What's in a Name?

What's in a name?  Apparently not as much as we assumed.

Back on October 30, 2013, E.R. Bradley's Lagoon Saloon opened at our Lake Worth golf course. The city gave them concessions and negotiated kudos on their lease because of 1) the reputation of the owner's other restaurants being a success and 2) the overall reputation of the owners. We wanted to capitalize on their reputation and ability to attract customers to our property and have a successful restaurant there.

The Lease calls for $3,000 a month on a ten year lease (no escalation clause and no percentage of profits) that is renewable for an additional 10 years. The City of Lake Worth will be solely responsible for all utility fees and costs, including but not limited to: telephone, electricity, garbage removal, sewer and water service. I even tried to ascertain whether or not they vacuumed their own carpets and was told that they do but it is not specifically mentioned in the lease.

It's been reported that the ownership of the restaurant has changed hands from the Coniglio family, Frank, Gail and Nicholas, to the gentleman who was managing it, Mitch Reale. Mr. Reale will not confirm this to Lynn's Little bit of Trivia. State records show the new ownership. On February 16, 2015, I submitted a public information request on the change of ownership or assignment of the lease to determine what occurred. The city wrote back that they knew nothing about it. Subsequent to that, I wrote again regarding the subject because of any assignment of the lease must be approved by the city. City Attorney, Christy Goddeau, responded to me in two separate e-mails on February 24:

At this time, the assignment provision of the lease has not been triggered as the original tenant remains the same (E.R. Bradley’s Triple Crown Club LW, LLC d/b/a E.R. Bradley’s Lagoon Salon) which is now solely owned by Mitchell Reale per the Division of Corporation’s records. We have inquired about the use of the “Beach Club” name and its legal status.

It all depends on the assignment provision. In this lease, the assignment provision is not triggered if the tenant (as a legal entity) remains the same and only the ownership interest making up the legal entity changes.

So it seems that there was no protection to the City when a change of ownership occurred along with its most valuable asset, its goodwill.  The original owners of this corporation, the Coniglio's, could have sold it to the garbage man down the street holding itself out to the public that it was the exact same restaurant.  Now that there is a different owner of the corporation, is he required to fulfill all the provisions of the Lease or who is legally responsible? Will the city have Mr. Reale sign a new lease as by law the corporation is a person but it certainly can't sign anything?

How come that many of the contracts that the city enters into seem to have some problem or no protection to the city such as CBS Outdoor, Inc, Greater Bay, etc.. They both cost us dearly. We thought that was all going to change when the City outsourced its legal department and shamefully terminated Elaine Humphrey.