The Boathouse Restaurant lease with Cape Coral
To the editor:
Why is the city talking changes and options to the lease with the Boathouse at the Yacht Club? Is the city blocking the rebuild of the Boathouse Restaurant?
According to the city manager the fire has caused the building to be “untenantable” to be repaired promptly to the value prior to the fire. The statement by the city manager that the property will need to be replaced per the latest building codes, and it will take three years to design and build makes the current lease problematic. The Boathouse was a complete loss after Hurricane Ian, was the rebuild then brought up to code? Three years from now there will only be six years left on the Boathouse 20-year lease. It would most likely be uneconomical to construct a building to new requirements and recover its costs in the remainder of the lease time frame.
The lease is clear, the best solution is for the Kearns Group (which owns the Boathouse) to cancel the lease and forfeit the insurance money to the city per the lease provisions. The city can use those funds to prepare the site for a new restaurant with desired features and issue an RFP for a new 20-year lease to the restaurant industry. The Yacht Club is a premier site and should attract many parties to bid. The city should expect a 10% return on gross sales ($1 million a year). It currently only receives 5% sales revenue on the lease with the Boathouse.
We can all empathize with the loss of the Boathouse business, but a competition should be held for a new lease that will maximize revenue for the residents and taxpayers. Negotiating a new sole source agreement with the Kearns Group will not result in the best deal for the public. Holding weekly or biweekly meetings with the Kearns Group gives a bad perception that special treatment is being given to them. It is often stated by the council that we need to act within the “4 corners” of the contract. The current lease needs to be cancelled per its provisions and a new one created and competed for the best value to the residents. As long as the Boathouse lease is still active, the Kearns Group should be paying roughly $5,000 in monthly minimum rent regardless of its usability. Are they?
Tom Shadrach
Cape Coral