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Palm Coast Turns Nasty Against Green Lion Café Lease After 5 Successful Years and Turnaround at Palm Harbor Golf

Palm Coast Turns Nasty Against Green Lion Café Lease After 5 Successful Years and Turnaround at Palm Harbor Golf

The gambit worked. Restaurant and golf course are now humming. Trip Advisor rates Green Lion the Number 1 restaurant in Palm Coast, with 182 reviews netting it a five-star rating.

On Tuesday, three Palm Coast City Council members turned on the Green Lion lease angrily, at times viciously, calling the lease “shameful,” “outrageous,” a “sweetheart deal” that was “robbing the people.” They had derisive words for the city administration, too, and not just the one that negotiated the deal five years ago. Yet the matter was in discussion Tuesday precisely because the current administration had renegotiated new rates that would increase Green Lion’s rent 317 percent over the next five years, bringing the rent somewhat in line with market rates. The work of months of negotiations between the city and Green Lion crumbled before the council’s assault.

“I want to use the word shame. Because I could use different words, but the word shame, that’s what we should be using over here for the people that actually did this lease five years ago,” Council member Eddie Branquinho said, not naming Jim Landon, the city manager who negotiated the lease. “And shame on us if we agreed to this. Shame on us. This is actually–let me use the bad word, this is robbing the people of Palm Coast. This is actually a shame.” He was equally critical of the city staff, which he said should not have submitted the lease proposal in its present form. “This is bad,” he said. “This is shameful. Shameful.” He tried to walk back the personal attack later, by saying he was not intending to be personal.Only one council member, Nick Klufas, remains on the council from the time when the lease was approved. He provided a defense of the lease and sought to paint a picture of what the restaurant and the golf course looked like five years ago, “when it was a literal, like, hole in the wall,” he said. But as discussion unfolded Tuesday he saw the writing on the wall and even he soured on the lease he’d approved five years ago, joining his colleagues and calling for a change.

Council members had different alternatives: putting the restaurant back out to bid, getting verified current market rates for restaurants, directly imposing a much steeper rent on Green Lion, rather than gradually, and issuing a “termination for convenience” notice to Green Lion–essentially, firing the company–in six months.

In the end, they converged on determining fair market value, then putting the facility out to bid. Theoretically, Green Lion could bid to save its own operation. But by then, it would do so as a company the city will have shown the door.

Green Lion’s operators were not there to defend themselves.

Christopher Marlow, one of the management company’s owners and the operator of the Green Lion, was in disbelief today. He recalled the days–the years–when Palm Harbor was in the red on average $212,000 a year, year after year from its inception in 2008, not counting depreciation and city investments, which bring the total loss to $9 million until 2016. The reason Green Lion got the lease in 2017, he said, “is because even the city didn’t think we were going to make it.” The golf course’s future was in question. “And now they’re talking about kicking us ut and putting 30 families out of work so the city can make $1,000 a month more? Are you kidding me?” Marlowe said. Since taking over the restaurant had weathered numerous closures because of hurricanes and tropical storms, the kitchen floor had caved in, the dining room had flooded. The restaurant repaired and moved on. “We want to continue our lease. The City of Palm Coast is making it very difficult, and quite honestly making it almost impossible.” He added: “We have agreed to everything that they’ve asked for and it’s still not enough for these councilmen. I don’t know what to do with these people. It was just like a feeding frenzy yesterday.”

It was not an exaggeration. And it raised questions about the sort of shrill, anti-business demeanor the council was presenting to potential bidders, if and when they materialize.

Palm Coast in 2017 ended its habit of contracting with a management company to run the golf course (and the city’s tennis center). The course has been more successful since the city took over management, with the café playing a key role in that success. The city negotiated a five-year lease with Green Lion at the time, with an option to renew for five years. (See the contract here.)

Green Lion and Bonner Mobile Bar Service of Tampa bid in 2017, the latter an ice cream company whose bid wasn’t considered feasible. The previous restaurant at the property had been successful, but only as long as it was run by Karen Barchowski, a chef and the owner of Sally’s Ice Cream in Flagler Beach. But she’d left by then, and the restaurant suffered, becoming more of a concession stand and a “hole in the wall,” in Council member Nick Klufas’s words. Its physical condition also deteriorated significantly.

Green Lion was tasked with restoring the restaurant’s lustre and invest in improvements, at its expense. Marlow said it invested $100,000. Its original lease called for the city to pay all utilities and a low rent was set at $500 the first year, rising to $600 a month, when the entire golf course operation was struggling. (Specifically: the first six months were rent-free, then $500 a month, and beginning with year two, $25-a-month increases each new year.) The terms were similar to those Captain’s BBQ negotiated with Flagler County government for its restaurant at Bings Landing, the county park, in 2011, with increases of $30 a month each year after that, now through 2026.

The golf operation is no longer struggling. The intangible role the restaurant played in that turnaround, to the benefit of the city, is likely incalculable. Green Lion in April requested a lease extension, as allowed by contract.That’s the option that Palm Coast Development Director Jason DeLorenzo presented to the Palm Coast City Council on Tuesday, with acaveat. “We still have work to do on this but we want to at least get it in front of you and get some feedback from you,” he told council members. It was a work in progress, with significant changes to the original lease, but nevertheless it was expected to be a routine matter. That’s why Marlowe didn’t think it necessary to be at the workshop at that point.

But this is the Palm Coast City Council, where grandstanding, tempers, knee-jerks have for the past couple of years tended to frame discussions and decisions at least as much as reason, if not more. DeLorenzo was minutes into his presentation when the “feeding frenzy” began.

