City sends notice terminating concessionaire agreement for Jaycee Park
The city of Cape Coral has sent a notice of termination for the concessionaire agreement for Jaycee Park citing the “failure to remit the committed investment upfront payment.”
The letter to the principals of The Reef Cape Coral LLC, Stephan Soloway and Michael Amato is dated Monday, March 31, and signed by City Attorney Aleksandr Boksner.
“Dear Mr. Soloway and Mr. Amato: This correspondence shall serve as formal notification that the City of Cape Coral, Florida (‘City’) is exercising its right to TERMINATE the ‘Concessionaire Agreement Between City of Cape Coral, Florida and The Reef Cape C’Concessionaire Agreement’, pursuant to Section 19.4 of Concessionaire Agreement, for the failure of The Reef Cape Coral LLC to remit the Committed Investment Upfront Payment (‘Upfront Payment’) of $1,370,488.00, plus late charges and interest, within the time period provided to cure The Reef Cape Coral LLC’s monetary default,” the letter states.
The letter outlines a number of deadlines the city says the firm with which it contracted to provide concession-related services as part of the city’s redevelopment of the riverfront park off Beach Parkway, including the final deadline provided in the city’s March 18 letter of default.
The letter states that the city rejects the contract modification The Reef Cape Coral LLC submitted on March 21 in lieu of the payment and penalties the city says it is owed.
“In that regard, please be advised that the City respectfully rejects your alternative proposal for providing the Upfront Payment and accumulated penalties,” the city letter from Boksner states. “The city herby exercises its legal option to TERMINATE the Concessionaire Agreement for The Reef LLC’s defaults on the Upfront Payment.”
The LLC’s response letter cites issues related to its ability to obtaining upfront financing for the agreed-to public-private partnership between The Reef Cape Coral and the city.
“We have a preapproval from a lender, but they don’t want to release the funds until 30 days of opening. Since we are not going to own the building, they can’t give it to us as a construction loan because they can’t lien the building,” Soloway said in an earlier interview. “More than anything, it’s a timing issue.”
“Quite simply, it is very difficult to get a business loan without a building for the business,” the LLC’s response letter to the city states.
Soloway said the letter they wrote to the city offers to give the city its deposit – the owner equity for the bank as an amendment to the contract.
According to the letter, “we are proposing the city accept a non-refundable earnest deposit in the minimum amount of $425,000. The deposit includes late fees and penalties we agreed to pay in return for the 90-day extension totaling $68,264.06 as of today, March 20. The remainder $356,735.94 will be credited to the total investment bringing the balance due down about 25% to $1,013,264.06. As part of the pay plan, we also would agree to pay interest costs on this outstanding balance as determined by the city. Once we close on the loan, the balance and interest will be paid to the city.”
The city’s notice of termination to The Reef does not affect the other elements of the city’s redevelopment plans for the park, which also include walking paths, a riverfront boardwalk, band shell and inclusive playground.
The city issued a release concerning the letter Monday afternoon.
“Please note that despite this termination, construction of the park will continue as planned,” the release from the city’s Communications Office states.
“At this time, next steps regarding the concession area have not been determined. While the park’s construction will move forward under the existing comprehensive agreement, any decisions concerning food and beverage operations will require council approval.”
Editor’s note: This story has been updated to include information provided in a statement from the city.