City hopes to finalize Boathouse agreement
An agreement with the Kearns Restaurant Group, which operated the Boathouse Tiki Bar & Grill before Hurricane Ian ravaged much of the Yacht Club, is near city officials said Wednesday.
City Manager Michael Ilczyszyn said that before Cape Coral City Council went on its summer hiatus, the elected board asked staff to conclude the terms of the Boathouse by the Wednesday meeting or he would be directed to go in a different direction.
They are near but not quite there, Ilczyszyn said.
A letter of intent regarding the operations of the Boathouse Tiki Bar & Grill, LLC was provided – a concessionaire agreement for 30 years.
Ilczyszyn said the building will be substantially bigger and more valuable. According to the LOI, the concession area for the Boathouse, and retail pavilion will be 12,375 square feet.
“We own the building upon CO (certificate of occupancy),” he said.
The LOI includes the Boathouse paying a minimum guaranteed concession fee of $7,000 per month, which will begin the day the operations are open to the public. The city will contribute a $1,000,000 reimbursement to complete the construction of the new Boathouse restaurant, which will be issued as a credit and applied to the percentage of gross in equal monthly installments for the first 10 years of the agreement.
In addition, the Boathouse will pay a monthly percentage of gross receipts, again from day one of occupancy, at 5% in years one through 10, 6% in years 11 to 20 and 7% in years 21 through 30.
“As far as the final agreement goes, we are working on this to finalize the agreement,” Ilczyszyn said. “We had a meeting Monday with the Kearns Group in order to finalize the final details.”
Zak Kearns, with the Kearns Restaurant Group, said they do not have any disagreements as far as negotiations – it just takes time to go through the 94 pages of the document.
He said they just received the draft concessionaire agreement on Monday.
“We are anticipating by next week we will have a redline version,” Kearns said, adding that they are working at lightning speed.
As far as the demolition of the damaged structure, he said they can accelerate it within a week.
According to the letter of intent, The Boathouse would be responsible for the demolition costs, would be allowed to operate a food/beverage operation while the new restaurant is being built and would share 50/50 the cost of a new fuel system with the Boathouse to pay the city its 50% share in monthly installments.
The Boathouse also would get first refusal for any free-standing restaurant or beachside operations and services as well as five free parking spaces in the to-be-built parking garage at resort-style waterfront “destination” planned by the city.
The final concessionaire and settlement agreement for the Boathouse is anticipated to come before the City Council next month.
City Attorney Aleksandr Boksner said two component resolutions will be brought before City Council – a settlement agreement and a concessionaire agreement. He said although he is optimistic of bringing it back for the July 23 meeting, he is relatively confident the resolutions will be on the Aug. 6 agenda.
“It does require construction of a new facility and does require a bit of access on the beach portion side ability to operate a beach concessionaire area. It’s a comprehensive, holistic approach agreement to give us the most control of what occurs there,” Boksner said.
Mayor John Gunter was concerned that a “brittle structure” — the damaged building — was still partially erected on the property, potentially becoming a liability if a hurricane came through before it was demolished.
“That brittle structure can turn to projectiles,” he said.
There was a fire at the Boathouse on Oct. 17, 2024, resulting in a total loss of the 5819 Driftwood Parkway structure.
Boksner said in the background, staff have been preparing for the issuance of the demolition permit. He said the Kearns Restaurant Group has retained a demolition company and once the approval is made with the concessionaire and structure agreement, the demo can take place in a matter of days.
“I had my staff put together a list of what would be needed for them,” Ilczyszyn said. “We are the owner. We own the building and land. The permit is not going to hold anything up.”
The building has not yet been demolished because an agreement was not made with cancelling the lease for the Boathouse.
Boksner said with the lease in place, the Kearns Restaurant Group took the position of reconstructing what they originally had on the property, which the city declined as there was more than 50% damage from the fire. He said in order to finalize the relationship of the parties, a settlement and concessionaire agreement needs to be in place to allow them to rebuild under the new requirements of the code.
“This is the city’s governmental property, the city’s building once constructed. The way it is structured, the city has the absolute mandatory amount of oversight and what may happen to the restaurant in consideration for the full Yacht Club development.
Gunter said if they do not have an agreement by both parties on Aug. 6, he will make a recommendation to move forward with the demolition to get the structure down.
To reach MEGHAN BRADBURY, please email news@breezenewspapers.com