FBCC votes 4-1 to renegotiate Atlantic Seafood lease

Submitted by Suanne Z. Thamm
Reporter – News Analyst
August 4, 2021


Upon reconsideration at their August 3, 2021 Regular Meeting, the Fernandina Beach City Commission (FBCC) voted to direct City Manager Dale Martin and City Attorney Tammi Bach to enter into negotiations with Mrs. Anne Coonrod on a new lease for Atlantic Seafood.  Vice Mayor Len Kreger, the lone dissenter, maintained that any additional square footage beyond the current footprint of the Atlantic Seafood lease should be advertised to all potential bidders via RFP.

In connection with waterfront improvements, the City plans to extend the existing boardwalk north into space currently occupied by Atlantic Seafood.  Talks between the City Manager and the tenant have been ongoing for months regarding the possibility of a new building to house Atlantic Seafood along with seated and carryout food service.  Construction costs for a new building would be borne by the tenant, not the City.

Now that the first phase of the City’s waterfront resiliency plan has been approved, construction along the waterfront is imminent.  Consequently, in April the City provided Mrs. Coonrod with a 180-day notice of its intent to extend the boardwalk, as required by the lease agreement.

Despite a variety of reports and rumors circulating in the community, the leaseholder has no plans to build a 9,000-plus square foot building on the proposed new site, which is to the south of its current location.  Nor has the FBCC agreed to a new lease, a new building or any building design.  Any plans for demolition of the existing structure and building a new structure would need design approval from the City’s Historic District Council; any alterations to the current lease, which has 6 more years to run, would need approval from the FBCC.  

Mayor Mike Lednovich

In response to a request from Mayor Mike Lednovich, City Manager Dale Martin provided language contained in Section 30 of the current Atlantic Seafood lease, which was approved by the FBCC in 2008 (Resolution 2008-71).  Entitled “Extension of City Boardwalk,”  this section states:  “In the event that additional land, space or square footage is required by Tenant to accommodate the replacement of the Demised Premises and/or add additional services to the business, the parties shall renegotiate this Lease …”

Mayor Lednovich said, “This isn’t a matter of whether we renegotiate with Ms. Coonrod.  It’s a matter of we renegotiate or she has 6 years left on her current lease.  Or we buy her out.”

City Manager Martin clarified:  “We gave a 180-day notice of intent to commence construction, NOT a notice that we intend to demolish her building.  She plans on operating that business longer than 180 days.  We provided her with a 180-day notice of our intent to install a new boardwalk.  Nothing about demolition of her building.”

Commissioner Chip Ross moved that the City Attorney and City Attorney begin negotiations with Mrs. Coonrod to create a new, triple net land lease of not more than 9,000 square feet.  Commissioner Bradley Bean seconded the motion.

Anne Coonrod

Anne Coonrod addressed the FBCC, reading from prepared remarks.  She said that she has lived in the City since 1973 and owned several businesses during the intervening years.  She has owned Atlantic Seafood for 48 years.

“We all have the same goals of balancing tradition, innovation, protection of our natural beauty, and a strong and diverse economy,” she said.

She said that the FBCC-approved resiliency plan calls for building a sidewalk in and through the current Atlantic Seafood building.  Since 1985, her plans for the future of Atlantic Seafood have included a market and a restaurant.  She concluded by asking the FBCC to work with her “to optimize the needs of residents and tourists to insure that our waterfront remains viable and lively, and an integral part of life on this island.”

Three other speakers addressed the FBCC to stress the importance of Atlantic Seafood to the health of the marina as well as its traditional role in the community.  Also noted was Mrs. Coonrod’s long history of service to a variety of causes and organizations in the City.

Vice Mayor Len Kreger

Vice Mayor Kreger said he thought it was unreasonable to allow a tenant who had a lease for a 1,500 square foot building to be able to renegotiate without competitive bidding to expand that lease to include 9,000 square feet.  He suggested that many parties might be interested in securing this lease.

