Today, Robert Waples, President of ROLOH, wrote to the City Commission about various issues. This is an excerpt of that e-mail regarding the Casino leases. I will follow with other opinions from him on the John Pickett resignation from the Finance Advisory Board and the Sunset parcel in his neighborhood.
"Casino:
Can we please all just agree on what the rate is. If its going to be $30 per square foot then so be it and those who are interested will come. I personally love the idea of Mulligans and hope that becomes the decision on the first floor and look very forward to being a Patron.
I was some what disturbed by this quote from Ms. Margolis "We now have restaurant tenants who are interested in the separate north anchor first floor and second floor spaces. The first floor tenant wants the entire north space and is offering $30 sf. Fox is now only taking one bay, #5, at 667sf for $25sf for the same permitted use as his earlier lease. We have a Women’s Fashion Store that is offering $30sf for either Unit 5, 6 or 7 (which is not available if the restaurant takes the whole north space). "
I was some what disturbed by this quote from Ms. Margolis "We now have restaurant tenants who are interested in the separate north anchor first floor and second floor spaces. The first floor tenant wants the entire north space and is offering $30 sf. Fox is now only taking one bay, #5, at 667sf for $25sf for the same permitted use as his earlier lease. We have a Women’s Fashion Store that is offering $30sf for either Unit 5, 6 or 7 (which is not available if the restaurant takes the whole north space). "
This is indicating that there are various rent negotiations. We should just set the rate and approve appropriate business to this City Jewel in a family friendly beach front that will be second to none. This is simply not that hard of a decision and going back and forth on leases is very discouraging to the businesses that want to be there.
Just like the City of Lake Worth is a mutli-million dollar business, the casino should not be or continue to be caught up in politics. But as a board of directors (you the commission), with interest of the share holders (we the taxpayers), need to move this forward quickly and smoothly to not only get the financials for the Casino solved, but get it self sustaining and in place so when it opens we hit the ground running with a bright and shining jewel for Lake Worth and a positive and clear example of 'Yes, Lake Worth is Business Friendly and can conduct business professionally'.
I'm not saying that is not what we are trying to accomplish but the public perception will become the business perception if we are not careful."
Just like the City of Lake Worth is a mutli-million dollar business, the casino should not be or continue to be caught up in politics. But as a board of directors (you the commission), with interest of the share holders (we the taxpayers), need to move this forward quickly and smoothly to not only get the financials for the Casino solved, but get it self sustaining and in place so when it opens we hit the ground running with a bright and shining jewel for Lake Worth and a positive and clear example of 'Yes, Lake Worth is Business Friendly and can conduct business professionally'.
I'm not saying that is not what we are trying to accomplish but the public perception will become the business perception if we are not careful."
Can I get an amen!! This process is done everyday with many new projects. The difference is the details are finalized before one marketing brochure goes out...Oh wait there hasn't been any sent out!
ReplyDeleteAnyway, we are enticing people and then changing the paying (whoops that's playing)field as we go. Or leaving out details that should have ALL been worked out before leases are drawn. My hope is that this is pulled together and this jewel of a location all comes together....
Chris
Gee, I don't know. You mean put out a flier that the Casino Building will have space available at $30 psf and see who is a taker. We'd have to give a few businesses first right of refusal at that price, but if they pass, it appears we have others willing to take the plunge.
ReplyDeleteIf no one takes the space at that price.... well let's make a deal.
I will again state my opinion that the north should be one restaurant, up and down. Who, is up to applicants and commission, but at $30 psf, the owner has the option of making upstairs an overflow area, special events and parties area, or not staff it when business is slow like many restaurants do with excess space.
Having two competing business for breakfast, lunch and dinner, even if they are different concepts will create two mediocre venues instead of one strong one.
c
That is your opinion. The owner of Mulligan's does not agree with you. Having any one owner leasing all of that space, is not a good idea should that restaurant fail. That is my opinion.
ReplyDeleteHaving competition is always a good thing. The product won't get mediocre and each restaurant will strive for good quality food and great service.
You guys don't seem to understand the marketing plan. Upon reflection, it seems that the plan is to wait for somebody to come in the door, make an offer and submit it to a commission that doesn't act on it. So far that has increased the offers from $22 to $25 to$27 and now $30. 2 or three more rejections and we should be at $40.
ReplyDeleteDoes anybody have a clue what market rent is?
The problem here is that market rent for our new Casino can not be defined. There is nothing like it anywhere so there are no real, true comps. We need to stop the bidding war. There must be a cut-off date and the Commission must demand that. Leases have to be signed. No more game playing.
ReplyDeleteLease or rent to be collected will not be enough to pay the cost of building the beach property because nobody at government is qualified to under take the job . These people are idiots and do not understand cost over runs, which will make the whole thing over budget. They always go over budget because of all the lying that goes into doing anything in our system.
ReplyDeleteYou told me before that the rent was going to be $30.00 and up on the square foot, now the city is getting offers of $15.00 and $25.00 per sq. ft. Business's today ( especially the smaller ones ) can't pay more then $10.00 per sq. ft. and not because they don't want to but, because their margins ( no profit's ) will not allow them to.
