City, Boathouse agreement approved

A unanimous vote of the Cape Coral City Council made it official Wednesday night: The Boathouse Tiki Bar & Grill, a popular destination at the Yacht Club, will rebuild and reopen.

Council approved both a settlement to close out the existing lease and the new 30-year concessionaire agreement with the Boathouse Tiki Bar & Grill LLC, that will replace it.

City Manager Michael Ilczyszyn said the city is a bigger partner in terms of profit sharing, they removed some exclusions pertaining to fuel, and have a higher minimum return guaranteed.

The approval will allow the community to enjoy this restaurant in a newer and bigger fashion at the Yacht Club, he added.

The path to an agreement has been a bumpy one since the restaurant suffered a fire shortly after re-opening in the wake of Hurricane Ian.

The Boathouse Tiki Bar & Grill, which had entered into its original lease with the city for operation of the waterfront restaurant, marine fuel sales and bait shop on the city-owned park property on Sept. 25, 2013 had wanted to rebuild.

A dispute arose between the city and Boathouse as to the extent of the damage for the purposes of a substantial damage determination under the FEMA 50% rule, and the parties worked toward a new agreement, now formally resolved.

The city said Wednesday, the damaged structure will come down tomorrow. 

The now-approved concessionaire agreement - the exclusive right to construct, manage, and operate food/beverage, fuel, retail and beach operations - is for a 30-year term, which both sides have called win-win in the context of the full agreement,

Mayor John Gunter thanked the Kearns Restaurant Group, as well as its attorneys, and the city's staff and attorneys for their hard work.

"Sometimes you have to take two steps back before you take two steps forward. It took us a little while to get here. I think both sides are happy with the outcome. We can't wait for this particular establishment to open back again so we can all enjoy it and take our visitors there. Zak (Kearns), I wish you well and speedy recovery in getting those doors open," he said.

As far as the construction and improvements - the concessionaire commitment is for the responsibility for all costs for planning, design, construction, and maintenance of all improvements.

There is a minimum guarantee of $7,000 a month paid in 12 equal monthly installments. There is a 5% of gross receipts for years one through 10, 6% for years 11 to 20 and 7% for years 21 to 30. During the interim operations of construction, there is a $3,500 a month base rent and 5% of all gross receipts above rent.

The city contribution is $1 million reimbursement towards restaurant construction, applied as a monthly PG credit for the first 10 years and the city will pay for the installation for the fuel facility cost and the concessionaire reimburses 50% over the agreement term.

As far as insurance, the commercial general liability is not less than $10 million per occurrence, with the city named as the additional insured and the property insurance is all risk insurance for full replacement value.

The operations include food and beverages, including alcohol for the restaurant, and for retail - apparel, art, beach, sundries, bait, tackle and fuel. The beach operations includes equipment rental with a city residential pass at 20% discount.

The hours are from 8 a.m. to 10 p.m. daily for the restaurant and retail, and beach and fuel is from sunrise to sunset.