ANNA MARIA – The Anna Maria City Commission has rejected Mario Schoenfelder’s final offer to lease the restaurant and bait shop buildings at the end of the new Anna Maria City Pier.
The commission reached this decision with a 5-0 vote at a special meeting on Friday, Jan. 10. A request for proposals (RFP) will now be issued seeking lease offers from other restaurant operators.
Schoenfelder participated in Friday’s meeting by telephone from Germany. He joined Mayor Dan Murphy and Commissioners Carol Carter, Jon Crane, Joe Muscatello, Mark Short and Amy Tripp in a 45-minute discussion about the written lease offer he submitted in late December. Crane also participated by phone.
Schoenfelder offered to pay $8,000 per month in initial base rent. He also offered to pay the $865,000 his architectural team estimated it would cost him to complete the interior buildouts and install the equipment needed to operate a restaurant and bait shop.
Schoenfelder proposed the first six months of the new 10-year lease be rent-free, with an annual Consumer Price Index-based increase starting after three years. Schoenfelder’s final offer was $4,000 per month less than the $12,000 he offered last fall, which also included $500,000 for the interior buildouts.
Schoenfelder previously rejected two lease options proposed by the city. One option proposed an initial base rent of $21,600 per month. The other proposed $18,900 per month, with an additional $250,000 up front.
When Schoenfelder rejected those options, the commission gave him until Dec. 31 to submit his final offer. The commission also authorized Murphy to prepare an RFP in case his final offer was rejected.
Signed in 2000 with an initial base rent of $5,000, Schoenfelder’s current lease expires on Dec. 15, 2020. The last rent payment he made before the old pier closed in 2017 was $11,898.
Carter asked Schoenfelder why he offered $8,000 when he was paying approximately $12,000 before.
Schoenfelder said his previous $12,000 offer was based on contributing $500,000 for the buildouts. He said the $8,000 figure factored in the additional $365,000 for his buildout and equipment costs.
The City Pier project has an estimated total cost of approximately $5 million. Murphy said city taxpayers are responsible for $2.6 million of that and it would take 20 years to recoup those costs if the commission accepted Schoenfelder’s offer.
Addressing another concern Schoenfelder raised in his written offer, Murphy said the city would take out an insurance policy on the pier that would cover the improvements made by the pier tenant, minus any items that could be removed by the tenant. Murphy said the estimated $50,000 in annual insurance costs would add seven more years to the 20-year cost recovery timetable for Schoenfelder’s offer.
“I have a concern about how much obligation the citizens of Anna Maria are going to have if we accept this proposal,” Carter said.
Short said the city has already paid $1.1 million of its $2.6 million pier project obligations, which leaves approximately $1.4 million in remaining city obligations.
Short said it was right to give the current pier tenant the first opportunity to lease the new pier buildings, but he believes it’s now in the city’s best interest to see what other opportunities exist.
Crane said he supports issuing the RFP and receiving additional offers because there’s such a large discrepancy between what Schoenfelder and the city think the rent should be.
“The RFP process helps you find the rent number, besides finding the vendor,” Crane said.
He said he hoped Schoenfelder would participate in the RFP process.
“If I would take part in the RFP, my proposal would be the exact same thing. I wouldn’t change one number,” Schoenfelder said.
“I’d like to see more options,” Tripp said.
“Let the market set the rate. The market will tell us what the rent’s worth,” Muscatello said.
During public comment, part-time Holmes Beach resident Maureen Myers said the pier restaurant needs to be economically accessible to a wide range of pier users. She also asked how the city calculated its proposed rent options.
Former Commissioner Doug Copeland encouraged the commission to issue the RFP.
“This offer is unacceptable, and I encourage you to reject it,” he said.
In response to Myers, Murphy said, “This is a plain and simple math problem. How much do you have invested and what’s the timeframe you want it paid back on?”
“Let’s let the market decide whether this should be a restaurant or not. Maybe it should be some sort of public conveyance. Parks don’t have a payback over 10 years. It could ultimately be that the pier is not the venue for a restaurant because it won’t pay for itself. Going the RFP route, the market will decide what’s in the best interest and what the payback will be,” Murphy said.
Murphy said it’s not yet known how the remaining months of Schoenfelder’s current lease will be addressed.