- May 1, 2024
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The Green Lion Cafe at the Palm Harbor Golf Course leases the restaurant building from the city government for $600 per month. The city pays the utilities, including electric bills that range from about $1,200 to $1,500, according to city staff.
"I’m sure there are a lot of restaurants out there that would like a slice of this pie."
— ED DANKO, city councilman
"So, we’re losing money every month," City Councilman Victor Barbosa said during a city staff member's presentation on the current deal, and options for changes, at a Feb. 8 council meeting. "The residents are paying for this restaurant to be there. Who made this deal? This is outrageous!"
Other council members were also not pleased, and ultimately agreed to have staff solicit proposals to determine what fair market value for the property would be.
"I’m sure there are a lot of restaurants out there that would like a slice of this pie," Councilman Ed Danko said.
As city Chief Development Officer Jason DeLorenzo worked through a slide presentation with options to gradually increase the rent, council members interrupted with comments and incredulous questions. Mayor David Alfin repeatedly asked them to wait until the presentation was over.
"I'll wait, but I'm boiling," Councilman Eddie Branquinho said.
"OK — good for the restaurant," Alfin quipped.
DeLorenzo presented the history of concessions at the golf course.
The course used to be under the management of a contractor, Kemper Sports, that handled food and beverages. The city took over the course in 2017 and put the small restaurant building out to bid.
Only one company — the Green Lion, a sister company to the family-owned Golden Lion in Flagler Beach — submitted a bid, agreeing to make substantial renovations to the restaurant building at its own expense.
The Green Lion is on a five-year, three-term lease. The first five-year term ends this August. The Green Lion has an option to renew for a second term at its sole discretion, and has notified the city that it would like to do so.
"Of course they want to continue. Why wouldn’t they?" Danko said.
But the city can exit the lease at six months' notice at any time for any cause, with the condition that the restaurant would not have to pay rent for those six months.
DeLorenzo and other staff members had prepared a proposal that would bring the Green Lion up to market rent by 2026, increasing it first to $1,207 this September, then by a few hundred dollars each year until it reaches $2,503 on Sept. 1, 2026.
"It was our intention to work our way to a market rate lease, just to be fair," DeLorenzo said.
The proposed lease revision would have also required both parties' agreement, not just the restaurant's, for five-year renewals, and would have set the lease increases based on the CPI, with a floor of 0% and a maximum of 3%.
Danko suggested increasing it straight to $2,503 or just putting it out to bid.
"Let's have a good old fashioned bidding war, and let's get the most bang for our buck out of this," Danko said. "Because this is too much of a sweetheart deal, and I'm totally opposed to this the way it sits right now."
Branquinho agreed, calling the agreement "shameful."
"This is robbing the people of Palm Coast," he said.
"Who writes these leases?" Barbosa said.
Councilmen said their frustration wasn't directed at the family that owns the restaurant.
"I don't blame the people that got this lease," Danko said. "It's a sweetheart deal; I would take it in a second. They’re smart to take it, if we’re dumb enough to give it to them."
Councilman Nick Klufas noted that when Green Lion had taken over the restaurant facility, no other companies had expressed interest. The Green Lion, he added, had also made major improvements to the building, and the restaurant is popular.
"If you go to the golf course, this place is packed wall to wall," Klufas said. "I don't think the council recalls ... when it was a literal hole in the wall."
Still, he said, be believed it was time to increase the rent or put it out to bid.
Council members directed staff to issue a request for proposals, or RFP, for the golf course restaurant.
