The Kearns Group withdraws from Jaycee Park concessionaire proposal
Citing the city’s financial expectations, concerns about parking and programing, and the inability to come to mutually beneficial terms, The Kearns Group withdrew its proposal to operate concessions at Jaycee Park this morning.
“After careful review and financial analysis, The Kearns Group has decided to withdraw its proposal and conclude negotiations,” Zak Kearns, president of the The Kearns Group said in his June 6 letter to Cape Coral City Council, the city manager and the city attorney. “While we explored several approaches to support the project’s success, we determined that, under the current structure, the opportunity does not align with the investment, operational commitment, and risk required to move forward.”
He cited a number of factors.
“Several factors influenced our decision,” the letter states. “First, we believe Jaycee Park’s long-term success depends on consistent programming that drives visitation and community engagement. Because the programming approach is still evolving, a significant portion of that responsibility would fall to the concessionaire, creating additional operational uncertainty.”
The second concern was a lack of enough parking for the type of events the city hopes to hold that also would make also help make the concession – for a Bistro that would serve food, beverages and offer live entertainment in a designated area at the city park – financially viable for the investment required.
“Parking is also a concern,” the letter states. “The existing 126 on-site spaces may be insufficient during peak demand generated by the park’s amenities and a restaurant/bar operation. As demonstrated during the park’s grand opening, future parking and transportation solutions may be necessary to support growth and the overall visitor experience.”
There were other issues were with the city’s financial terms, including the upfront investment.
“We were also unable to reconcile the proposed economic terms with the level of investment required,” Kearns said. “Compared with other City concessions, Jaycee Park presents a unique operating environment, including a smaller facility footprint, limited parking, no construction credit, and a business model heavily influenced by outdoor operations and weather conditions.
“Under the proposed structure, the operator would be expected to invest more than $2 million in acquisition, buildout, a liquor license, rent obligations, and other operating expenses while operating within a shorter term and with limited flexibility. Combined with uncertainty surrounding weather impacts and the approval, permitting, and construction timeline for a boat dock, we could not identify a path that provided sufficient confidence in long-term financial sustainability,” the letter states.
The still-to-come water amenities — boat slips and docking — at the park in which the city has invested $18.7 million for its total rebuild thus far, are an uncertainty in terms of timing, Kerns wrote.
“A dock would be a valuable enhancement, attracting visitors arriving by water and supporting activity within the park and the success of a restaurant and bar operation. However, without greater certainty regarding approvals and development timelines, it is difficult to accurately assess the project’s viability and return on investment,” the letter states.
The bottomline is the parties simply could not come to an agreement that worked, Kearns said.
“Throughout negotiations, we proposed alternatives intended to better balance risk and opportunity for both parties. We appreciate the City’s willingness to engage in those discussions, even though we were ultimately unable to reach terms that met the objectives of all stakeholders,” Kerns wrote.
“As a long-term resident, business owner, and property owner in Cape Coral who has invested heavily in the community, I remain committed to the City’s continued success. While I cannot responsibly commit capital and resources to this project under the current framework, I remain supportive of efforts to create a successful outcome for Jaycee Park and the community it serves,” he said.
“Accordingly, The Kearns Group is formally withdrawing its proposal and concluding negotiations regarding the Jaycee Park concession opportunity effective immediately.”
Jaycee Park is at the end of Beach Parkway on the Caloosahatchee Riverfront.
The city plan to rebuild the park called for removing the invasive Australian pines along the shoreline and razing the near-12-acre site to make way for a waterfront boardwalk, walking paths, new playgrounds and a splash pad, band shell, recreation areas and the Bistro and Food Truck Court.
The plans was the subject of months of controversy with nearby neighboring residents, including near-by condo owners, protesting the removal of the pines and mature shade trees for a more developed park they said could not handle the traffic it would generate. They also decried the plans for a public-prate partnership to operate concessions, particularly the Bistro, which would serve alcohol.
The park reopened on April 30 and held a grand re-opening celebration on May 9.
To reach VALARIE HARRING, please email vharring@breezenewspapers.com