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Obstacles Cleared: Flagler Beach’s Iconic Pier Restaurant Will Have a New Owner

| March 3, 2011

This way to a new lease on life for Flagler Beach's iconic restaurant. Restaurateur Raymond Barshay is set to take over. (FlaglerLive)

This way to a new lease on life for Flagler Beach's iconic restaurant. Restaurateur Raymond Barshay is set to take over. (FlaglerLive)

It looks like the Pier Restaurant will have a new owner. It looks like that new owner will be Raymond Barshay. And it looks like neither he nor the Flagler Beach City Commission, which owns the restaurant property, the pier and the bait and tackle shop there, walked away with a clear victory. But numerous obstacles that often looked like deal-breakers fell away in a final round of negotiations Thursday evening as Barshay and the commission agreed, in principle, on a potential 25-year deal.

Barshay, an Ormond Beach restaurant owner,  has been as patient as he’s been elusive through months of tense, tortuous, at times short-tempered negotiations in open court. He faced five members of the commission, at least two different attorneys and three people who’ve sat in the city manager’s chair, most recently—and for the bulk of the negotiations—Bruce Campbell, the latest acting manager and clearly the most involved not only in negotiating, but also advising commissioners.

The management of the bait and tackle shop, the bathroom-cleaning and the toll-takers on the pier were the ultimate deal-breaker. The shop has stood empty, hurting business on the pier and damaging the venue’s image. The city has been assuming the cost of the toll-takers and bathroom cleanings for about $60,000 a year (the pier generates from $150,000 to $165,000 a year). The lease called for the new owner of the pier to take the whole package over.

Barshay didn’t want to. He proposed looking into what he might do with the bait shop, but he wanted to ride out his first year without any costs to his bottom line. His proposal to the city: keep paying that $60,000 the first year while he figures out how to turn the shop into a money-maker.

How, he was asked. “Whatever I can do,” Barshay said.

“I really don’t know what that means,” Campbell said. Barshay did what he’s done throughout the negotiations: he eluded, allowing only that he’d work with Campbell and the city’s recreation director to come up with ideas on how to make the bait shop successful. Barshay said after the first year he would then assume 50 percent of the cost the second year, assuming the place was generating some revenue. It’s not clear how much he’d assume after the second year, but he wanted a door left open to renegotiate the bait and tackle shop issue should he not be making money with it at some point.

Alternately, Campbell has been receiving calls from people interested in taking over the bait shop—six entities, but only one of them willing to take on the entire package—the shop, the toll-takers, the security, the bathroom-cleaning. The downside: whoever took over could also fail, or quit.

Commissioners were divided on the Barshay bait shop deal. Jane Mealy and Joy McGrew were willing to go with Barshay’s proposal. Ron Vath and Steve Settle were not.

It came down to John Feind, the commission chairman. “Unfortunately I don’t see either one of these as a clear winner,” he said, referring to the outsiders’ possibilities as opposed to Barshay’s. “Both of them have a deal of uncertainty in them. My whole idea behind the original thing was have one person involved in this thing. I’m going to vote yes to accept your proposal and work toward getting this thing on a profitable business.”

That was it. The final, major hurdle was cleared. It was just after 8 p.m., into the third hour of Thursday’s negotiating session. And it had been a slog to get there. Not just Thursday.

“I don’t believe that we’re totally done with this but I believe we made some progress tonight,” Feind said, characteristically understated.

No love lost between them: Commissioner Ron Vath was particularly short-fused with Ray Barshay, at one point calling him 'shady.' Barshay did not appreciate the remark.

“It looks like it kind of crested,” Barshay said, clearly relieved. He thanked his son, Alex, for driving in from Jacksonville to attend this evening’s negotiating session. He was one of eight people left in the audience by then, two of them reporters, three of them candidates for next week’s Flagler Beach election to replace Vath and McGrew.

Just last week it looked like Barshay was ready to walk away. He had objected to the city reversing its decision on a lifeguard tower and building it on the pier after all. Barshay had said the tower would block restaurant patrons’ southern view. Thursday evening, he relented. He just wanted assurances that the city would not build anything else that could block views. He did not get those certainties. Just a loose suggestion from commissioners that more construction seems unlikely.

Barshay had objected to the base rent of $3,000. He never specified what kind of rent he was willing to pay. That would have been irrelevant anyway. The city was sticking with $3,000. Barshay relented and accepted the $3,000 a month.

There was confusion on who would build an outdoor deck. In that case, the city gave in and agreed to put up $50,000 for the deck, without seemingly getting much in return. The city had looked for some additional revenue from the extra tables that would generate dollars on the deck.  It’s not clear when the deck would be built, but the city pledged not to drag its feet.

Barshay also opposed the 3 percent in revenue the city was demanding on all sales above $1 million, beginning in the third year of the business’ operation. (Both sides agree to exempt the first two years of any revenue sharing.) Barshay agreed to 2 percent for five years then kick in the 3 percent in what, by then, would be the eighth year of operation. The difference is not at all staggering: I comes out to a few thousand dollars.

