Updated Aug. 3, 2020 – ANNA MARIA – The Anna Maria City Commission has rejected Ugly Grouper LLC’s offer to lease the city-owned restaurant and bait shop buildings on the new City Pier.
Thursday night, the commission voted 3-2 in favor of rejecting the lease offer presented by Mike Ross, co-owner of the Ugly Grouper restaurant in Holmes Beach. The motion made by Commissioner Jon Crane and supported by commissioners Carol Carter and Amy Tripp also terminated those lease discussions and negotiations.
Although they shared many of the same concerns regarding the offer presented, commissioners Joe Muscatello and Mark Short opposed Crane’s motion and supported giving Ross and Mayor Dan Murphy two more weeks to continue their negotiations.
In the wake of the decision, the city’s immediate goal is to find a vendor to operate a bait shop and snack bar, while questions remain regarding the need for a full-service restaurant on the pier.
Ugly Grouper offer
Before Ross presented his offer, Murphy said the commission had four options:
- Accept the offer as presented and develop a final lease agreement.
- Reject the offer and continue the pursuit of a modified offer.
- Reject the offer and terminate the lease negotiations.
- Consider the offer, but delay taking any formal action.
Murphy noted the offer Ross was presenting was the result of the fact-finding discussions he and Ross engaged in since mid-May.
“I think we could have the bait shop and snack shop open this fall, with the restaurant right after that,” Ross said during his opening remarks, while participating by phone.
He then read aloud the two-page Ugly Grouper offer previously emailed to Murphy and the commissioners.
The Ugly Grouper offer was accompanied by a floor plan and seating chart that proposed 162 total seats – 72 inside the restaurant, 46 in the covered, open-air breezeway and deck area just outside the restaurant building and eight outdoor bar seats along the side of the bait shop.
The floor plan proposed 36 additional seats in the uncovered common area on the deck behind the bait shop. Ross said that area could include a shade feature to be opened or closed depending on weather conditions.
Although not designated as fishing space, the floor plan indicated approximately 7 feet of mostly open space along the rear and side edges of the T-end deck.
Ross proposed a 10-year lease with four potential 10-year extensions. He proposed paying the city $14,000 per month in base rent – $4,000 less than the $18,000 offered in the group’s original response to the city’s request for proposals (RFP).
Based on an estimate from local builder Frank Agnelli, the Ugly Grouper offer proposed it would cost $1.02 million to complete the interior buildouts of the restaurant and bait shop buildings. Ross proposed the city pay $440,650 of that amount to cover the cost of air conditioning and heating equipment, electrical and plumbing outlets, drywall, flooring and walk-in coolers.
“City either pays Ugly Grouper $440,650 cash or credits Ugly Grouper in free rent for buildout of the restaurant – approximately 2.5 years free rent,” the offer sheet said.
Ross proposed initially paying the city $10,000 or $11,000 a month when business operations commenced and applying the remaining $3,000-$4,000 per month toward the city’s buildout costs.
Ross proposed his group pay 25% of the maintenance and cleaning expenses for the pier and the public restrooms.
Ross requested 64 parking spaces. He said the number of seats were more important than the number of parking spaces.
The Ugly Grouper offer proposed the city carry hazard and property insurance for the pier and pier building exteriors that covered the perils of fire, wind, hurricane damage and loss of income by the tenant. Ross said his group would carry a $1 million general liability policy and an additional liquor liability policy.
Commission response
Carter said the offer Ross presented was “quite different than the one we saw earlier.”
She then said, “Why have you increased the seating to this extent? We were familiar with about half that number previously. I am very concerned with this number of seats. The way you’ve laid them out doesn’t allow for a fishing pier and a public pier. It’s all restaurant,” Carter said.
Ross said the proposed number of seats would create a “win-win” scenario that provided the revenue needed for the restaurant operations and the rent revenue sought by the city. He also said having less than 150 seats would require a more expensive liquor license that costs $350,000.
Murphy said he thought previous pier tenant Mario Schoenfelder was licensed for 70 to 80 seats.
