Fernandina Beach City Commissioners will hold a shade (closed to the public) meeting Tuesday to consider possible settlement with the leaseholders for Brett's Waterway Cafe for lost revenue the restaurant blames on the city.
But as the city records show, the restaurant did not experience a dramatic drop in food and beverage sales.
According to financial records provided to the city, Brett's earned $2,629,015.17 from June 2022 to May 2023. The records show the restaurant pulling in $2,780,594.25 from June 2023 to May 2024. The city received nothing in rent payments from that $5.4 million in gross sales.
The no rent outcome is a result of Center Street Restaurant Group taking advantage of a loophole in the lease agreement with the city. As originally written, the city was poised to receive 5% of gross revenues generated by the restaurant and gift shop. But Center Street soon found a workaround in the lease where they were able to sublet the lease to outside business interests. That diluted the original 5% gross into 5% of whatever the sublease holder paid to Center Street Restaurant group.
"Obviously this wasn't the original intent of the lease with the city and it's really not fair to the city," said former City Attorney Tammi Bach at a commission meeting last May. "But that's how the lease is written."
Bach told commissioners that there are currently two businesses on the sublease. First is Amelia's Restaurant Inc., who in turn is subletting the building to Brett's Waterway Cafe Inc.
Newly elected commissioners Genece Minshew, Tim Poynter and Joyce Tuten will weigh in for the first time on whether the city should bow to Brett's demands for lost revenue. Center Street is also seeking its attorney costs in the arbitration case.
The assertions in the Center Street filing include the statement that "the City's public accusations that the substructure was unsafe, coupled with the public litigation resulting therefrom, had succeeded in accomplishing the City's intent to discourage and stop the public from dining at Brett's."
However, gross revenue reports contradict those assertions.
For the five-year period when Center Street paid the city rent on the building from 2018 to 2022, Brett's earned $13 million and paid the city about $35,000 in rent using the 5% formula from the sublease total of $714,602 in gross sales.
In June 2023, Sturges called the city's concerns about the building's safety "a witch hunt" following a Kimley-Horn and Associates inspection of Brett's substructure over the river. The engineering firm said, “We recommend that the building structure, pedestrian access adjacent to the structure, and the area beneath the structure be closed and cordoned off until repairs can be made to the substructure and structure."
According to public records, Sturges and Todd Ericksen -- a bartender at Brett's -- are co-owners of Pirates Booty, a building on Beech Street that houses Sturges’ building business and Ericksen’s real estate business, Amelia Sunrise Realty.
That decision was later stopped by a judge who ruled that the city Board of Adjustment had not followed proper procedures during Brett's appeal of the order to vacate.