“We just capitulated on a $50,000 deck. I ain’t nickel and diming this,” Vath said, opposing any change in the percentage. He wanted the city to stick with 3 percent. Vath and Barshay butted head the most in the last rounds. Vath looked out of patience several times Thursday evening. “If that’s a game-breaker let’s forget about the rest of the negotiations,” Vath said.

“It was a simple request,” Barshay said. But he relented on that, too, accepting the 3 percent beginning in the third year.

None of the negotiations have been smooth. Thursday was no exception. The two sides got hung up over a question that hadn’t come up previously. Barshay has said he would invest some $350,000 in the restaurant as part of the deal. The large sum, proof of coming interior and exterior renovations to the building, is one of the main reasons the city is interested in the deal. Commissioner Ron Vath wanted assurances that Barshay would, in fact, spend that much money. If Barshay doesn’t, Vath wanted wording added to the agreement that would ensure that the city would get the difference. The two sides then couldn’t agree on the specifics.

It took over an hour. In the end, they agreed that Barshay would invest that amount of money on exterior and interior renovations, new signage, equipment and furniture, leaving it to their lawyers to craft the particular language of that portion of the lease. It was left unclear how Barshay would pay the city should he fall short of the commitment to invest $350,000, but he repeatedly said that he’d probably spend more. “I already know those numbers are off. They’re too low.”

All of that took place in a workshop, when commissioners could not make formal decisions. That was done just after 8:30 p.m. The commissioners reconvened in a special meeting, and in a minute, had their vote to formalize what they’d just done, with Mealy making the motion and McGrew, in what was to be her very last act in a formal meeting, seconding. The decision was unanimous. McGrew reflected the small congregants’ exact sentiment when she heartily applauded.

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7 Responses for “Obstacles Cleared: Flagler Beach’s Iconic Pier Restaurant Will Have a New Owner”

  1. Bill Hazz says:

    My, my, my . . . perhaps things are finally looking up in Flagler Beach? Now, when will this happen?

    Renovations take forever around here. Has he been “fast-tracked” by the city commission?

    Good luck, Ron. Good luck, outgoing commissioners (seems like you will need it) and good luck to our new commissioners . . . remember to VOTE March 8.

  2. Jeff Dukehart says:

    It’s about time! I cannot for the life of me understand why this process was so grueling. This reminds me of the C.A.V.E. people days; Commissioners Against Virtually Everything. Why not use the baitshop space for the lifeguards? Why not use the money from pier access to support the lifeguards? Also ,I can’t wait to see the lifeguard tower, sorry I forgot, I won’t because it’s too far from my house, hope they have good binoculars.

  3. palmcoaster says:

    Only $3,000/month rent? In Palm Coast, and I said it before, a smaller restaurant than the Pier one and “not located ocean front” just in a strip mall in the middle of the City, pays $7,000/month plus. And on top of it the commissioners offered Mr. Barshay $50,000 tax payers funds, towards building a deck?
    One didn’t this lease for the only other public ocean front restaurant in Flagler County was not put up for bids and invite more restaurant businesses to bid? This is the second give away when it comes to this restaurant. Does anyone in the Flagler Beach commission realize the value of the ocean front location? Maybe not, as is owned by the tax payers aka city of Flagler Beach. The first lease give away for many years was given to the past renters. What a way to waste our hard earned taxes and why?

    And as I read here they also give away the bait shop and the “whole package” …hopefully for more rent! Where are all the invitations to bids for this business lease? See? after all Barshay accepted the life guard tower…as pressure mounted from us. Why is that our elected ones put always the wagon (business developers/prospective’s) before the horse(tax payers interest). What an ocean front lease giveaway! Even any restaurateur located in Palm Coast would have gone for it, if allowed to bid, for no less than 7,000 plus a month lease just for the location. Was this lease deal, a back room one?

  4. palmcoaster says:

    Who is Mr. Barshay and which restaurants he owns, as experience is required. Also and maybe who is he connected in Flagler Beach or this county to get such a “sweet deal”? We are talking ocean front lease here.
    Sorry my typo above I meant “Why not One” but my mind clouds with disbelief regarding this deal.

  5. Prescient33 says:

    Mr. Barshay runs the River Grille in Ormond Beach, which, while not 5 star cuisine, serves decent, affordable meals quite efficiently, and it appears to be a well run restaurant employing satisfied local help. Last I looked, it was in Volusia County.
    Anyone opening a restaurant in today’s economy with an anti-small business regime in DC is a brave soul indeed, and should look for any edge he can get in the underlying numbers. Or would you rather the site remain fallow? Worse yet, would you want a noise making “club” to add to Flagler Beach’s image?

  6. SAW says:

    Mr.Barshay and his investors must be laughing all the way to the bank.
    Only a meager three grand a month in rent for the premier location in town, an amount which he surely knows he can clear from his bar trade alone on any single weekend.
    To add insult to injury, the anxious commission also promised to give him a fifty thousand dollar deck. Congratulations Mr.Barshay, you beat them like a drum.

  7. curious says:

    Congratulations to the Commission and Mr. Barshay!!!! It took long to get there, but finally we will have a wonderful restaurant there and something to be proud of.

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