Restaurants-America's Letter of Intent accepted by Lake Worth City Commission for Casino Second Floor space

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Restaurants-America

Let's see now--we have a national chain that wants to lease in our brand new oceanside Casino building that will have a panoramic view on three sides that includes the Atlantic Ocean and the Intracoastal Waterway. Good, you say? Good for them.

What they have presented to Lake Worth

1. They have offered $18 a square foot for 5,900 s.f.
2. They want 10 years with 3, five year options to renew
3. When asked, they expect their annual sales to be $4,000,000.00. ($4 mil)...not a penny more.
4. They have agreed to pay the City 3% of annual gross sales in excess of the $4 million.
5. They plan on spending $1 million to build-out the space.
6. If they should leave our casino, anything not nailed down will leave with them. The "kitchen will accrue to the next tenant."
7. They normally spend 5% of gross sales on marketing
8. They pay $18 to $35 at other sites where they have restaurants

What we know about Restaurants-America

1. Not much.
2. They had 19 restaurants in Florida until a few years ago. Their Bar Louie restaurants sold two years ago.
3. They now have 4 active restaurants in Florida: Bluepoint Hollywood that, according to them, only does $4 million a year located at the Seminole Hard Rock Casino, a casino that attracts 30 million visitors yearly, Prime Bar Tampa, Prime Bar Gulfstream and Red Star Orlando.
4. We need a group to visit their Bluepoint in Hollywood and come back with an assessment.

Why this is not a good deal for Lake Worth

1. They may be restaurant "flippers." They build up a restaurant and then sell it within a few years.
2. They would not be paying us any rent during the build-out estimated at 6 - 8 months
3. After that, they want the first 12 months FREE. So, essentially they would be on our property for 20 months paying NO rent in a brand new building that we would be subsidizing for them at a tune of $106,200 a year...peanuts to them but a lot of money to us.
4. If their history is to build and sell within a few years, the City of Lake Worth would only be making $18 a s.f. on ocean property.
5. This Letter of Intent was prepared by Staff and Roger Greenfield, CEO of Restaurants-America, agreed. Well why not?
6. We haven't had any time to test the national chain market.

I was very disappointed that Restaurants-America did not have a Power Point presentation and make their case last night and can only imagine that they did not think it necessary as Staff had dictated the terms in the Letter of Intent. They mentioned that they plan on building their Bluepoint Restaurant. As depicted on their web site, this is not the style we want in order to cater to a more elegant dining experience. In my mind it would be more on the style of the Grill Room on West Monroe Street in Chicago, (I wonder what the price per s.f. is there) however prices there are very expensive and would not be suitable to our market here, oceanside or not:

Single Cut Filet			(8oz) 29.00
New York Strip			(14oz) 38.00
Porterhouse			(22oz) 52.00
Butcher Block Single Cut Pork Chop			24.00
Double Cut Filet			(12oz) 36.00
Bone-In Ribeye			(18oz) 46.00
Center Cut Sirloin 8oz			(10oz) 26.00
Australian Lamb T-Bones			38.00

I agree with the Vice Mayor. This offer in the LI is no where close to where we want to be or where we should be with the second floor. Tell Mr. Snitkin to continue on finding a national chain restaurant for our second floor. Remind all those involved that they are working for The City of Lake Worth, you know, the guys who will pay that commission and pays their salaries.