Greasy Spoon No More? Flagler Beach Ready to Negotiate New Lease for Pier Restaurant

The Pier Restaurant’s greasy-spoon days in Flagler Beach may be numbered. The Flagler Beach City Commission is holding a special public meeting at 1:30 p.m. on Wednesday at City Hall to review an 11-year lease that would turn over the property from long-time restaurant owner Kaitlin Meyer to Raymond Barshay, who runs River Grille on the Tomoka, an Ormond Beach restaurant. The 48-year-old pier property is owned by the city, which must approve any lease transfer or change.

Nothing is a given. The commission has known for almost five years that Katalin Meyer, who’s held the lease to the property since 1988, has been trying—fitfully—to sell. Her lease doesn’t run out until 2012. She considered selling in 2006. Commissioners were about to discuss a sale to St. Augustine-based entrepreneur Don Becker in May that year, only to see Meyer retreat at the last minute. Meyer began negotiating on her own with Barshay late last year, and even worked out an “ironclad” deal with him. They couldn’t execute it because the commission must approve it first.

To the frustration of Barshay and other local restaurant owners, who wanted their own chance at taking over the lease (the Flagler Fish Company especially), commissioners’ moves at every turn over the last 12 months have been inconclusive or contradictory. They asked their staff to prepare a “white paper” about the restaurant that they then used as a basis to solicit interest—not bids—from potential restaurant owners in spring. Even that tactic lacked clarity. Commissioners refused to advertise the solicitations in more than three newspapers in the state (Orlando, Tampa and Jacksonville) and acted coy over what, precisely, they were seeking. It wasn’t a serious effort, and a few nibbles aside, no one responded seriously.

Meanwhile, the Pier Restaurant has turned from an iconic city trademark into something of an eyesore, and a blot on the city’s reputation. To many visitors, a stop there sets the tone for the city as a whole. What they find inside is dilapidation: the structure echoes the quality of the food and the atmosphere, according to testimonies collected by a consultant the city hired in fall to provide an objective perspective on the restaurant and how to approach a new lease. The report, produced in October, was damning. “This icon location today does not promote the city the way she deserves,” the report stated. “This is the flagship and identity of Flagler Beach.” Instead, the report concluded, the property was dragging down the city’s reputation.

That was enough for the commissioners to take a more convincing approach to transferring the lease and working out a new, long-term one with Barshay. They assigned their attorney to write a new lease. That’s the document they’ll be discussing Wednesday.

The lease is not significantly different from what Barshay was proposing: $36,000 a year in rent for each of the first and second year. The 11-year lease would then have rent increase in the third year and every year after that by 3 percent. The lease includes a provision that would raise the base rent every year in accordance with the federal consumer price index (the rate of inflation). It’s not clear whether the CPI would be in addition to the 3 percent increases. Barshay would have the option to renew the lease in five-year increments for 20 years, resulting in a total lease term of 31 years.

The city would also stand to make extra profits: Barshay would have to provide monthly gross sales reports to the city. Based on those figures, the city would take in 2 percent of all sales over $1 million over the year.

Barshay would operate the restaurant much as he does the River Grille—as American fare. He’s proposing to invest up to $500,000 in the run-down property. But the city, as the landlord, would build a 20 by 80 foot deck for outdoor dining.

Barshay would maintain the restaurant in excellent shape throughout the life of the lease. (The same strictures were part of the Meyer lease.) The restaurant is to be open seven days a week, offering breakfast, lunch and dinner.

One significant difference: the consultant’s report had recommended that the new lease holder spend between 2 and 5 percent of gross sales on marketing and advertising. That requirement is nowhere in the lease.

Note: the article has been corrected from an earlier version to reflect that the city, not Barshay, would be responsible for building the deck.