- April 18, 2024
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Palm Coast will work with the management of the Green Lion Cafe — the restaurant that leases a city government-owned building at the Palm Harbor Golf Course — to develop a new lease that would have the restaurant covering the cost of its own expenses within 24 months, the City Council decided at a May 3 council meeting.
The restaurant's lease is currently $600 per month, and the city pays for the restaurant's water, electrical use and propane. Together, those exceed the restaurant's rent payments.
The restaurant is managed by the Marlow family of Flagler Beach, who also own the Golden Lion Cafe on State Road A1A and indicated at the meeting that they were amenable to the City Council's decision.
"I don't see where we're that far apart," City Councilman John Fanelli said. "I think it just has to be mutually beneficial to both sides, and I think it does have to be at least at a neutral cost to the city. We can't run it at a deficit; that is not fair to the taxpayers."
The council vote was 4-1, with Councilman Eddie Branquinho dissenting, to direct city staff to negotiate a lease that would have the city break even on the restaurant facility within 24 months. The agreement will come back to the council for final approval.
Branquinho has opposed the spending of city money on the restaurant.
"I don’t think we should lose money for the next two years," he said. "For the life of me, I don’t understand how we are doing this to the city of Palm Coast."
"I think we would begin losing money if we didn’t have a restaurant there," Councilman Ed Danko countered. "There are folks that play golf that eat there. It’s the package that does attract some of that business."
In February, City Council members had directed city staff to terminate the city's lease with the restaurant and solicit proposals for a new one, saying the current lease was "robbing" taxpayers. The council did so even though the Marlows had already told city staff that the restaurant was willing to accept a staff-proposed lease that would have doubled the restaurant's rent this year, with stepped increases following until the rent reaches $2,503 in 2026.
But the council quickly reversed its decision after dozens of locals turned out to the following week's City Council meeting to demand that the council reconsider.
When it did so, the council didn't simply accept the lease amendment that city staff and the restaurant had already been working on.
Instead, the council directed city staff to solicit a commercial real estate professional to conduct a fair market value analysis on the property.
Cornelia Downing Manfre, of Sotheby’s International, performed that analysis, comparing the Green Lion's lease to that of three restaurants — Hi-Jackers, Captain's BBQ, and the restaurant at the Bull Creek campground — that lease property owned by the county government.
City staff brought the council a new lease agreement for consideration at the May 3 meeting, incorporating Manfre's recommendations.
The staff proposal would begin with a lease rate of $10 per square foot, which comes to $1,665 per month, with annual increases of 3%. Electricity at the property, under the staff proposal, would be metered, with the restaurant paying its own share and taking over propane costs.
The Green Lion's representatives appeared at the meeting with an offer to pay $9 per square foot, or $1,498.50, per month, and suggested 0%-to-3% annual increases based on the Consumer Price Index.
Water use became a point of contention at the meeting, because the cost attributable to the restaurant can't easily be calculated: The restaurant's water isn't metered separately from other uses at the clubhouse property, and setting up separate metering would involve costly plumbing renovations. The overall monthly bill has been about $2,000. The shared electricity bill has been about $1,500 per month.
Green Lion Cafe co-owner Christopher Marlow told the council that if the overall water and electrical bills combine to about $3,500, and the city government and the restaurant are each responsible for about half of that total, that comes to about $1,750 for each party. With the proposed 3% annual increases in the city-staff-proposed lease, Marlow said, the restaurant would soon be covering that amount.
Mayor David Alfin proposed having city staff structure the lease so that, within 24 months, the restaurant's operating expenses would no longer be covered by the city government. With the exception of Branquinho, other council members supported his proposal.
City staff will continue working with the Marlows on a new lease agreement, then bring it back to the City Council for final approval.
