiations between the city commission and Russell.
Russell said after the meeting that he believes it will all work out and he’s hopeful that Rotten Ralph’s will remain a part of the Bradenton Beach community.
The restaurant employs 15-20 people.