ANNA MARIA – Current City Pier tenant Mario Schoenfelder is requesting a $65,000 settlement in exchange for the early termination of his pier lease agreement that expires Dec. 15.
In response to Schoenfelder’s request, the city commission authorized City Attorney Becky Vose to attempt to negotiate a more favorable settlement for the city.
Meanwhile, Mayor Dan Murphy is attempting to negotiate a new long-term pier lease with Ugly Grouper restaurant co-owner Mike Ross and General Manager Thad Treadwell.
Vose, Murphy and the commissioners discussed Schoenfelder’s request on Thursday, May 28.
Murphy referenced two letters that attorney Lori Dorman sent the city on behalf of Schoenfelder and his company, TCPR Inc. Those letters pertain to the lease Schoenfelder and the city signed in 2000 and later extended.
“All of you have been provided with Mr. Schoenfelder’s letter of March 27, where he demanded to have the pier back so that he could operate a restaurant. And then his subsequent letter of May 21st, where he said he didn’t want the restaurant back, but now he would like $65,000,” Murphy said.
In her May 21 letter, Dorman wrote, “TCPR is willing to enter into an early termination of the lease. In return, TCPR expects the city to compensate it in the amount of $65,000. This amount represents a portion of the lost income TCPR has incurred as a result of the city’s delays.”
Regarding that letter, Murphy said, “His contention is that since we didn’t have insurance of the pier – since we were self-insured – that we could have rebuilt the pier a lot quicker with insurance, and thus the lost revenue. Never once was the pier construction held up as a result of not having funding.”
Murphy said it took more than a year to get permits from the Army Corps of Engineers and several other permitting agencies. During that time, the city secured project funds from FEMA, Manatee County tourist taxes and the state.
Murphy said the request for proposals process created additional delays, as did two tropical storms and a construction barge crashing into the pier.
“The money was never an issue,” Murphy said.
Murphy provided the commission with three options.
“We can pay the ransom of $65,000 and move on, or we can authorize our city attorney to attempt to negotiate a settlement outside of litigation, or we could proceed with the buildout. We could turn the pier over to him as he requested in his March 27th letter and begin charging him rent. The Ugly Grouper is more than willing to work with us on any one of these three alternatives,” he told the commission.
Murphy said the Ugly Grouper representatives are willing to wait until mid-December to take occupancy of the pier buildings if necessary.
Murphy said a court battle would cost the city money even if the city prevailed and he recommended authorizing Vose to attempt to negotiate a settlement instead.
“If that fails, then we can move on to option three, complete the buildout and begin charging rent,” Murphy said.
“Have our city attorney try to negotiate a settlement and let’s move on,” Commissioner Joe Muscatello said.
“Option two is the most appealing one to me, although I do feel we need to defend our city against this. I don’t think there’s the evidence that he claims in these letters that he’s been harmed because of anything the city has done,” Commissioner Amy Tripp said.
“We’ve got a new concessionaire, we’re ready to negotiate with them. Let’s get this behind us. I trust attorney Vose to put a good faith offer in front of Mario’s attorneys. And if they don’t accept it, I think we can win the lawsuit. But I’d rather not, I’d rather get it behind us,” Commissioner Jon Crane said.
Commissioner Mark Short said he’s read Schoenfelder’s lease several times.
“There’s nothing in the lease agreement that says the city was required to insure the entire pier. The whole premise of not having insurance is moot. With respect to repairs being done in the event of a casualty, the tenant is also partially responsible to conduct repairs on certain portions of the leased premises should a casualty occur, which obviously did,” Short said.
Murphy ordered the old pier and pier buildings closed in September 2017 after Hurricane Irma removed a large portion of the bait shop roof, damaged the restaurant building roof and damaged much of the old pier’s T-end decking.
“The lease agreement specifically calls out that if a casualty occurs the tenant’s sole remedy is limited to the abatement of rent, which is what the city has done,” Short said.
Schoenfelder made his last $11,898 monthly rent payment on Sept. 6, 2017.
Short said the city attorney should attempt to negotiate a settlement agreement that factors in these lease terms not referenced in Dorman’s letters.
Vose said she agreed with Short’s interpretation of Schoenfelder’s lease.
