Anna Maria again is fishing for a tenant.
At a July 30 meeting, commissioners voted 3-2 to 86 the negotiations with the Ugly Grouper of Holmes Beach for the vacant restaurant and bait shop on the new city pier, 101 Bay Blvd.
Commission Chair Carol Carter and Commissioners Jonathan Crane and Amy Tripp voted to halt negotiations and Commissioners Joe Muscatello and Mark Short opposed the motion.
Ugly Grouper owner Mike Ross attended the meeting by phone and repeated his offer to negotiate his suggested lease terms.
The commissioners voted in May to approve the Ugly Grouper’s bid, entered negotiations and hoped to have the restaurant and bait shop operating in late 2020 or early 2021.
The new pier was built in the footprint of the 1911-built pier that was demolished by the city after being damaged by Hurricane Irma in September 2017.
Construction began in 2018 and the city opened the pier with limited hours to sightseers and anglers June 19.
The Ugly Grouper had been the runner up to a bid by Sean Murphy, Holmes beach restaurateur, and became the top choice when Sean Murphy turned down the city’s acceptance of his offer.
At the July 30 meeting, Ross proposed:
- A buildout costing $1.02 million, with the city to pay for permanent items, including air conditioning, electrical and plumbing, drywall and flooring;
- The city pay or provide rent credit to the Ugly Grouper for $440,650, about 2.5 years rent, for the buildout;
- The city provide the restaurant with 64 parking spaces, including 10 for employees, based on 162 seats;
- The Ugly Grouper be responsible for 25% of pier maintenance;
- The city carry hazard, property and flood insurance for the building, as well as loss of income, risk, general and excess liability insurance, while the restaurant provides $3 million in liability coverage;
- The city provide an initial 10-year lease, with four 10-year renewal options;
- The restaurant pay $14,000 per month in rent.
The proposal included a floor plan and seating chart.
“I think this is fair,” Ross said. “We could have asked for different things, but at the end of the day, it’s a fair partnership to move forward.”
The Ugly Grouper’s initial bid set the 10-year lease at $2,376,000, including the bait shop.
The offer included an option to pay $18,000 per month for the first year or, as an alternative, $12,000 per month base rent and 2% of profits, estimated at $6,500-$11,650 per month, for an estimated monthly rent of $18,500-$23,650, based on Ugly Grouper’s projected annual revenue of $4 million-$7 million.
The offer stated the Ugly Grouper was approved for a $2 million line of credit.
The restaurant attached a $1.01 million estimate from local builder Mason Martin for the buildout.
Questions and comments
Carter asked Ross about the proposed 162 seats.
She said the seating arrangement appeared to impinge on anglers and sightseers.
Ross said the previous tenant had 120 seats and more seating would result in increased revenue.
The Ugly Grouper’s bid in April did not include a seating chart but the mayor said Feb. 26 that the restaurant, including outdoors, could support up to 150 seats.
Carter said if the city must pay $440,650 for the buildout, that means 2.5 years with no income.
Ross said he was willing to spread out the cost over time.
“I want to create a win-win,” Ross said. “I’m open to listening.”
Crane asked what Ross would do if the city could not provide 64 parking spaces.
“People get there without a parking spot,” Ross said. “We’ll figure that out.”
Crane said more seats allow for a less costly liquor license, yet, the Ugly Grouper proposal is calling for $440,650 paid by the city and lower monthly rent.
With less than 150 seats, the Ugly Grouper must pay $350,000 for a full service liquor license, or settle for beer and wine sales.
Ross said his request was reasonable, as items included in that cost are permanent to the structure. He also said the proposed seating would be 126 seats, with 32 seats in a common area.
Tripp asked why the proposal includes 25% of pier maintenance instead of 50/50 or more.
Ross said anglers create the most mess, compared with restaurant patrons, who would eat and leave.
Resident Bob Carter, husband of Commissioner Carol Carter, spoke during public comment.
“For me, it seems like there is an amazing increase in cost for the city, which has already invested millions of dollars to build the pier,” he said, encouraging commissioners not to accept the proposal.
Ross said Sean Murphy’s proposal included $300,000 for the buildout, assuming HVAC was provided by the city. He said he is offering twice what Sean Murphy offered, with the city paying for the HVAC. He added that HVAC could cost the city less than his estimate.
“I’m willing to work with you,” he said. “I am willing to discuss what is reasonable.”
But Crane said the Ugly Grouper offer was “a day late and a dollar short” and he motioned to terminate the lease discussion. Amy Tripp seconded the motion.
The motion passed 3-2.
The mayor said he hoped to provide commissioners with alternatives at their next meeting.
“This pier needs to be opened up,” he said. “People need to be able to get a beer, a sandwich and enjoy their time on the pier.”
The next commission meeting will be at 2 p.m. Thursday, Aug. 13, at city hall, 10005 Gulf Drive.