Pier tenant submits final lease offer

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Pier tenant submits final lease offer
It is not yet known who will lease the restaurant and bait shop buildings on the new City Pier. - Joe Hendricks | Sun

ANNA MARIA – Mario Schoenfelder has submitted his final offer for the lease of the restaurant and bait shop buildings being built at the T-end of the new Anna Maria City Pier.

Dated Dec. 22 and addressed to Mayor Dan Murphy and the members of the Anna Maria City Commission, Schoenfelder’s final offer proposes a base rent that’s $4,000 less than his previous offer.

“I previously offered a monthly rent of $12,000 based on the total buildout and equipment costs of $500,000. I now have received actual bids for buildout and equipment through the Schimberg Group (the architectural firm that designed the pier buildings) adding up to $865,000. Therefore, I had to adjust the rent that I am offering,” Schoenfelder stated in his written offer.

“My offer is a monthly rent of $8,000 with the first six months rent-free, a CPI-based (Consumer Price Index) adjustment kicking in after three years and a 10-year lease with two five-year options,” the offer states.

The Anna Maria Commission will discuss Schoenfelder’s offer on Thursday, Jan. 9 and may decide that night to accept it or reject it. The meeting starts at 6 p.m.

In October, Schoenfelder rejected two lease options Murphy presented. One option proposed an initial base rent of $21,600 per month with a 3% percent annual increase or an annual CPI adjustment. The second option proposed a base rent of $18,900 per month with a $250,000 up-front payment upon signing and the same annual increases.

In November, the city commission gave Schoenfelder until Dec. 31 to submit his last, best and final offer to continue his pier-based business operations after his current lease expires on Dec. 15, 2020.

The commission also took the precautionary measure of authorizing Murphy to prepare a request for proposals (RFP) for the lease of the pier buildings and have the RFP ready at the Jan. 9 meeting in case the commission rejects Schoenfelder’s offer.

If issued, the RFP would seek proposals from other restaurant operators interested in leasing the city-owned buildings at the T-end of the new pier. The pier walkway and T-end deck area are expected to open to the public in February, before the future pier tenant’s interior buildouts are completed.

Current lease

Schoenfelder signed his original pier lease in 2000. According to that document, Schoenfelder’s base rent was $9,240 in September 2017 when the old pier was closed due to damage the pier decking and pier buildings sustained during Hurricane Irma.

The original and current lease called for Schoenfelder’s monthly base rent to increase to $10,800 on Dec. 16, 2018 and continue at that rate until the lease expired in late 2020. The monthly base rent figures listed in the current lease do not include the annual cost of living increases that are part of the current lease.

Schoenfelder’s monthly rent payments were suspended when the pier closed. His most recent payment was $11,898 paid on Sept. 5, 2017.

Rent increase

“The rent the city is demanding represents increases of 82% or 59% compared to the pre-storm rent. This does not allow for substantially increased restaurant pricing, nor would this be accepted by the public. Do you, mayor and commissioners of the city of Anna Maria, honestly believe and expect the City Pier Restaurant to sell successfully a cheeseburger for $18-$20?” Schoenfelder asked in his final offer.

“An increase of $116,000 or $84,000 annually is impossible to be covered through increased prices and increased volume of revenue. Additional annual rent of $116,000 would not only reduce the operation’s income dramatically, it would substantially increase the chances of the restaurant suffering ongoing losses and ultimately failing,” the offer states.

Schoenfelder’s offer notes the average profit margin of a full-service restaurant in Florida is 3-5%. It also notes Schoenfelder has owned the nearby Rod & Reel Pier restaurant since 1999 and he feels this provides him with knowledge regarding restaurant operations on Anna Maria Island.