Council member Ed Danko, who had clearly not read the preparatory materials in his meeting packet, was incensed that Green Lion was paying just $600 a month. “I’ll give you seven, or eight,” he said derisively, meaning $700 or $800. Had he read the packet, he’d have seen the new schedule: $1,200 starting in September, and rising by several hundred dollars a year, gradually, to $2,500 by the fifth year of the renewed lease. Mayor David Alfin had to intervene to allow DeLorenzo to continue–more than once, as other council members also interrupted, albeit less scornfully.

The higher, “market-rate lease” was drawn up in response to wishes previously by council members to raise the rates, DeLorenzo said, and Green Lion would now be required to pay for natural gas and internet service, as it had not previously. The leasable space would be reduced from 2,650 square feet to just under 2,000 square feet, with changes affecting the patio: four days of the week, the city’s own operations impact that patio for leagues, tournaments, outings, scoring and the like.

Palm Coast Turns Nasty Against Green Lion Café Lease After 5 Successful Years and Turnaround at Palm Harbor Golf

“How much is the city paying on the utilities all these years?” Council member Victor Barbosa asked. One month’s worth ranges between $1,100 to $1,400 for electricity, Mitch Lehman, the golf supervisor at the course, began to say, and was about to cite the water and sewer cost but didn’t get to.

“And the city is paying for this?” Barbosa said. “So we’re losing money every month. The residents are paying for this restaurant to be there. Who made this deal? This is outrageous.” (There is one meter at the golf course for all operations there.) Branquinho joined the criticism, calling the city’s share “unjustifiable” and again prompting Alfin to intervene. “Let’s let staff get to their recommendation,” the mayor said.

Danko ignored him. “How much profit a year does this restaurant make for itself?” he asked. The figure was not readily available, but could be provided, DeLorenzo said. Danko wanted to set the lease rate based on that: “We perhaps could maybe well make that work if we got a percentage of that profit kickback to the city.”

Alfin, who spoke like someone who had read the packet, tried again: “I’m not sure staff has given us the rate that they intend to increase it to yet,” he said.“I went through the packet the other day,” Danko said.

Alfin quizzed him, knowing that Danko wouldn’t know: “And what was the final rate?” the mayor asked him. “What’s the final rate three years from now?”

“$1,200 bucks or something,” Danko said, off by $1,300. Still, he persisted with the derision: “I’ll give you 13, Jason” (now lowballing the administration’s own terms by by $1,200).

DeLorenzo said the administration’s intention was to gradually work the rental payments to market rate, at $15 a square foot, which would be achieved in year five of the renewal. He then laid out the annual rates over the next five years, which project a 20 percent rate increase each year.

“It’ll take five years to come to fair market,” Branquinho said. “By that time it’s not going to be fair anymore.”

Annual cost of living increases would kick in after that. Barbosa and Danko talked about rates, again Alfin asked to let the presentation continue, and Danko Tautologized: “I’ll wait until the end but I’m boiling.” (“Good for the restaurant,” Alfin quipped.)

Now Klufas started with questions about the equitability of market rates. And when the presentation was over, Danko reiterated his opposition to the proposal. He proposed going immediately to the $2,500-a-month rent or putting it out for bid. He was echoed by Branquinho. That idea would soon be set aside in favor of bidding out based on verified market values.

“I don’t blame the people that got this lease. I mean, it’s a sweetheart deal,” Danko said. “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. We don’t want to find ourselves in a Bings Landing situation that the county found themselves in. And that’s what this reeks up to me.” (Danko was not referring to the breach-of-contract lawsuit Captain’s BBQ filed against the county, which has been costly and dragged for nearly three years, wiping out any monetary gains the county might have realized with a higher rent, but to the rent Captain’s paid.) He later again referred to the perception–absent bidding out the process–to “some backdoor, under the table sweetheart deal,” which of course threw out his claim that he was not attacking the Green Lion’s operators personally.

By contract, the city can terminate the lease, but it would have to give the restaurant six months’ notice–and cease collecting rent for those six months. That now appears to be the approach the council is willing to take.“We don’t deserve this, we are being extorted and punished unfairly by the local government,” Marlow said. “The local government should be helping small business, the local government should be helping the community. Instead they are destroying us, so they can make an extra thousand a month? I can’t believe it.”

In today’s interview, Marlow was asked directly whether he would be willing to accept the immediate increase to $2,500 a month. We don’t want to leave, we have been there for a long time and we did not make any money for the first three years, we put $100,000 to get that place up and running,” Marlow said. “Of course we don’t want to walk away. We want to find a way to make things work, but we don’t want to sit here and stand for what happened yesterday, this is not how you do business.”

Between Golden Lion and Green Lion, the Marlows have been in business some 30 years, their businesses drawing on a broad-based popularity they buttress with community involvements and contributions to food banks and other organizations for the neediest. (“Our family is absolutely gutted by the City [Council members],” Carolyn Marlow said in a text today. “We are not political and work our butts off 7 days a week. This is not our world, but obviously, we are now caught up in this circus.”) The Green Lion cheers for and hires numerous local musicians. The restaurant’s clientele is diverse: the club’s golfers of course (each member gets a free bottle of wine with dinner), tourists, city employees, who get 30 percent off, and residents. It all adds up to a constituency the council may be underestimating.

Palm Coast Government’s Proposed Lease Renewal with Green Lion Cafe (2022):

Click to access green-lion-lease-palm-coast.pdf