As the economy keeps getting worst by the time it's finished the first wave of tenets will go bankrupt and the building will set there empty for the most part, and keep in mind that our utility rates will be a big cost to the restaurant business in particular. We are in the middle of the tourist season now and the downtown bars and restaurant are struggling, people are not going to flock to the beach at night to drink and eat it up either.
The City needs more money to solve their problem but, they can not see that we are in a deflationary stage which means that there will be less money and all of the City undertakings have just added to their problem, a bunch of under-performing financial moves. Nobody in the private sector would have undertaken the beach project at this time, why would anybody think that government could do it and make it work? The only solution for them will be bankrupty.
It's a clusterfu**, what a show, wow, LOLLLLLLLLLL
This is good! Debate is already working and clearing the air.
ReplyDeleteBill, look at your post and then Anon 5:52 and Anon look at Bills Post then your own.
Now compare the two different view points and what you find in the middle in this economic hardship is, Set the Rate make the leases so both the businesses and the Casino can work. WHEN the economy improves and leases come up and God help me they should not be longer than two year terms! The rates can increase accordingly to full market value.
That is a solid business decision and yes marketing in a down economy that is already starting to show slow crawling signs of recovery.
As for the Leases/Rents paying for the casino, you have to also remember the parking revenue is also in the equation. With an open casino under this plan the people will be more inclined to pay the minimum parking fees for a destination that is worth going to.
Thank You and please keep debating this so we can find the common ground.
Robert Waples
Yes Lynn, I agree the bigger business should be at least 5 years for the amount of investment they will be making THANKS
ReplyDeleteRobert Waples
Robert, you seem like a nice enough guy, but I really have to question your ability to have substantive input on a $13-15 million dollar project. You don't seem to understand the lack of a market for delivery of dirt floor retail space to restaurants and asking for 5 year terms for recapture of Tenant Improvement dollars.
ReplyDeleteYou also haven't touched on the difficulty of telling prospective tenants that the CAM is $7, then negotiating a rent number only to find out that the real CAM charges in the 2nd year are $12 to $14. Other than national tenants, who do you think can withstand that financially.
What do you mean that there are no comps for oceanfront restaurants? What about Delray or West Palm Beach---how about the length of Broward County?
The problem with the Casino project is nobody on Staff has a clue what they are doing in any aspect of this development.
Anybody want to talk about the totally foolish terms for the proposed financing?
Name the restaurants and don't give me big hotels like The Breakers. The truth of the matter is on the comps, the City allowed the prospective tenants to set the market rather than the other way around as long as they met our worst case scenario. Next, this is Lake Worth, not Ft. Lauderdale. This is a brand new building within 50 feet of the Atlantic owned by a municipality. There is no comparable for that.
ReplyDeleteWhat foolish terms for the financing. Please state them. Thanks.
Bill this is very good input but share it with the Commission please! Put together some good examples and help guide them. Sounds like you have done this before so get in the game and provide any information you can to our leaders so they can make the best decisions possible for all of us. I also agree with Lynn, please share some comps that make sense and lets put this input to very good use! THANKS for the input. My input has generated conversation which was entirely my goal and your expertise is greatly needed.
ReplyDeleteRobert Waples
Lynn, you are not required to agree with my experience and comments on the matter of leasing. While we agree that Staff and Smitkin let the prospective tenants set the Rent, I would suggest you ask any commercial broker you respect about the ability, technique and available comps required to set Market Rent for the Casino.
ReplyDeleteThe “foolish terms for the financing” emanate from Steve Carr’s comments in a commission meeting—words to the effect—the $6,000,000 loan will have Debt Service of slightly less than $500,000 and will be collateralized by $1,000,000 in Sales Tax Revenues. This equates to a Debt Service Coverage of +2X. Anybody can do that deal in 5 minutes with any financial institution by presenting LW’s most recent Audit and FY 11-12 Budget---all for a fee of about $50,000. Given the quality of credit of Sales Tax Revenues, a DSC of 1.1X or 1.15X is much more appropriate. It is not as if we won’t need borrowing capability in the next 10 years. Tying up too much Sales Tax Revenues detracts from future borrowing capabilities.
Well, Bill, I have no idea who you are. If you would post under your real name perhaps I might know you. But to come over here and post as "Bill" is meaningless to this debate. Produce the comps. Name yourself. Let's get some credibility here. Thanks.
ReplyDeleteLynn, why would I continue a discussion with somebody who has no knowledge, experience or understanding of the topic.
ReplyDeleteI perform the service you requested for $1,200-$1,500 for comps of this type for projects such as the Casino.
As I sat across from you in the last Commission Meeting and spoke about the Leases, I would respectfully suggest the lack of creditability is not with me.
Big whoopie----------------BILL.
ReplyDeleteRespectfully? Credibility? Bill, that is something you pretend right now. Glad to know you make so much money. You have made the charges. I say tell us who you are. I am rather sure I know.