During the meeting, Ross said he just received a text message confirming that Schoenfelder operated with 120 total seats.
“126 is our ask right now, with 36 public seats,” Ross told the commission.
General Manager Thad Treadwell later told The Sun that Schoenfelder operated with 96 inside seats and 24 outside seats.
On Sunday, Schoenfelder sent Murphy an email disputing those claims.
“TCPR Inc. operated 72 seats inside plus five seats at the bar – total 77 seats inside,” Schoenfelder’s email said.
Schoenfelder told The Sun in an email that he had an additional 25 outdoor seats, for a total of 102 seats.
During Thursday’s meeting, Ross said he was open to crunching the numbers to see what could be accomplished with fewer seats. He asked the commission if there was a hard line on the number of seats, but that number was not provided.
Tripp said the city carrying an insurance policy that covered the tenant’s loss of income did not sit well with her. Muscatello suggested it would be expensive and consume a significant portion of the city’s rent revenues.
Short compared the negotiations to buying a car and said, “The dealer tells you X, you come with Y and there’s some back and forth.”
Regarding the offer presented, Short said, “Are there surprises? Certainly, there are a lot of surprises. I’ve also heard a willingness to continue discussions to try to hone in and deal with some of the things I think we all have concerns about.”
Muscatello supported allowing the negotiations to continue for two more weeks, but he also questioned the need for a pier restaurant. He suggested that space might be better used for educational purposes by partnering with Mote Marine.
Public input
During public input, Bob Carter said the city already invested millions of dollars in the new pier and the RFP stated the pier tenant would be provided with empty shells that included roughed-in plumbing and electrical.
Carter shared his wife’s concerns about the additional seating. He said the pier is a public space to be shared by visitors, people fishing and restaurant patrons.
“When I looked at this plan, it looks like we built this for a restaurant,” Carter said, noting he’d be happy with a restaurant that only had a beer and wine license. “I urge the city not to accept this as is.”
Former City Commissioner Doug Copeland participated in much of the pier replacement decisionmaking that occurred before he left office in December.
“I’m very disappointed,” Copeland said of the offer presented.
Copeland said the offer did not reflect what was proposed in the group’s original RFP response. He noted the RFP plainly stated the pier tenant was responsible for the interior buildouts and he encouraged the commission to reject the offer.
Post-meeting comments
After the meeting, Murphy commented on the commission’s decision.
“I support the commission’s decision because I think at some point in the future the city will be in a better position to rent that space out. Financially, we’re in good shape. We reconstructed that pier debt-free. That pier is totally paid for. If we had debt with that pier it would be a completely different picture. I think this presents an opportunity for the city to look at other alternatives,” he said.
“I think it was made clear that we don’t need to have a restaurant. But we do need something, and we need it quickly,” Murphy said regarding a bait shop and snack shop that offers a limited menu. “I’m going to pursue that vigorously.”
On Friday, Treadwell provided a statement.
“We appreciate the opportunity to work with the commission and Mayor Murphy on this project to reopen the Anna Maria City Pier bait shop and restaurant. We are disappointed we weren’t able to extend negotiations another week to clear up some miscommunications to try to reach an agreeable deal and open this fall. We are excited to see the historic City Pier reopen and will support whoever the new tenant will be,” Treadwell said.
Friday evening, Murphy sent commissioners an email regarding the pursuit of a bait shop/snack shop vendor.
“As a result of our meeting last night, I was given direction to explore the provision of takeout food and beverage service from the bait-shop/snack bar on the City Pier. Accordingly, we are in the process of preparing an RFP to solicit bids for that type of service. This should be finalized and ready for your review in the next seven to 10 days, or less,” Murphy wrote.
“Since our meeting last night, four local restaurateurs have contacted the city and expressed a keen interest in providing takeout food and beverage service from the bait shop facility. Our intent is to solicit bids from any and all interested parties once the RFP is prepared and approved. In the meantime, please send any of your concerns, ideas or points of interest which you would like included in the RFP,” Murphy wrote.
