Palm Coast blasts 'sweetheart deal' lease for Green Lion golf course restaurant; operators say criticism unfair
Palm Coast City Council members tore into an agreement for the Green Lion restaurant at the Palm Harbor Golf Course, calling it a “sweetheart deal” for the restaurant and “shameful” for the city.
But the family that runs the restaurant in a city-owned, double-wide trailer on the municipal golf course said they were the only ones who bid on the job in 2017 and have worked hard to turn it into a successful business; in fact, it ranks number one on Tripadvisor among Palm Coast restaurants.
“I’m just broken-hearted. I really am,” Christopher Marlow, who runs the restaurant, said in an interview. “I'm just absolutely, just so, so sad about it. I just feel like we're being punished for being successful. I think that the city's reputation precedes them. And this is exactly why the city of Palm Coast has a poor reputation regarding business.”
Marlow and his family have run the Golden Lion in Flagler Beach for three decades. He said on Friday that he and many of the restaurant's supporters plan to speak during the public comments portion of Tuesday's City Council meeting.
The issue came up during a Tuesday workshop when city staff updated the council on negotiations for a five-year extension of the lease agreement. The Marlows were unaware it was on the agenda.
'Shame on us' for lease, Palm Coast vice mayor says
Council members were displeased to learn that the current rent is $600 per month while the city also pays for water, sewer, electric and solid waste.
But there is only one meter for electric to the building, which also houses the pro shop and a city office. In the original lease agreement, the city opted not to split the electric meter; the bill ranges from about $1,100 to $1,400 a month for everything.
“Shame on us. This is robbing the people of Palm Coast,” Vice Mayor Eddie Branquinho said. “This is actually a shame.”
City Councilman Ed Danko agreed.
“I don't blame the people that got this lease,” he said. “I mean, 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. But I don't blame them personally, but I just think this is outrageous.”
The council asked city staff on Wednesday to determine the market rental value and then increase the rent. The consensus appeared to be that if the Green Lion did not agree to the higher rent, then the city would put the restaurant operation out for bid.
But in an email on Friday afternoon, City Spokeswoman Brittany Kershaw wrote that the city would prepare a request for proposal. "At the direction of City Council, city staff is working on obtaining quotes for professional services for the appraisal. Staff was instructed to prepare an RFP at which time the Green Lion will be able to submit a proposal if they choose."
Previous coverage: City to take over Palm Harbor Golf Course
More on Palm Harbor: Palm Coast to discuss golf course contract
Marlow said in the phone interview that the city asked him in 2017 to run the restaurant at the Palm Harbor Golf Course. No one else bid on the job. He negotiated the contract with former City Manager Jim Landon.
“We work very hard,” Marlow said. “And we've worked tirelessly to get this business up off the ground. If the City Council wants to put 30 families of Palm Coast out of work, so they can get an extra $1,000 a month in rent — I think that's a disgrace. They talk like they're representing the people. They're not representing the people. They are making an example out of us. They’re punishing us for being successful.”
Marlow said his family invested $100,000 to open the eatery.
He said that when the city reviews rents, it should make a similar comparison since the Green Lion is located inside a trailer.
Marlow's mother, Carolyn Marlow, said in a phone interview that the family agreed in 2017 to try to improve the restaurant and they succeeded, despite two hurricanes, Matthew and Irma, and then the coronavirus. She said her family took all the risks and put their money into the restaurant and now the city wants to take it away.
"I watched that video I felt like someone had punched me in the stomach. I've never seen anything like this," she said.
She also said they agreed to pay a higher rent.
"My son busted his ass for that restaurant and now they are taking it away?" she said.
The only bidder
Kemper Sports had previously managed the restaurant and golf course, but the operation lost money every year. So the city took over in 2017.
The city then issued a request for proposals for anyone interested in running the restaurant. The Green Lion was the only bidder, Palm Coast Chief Development Officer Jason DeLorenzo told the council on Tuesday.
The Marlows told the city in April that they wished to extend the lease another five years. DeLorenzo told the council on Tuesday that city staff began working on the lease, including increasing the rent.
When DeLorenzo said the Green Lion has been paying $600 a month in rent and the city paid utilities, Danko interjected.
“Six-hundred? Well, I’ll give you seven or eight. I mean that’s pretty low,” Danko said.
DeLorenzo said city staff had worked out a gradual rent increase in the lease extension. The rent would increase to $1,207.13 on Sept. 1, he said. The rent would then increase by 20% each year to $1,448.55 in 2023; $1,738.26 in 2024; $2,085.91 in 2025; and $2,503.09 in 2026, DeLorenzo said.
“We needed to find a fair path to accelerate the lease to a market rate because there’s a big difference between $600 and what the current market rate is,” DeLorenzo said.
He said the new lease would also set clear expectations for both sides because of some communication breakdowns between the city and the Green Lion, DeLorenzo said.
Since there is only one meter for the building, it makes sense for the city to continue to pay for water, electric and solid waste, DeLorenzo said. But the Green Lion will start paying for propane and internet service, he said. He said the restaurant had been using the city’s internet.
The lease is currently for 2,651 square feet, but that would be reduced to 1,998 square feet to provide more room on the patio for golf operations, according to the city.
The lease has two five-year extensions, but under the current terms the city can terminate it for any reason by giving six months notice, DeLorenzo said. The Green Lion would not have to pay rent during those six months under the terms of the lease, DeLorenzo said.
Council member Nick Klufas said the restaurant has improved since 2017.
“It wasn’t as pristine and awesome as it is today,” Klufas said.
DeLorenzo said the Green Lion did invest some money in the facility.
Vice Mayor Ed Branquinho said he had nothing against the family running the restaurant and they had always treated him well when he was there. But he said the city had spent more money on it than they had. He also brought up an issue with an ice machine.
“They made us take one ice machine that cost us $20,000 because (it was) obstructing one table,” Branquinho said.
Marlow said that Branquinho was referring to a wall that the city built which blocked the view of the golf course. He said he never approved putting the wall in such a terrible spot.
Branquinho also objected to the five-year gradual increase to market rate.
“It will take five years to come to fair market. At that time it’s not going to be fair anymore,” Branquinho said.
Council member Victor Barbosa also criticized the arrangement.
“I’ve run multiple restaurants and owned multiple restaurants. It cost a lot more than $600 to run a restaurant and utilities,” Barbosa said.
“I hope we are not justifying something over here, because this is unjustifiable,” Branquinho said.
Danko asked DeLorenzo to find out how much profit the restaurant made in a year, which the city can request according to the lease.
Danko said the city should immediately increase the rent to fair market or see who else would be interested in running the restaurant.
“Otherwise, I think we need to put this out to bid. We need to see who else comes forward. Let's have a good old-fashioned bidding war," Danko said. "And let's get the most bang for our buck out of this because this is too much of a sweetheart deal. And I'm totally opposed to this the way it sits right now.”
Klufas said the golf course restaurant today was “top tier.”
“I think its time that we take advantage of the ecosystem and the environment that we built and now we kind of extract out the value,” Klufas said.
This article originally appeared on The Daytona Beach News-Journal: Palm Coast council: Green Lion restaurant's lease a 'sweetheart deal'
