ANNA MARIA – City Pier tenant Mario Schoenfelder has rejected Mayor Dan Murphy’s proposed rental rates for the new pier-based restaurant and bait shop currently under construction.
On Sept. 30, Murphy emailed Schoenfelder two options for a new 10-year lease with two five-year extensions. Option 1 proposes a base rent of $21,600 per month, with either a 3% annual increase or an annual adjustment based on the Consumer Price Index (CPI). Option 2 proposes a base rent of $18,900 per month, a $250,000 up-front payment due upon signing and the same annual 3% increase or CPI adjustment.
Neither base rent option includes the still-undetermined additional rent the tenant will pay for the shared maintenance of the new pier facilities.
On Oct. 4, Schoenfelder sent Murphy an email response that said, “I am sorry, but neither a base rent of $21,600 nor of $18,900 is acceptable for me. Amounts like this would eat up almost my whole expected income and there would be absolutely no room to build financial reserves, which are a must.”
Schoenfelder’s email referenced the lease agreement the Anna Maria Oyster Bar (AMOB) has with the city of Bradenton Beach for the restaurant space at the foot of the Bridge Street Pier. His calculations also took into account two additional spaces AMOB leases from the city and subleases to other tenants.
“You are asking for $259,200/$226,800, that is three to four times the AMOB rent and both restaurants are comparable in size/number of seats. And that’s just the base rent. I am referring to my offer which is $12,000 monthly that is still more than twice what AMOB pays. It does not make sense, at least for me, to offer a rent that cannot be realized by sufficient revenue and income on a sustained basis,” Schoenfelder wrote.
According to the 2015 lease, AMOB agreed to pay the city of Bradenton Beach $32,000 in base rent for the first year, plus 2% of gross revenues. In years two through five, the base rent is $42,000 ($3,500 per month), plus 2% of gross revenues. In 2021, AMOB’s annual base rent will begin increasing by 3% per year.
Current lease
In 2000, Schoenfelder signed the pier lease that required him to pay an initial base rent of $5,000 per month and included pre-determined rent increases every two or three years.
According to that lease, Schoenfelder was paying $9,240 per month in September 2017 when the hurricane-damaged pier and pier buildings were closed. Schoenfelder’s rent payments were then suspended and remain suspended until the new pier facilities are available.
Schoenfelder’s current lease calls for him to pay $10,080 per month from Dec. 16, 2018, until Dec. 15, 2020, when his lease expires.
Murphy recently told the commission he expects the exterior shells of the new bait shop and restaurant buildings to be completed by Mason Martin Builders in January or early February, with the interior build-out of those spaces to follow.
If Schoenfelder and the city cannot agree to a new lease, this could create a potential scenario in which the pier buildings would be available for interior build-out by a tenant who would only have 10 months remaining on his existing lease.
Additional concerns
On Oct. 16, 17 and 18, Murphy and Schoenfelder participated in an email exchange that addressed Schoenfelder’s desire to use a contractor other than Mason Martin Builders for the interior build-outs.
In that exchange, Schoenfelder suggested he was being forced to use the city’s chosen contractor. Murphy countered by stating that Mason Martin is contracted to build the exterior building shells and is not contracted to do the interior build-outs. Both men agreed that using a different contractor for the interior build-out could result in at least four more weeks of additional delays.
In his Oct. 17 email to Murphy, Schoenfelder wrote, “I don’t want to be pushed to make an offer that is not based on reliable facts and I don’t want to be made accountable for the delay created by a contractor the city has chosen. At this point, I cannot provide a new date for presenting my offer.”
In his Oct. 18 response, Murphy wrote, “I strongly recommend that you secure other contractor (or contractors) immediately to provide their estimates as to the costs involved so that you are comfortable with the financials. Accordingly, I would recommend you plan to tender your final offer in eight weeks, by December 13.”
Related coverage
Commission clarifies pier lease parameters
Pier lease talks gain momentum