“We are not opening this to the public.  If we want commercial in that area, the proper process is to issue an RFP, not grant a significant extension to the current lease.  That’s like the good old boy, good old girl system.  I don’t think that is appropriate for the City.  I think we need to be transparent and give everybody the opportunity,” Kreger said, also alluding to reports that Coonrod plans to sublease to another party.

Ross acknowledged that it would be a significant increase, but he said, “We are just asking the City to negotiate.  They will have to come back to us with any plan.”

Commmissioner Bradley Bean

Commissioner Bradley Bean reminded Commissioners that Atlantic Seafood has 6 years remaining on its lease.  “We must honor the lease as it stands,” he said.  “Six years is beyond all our terms. … If we are going to proceed today [with waterfront plans], we need to make sure we have a negotiation in place and we see what the deal is.  There is a lot of talk right now about finding the absolutely optimized, perfect deal.  We would have a difficult time finding the best deal, but it is easy to find the right deal:  That’s Atlantic Seafood.”

Lednovich said the criticism that Commissioners have received in emails questions allowing Atlantic Seafood to increase the size of its lease.  There have also been questions about extending the lease to 40 years.  He said that 40 years is a financing standard for new commercial construction.  He also restated some of Kreger’s concerns.

Commissioner Chip Ross

Ross said, “We talk about public/private partnerships.  And this is a public/private partnership. We have a partner with a known track record.  We have a partner who is ready, willing and able and who plans to put money into the project.  I’d like to hear what they plan to offer us in negotiation.  The only thing the City is putting into this is the land; [Atlantic Seafood is] footing the development costs.”

City Attorney Tammi Bach reminded the FBCC that conceptual drawings and working with an architect cost money.  She wanted some guidance from the FBCC on what size building they found acceptable to prevent a back and forth exercise that would be costly and time consuming.  “If you are only thinking about 3,000 square feet, I don’t want to put Mrs. Coonrod through that because it will cost a lot of money [to deviate from conceptual plans] that show use of 9,000 square feet for outside seating and landscaping.”

Commissioner David Sturges

Commissioner David Sturges acknowledged receiving a lot of questions about this issue.  “The reality,” he said, “is that Anne Coonrod is a pillar of this community. … Our goal  is to get that seawall built and have our waterfront look the way we want it to look.  We need to come to consensus on size.”

Kreger asked, “Is this in the best interest of the community?  We haven’t got a clue because we haven’t gone out and solicited interest via an RFP.  There are many other highly qualified and interested people in this community who would probably be interested in that property.”

Ross said that he has spent the last 3 years “beating the bushes” looking for people interested in doing something on the property under discussion.  “I found a couple,” he said, “and then they always backed out.  … We keep pushing, ‘let’s find somebody else,’ ‘there could be a better deal out there,’  Let’s not let perfect get in the way of good.”

Bean stressed that the FBCC is not approving any plan with the pending motion.

Martin said, “All the City is asking for is to comply with the lease as written.  The lease says that with the expansion of the boardwalk, Mrs. Coonrod can ask for additional land, and that’s what she has done.”

Lednovich said that per the lease, the very least the City owes Mrs. Coonrod is an equal amount of space to the space currently occupied by Atlantic Seafood.  He suggested that the remainder of the lot could be put out for bids from all comers.

Mrs. Coonrod addressed the FBCC.  She said that her plans had always included a restaurant because the cost of a new building could not be paid by the seafood market alone.  “If we just build a new seafood market building, we are out of business,” she said.  “That’s why we coupled a relocation plan with food service plans.”

The motion to proceed with negotiations passed 4-1 with Kreger dissenting.

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Dave Lott
Dave Lott(@dave-l)
2 years ago

While there has been no statement by Ms. Coonrod as to the actual size of the building she will build, one must remember that in the I-W zoning there are no front, rear or side setbacks. Being in the CRA, there are no parking space requirements either. Given her remarks I expect to see a building that extends to the maximum limit. With a 35′ height allowance, this could be 2 stories (ala Salt Life). Vice Mayor Kreger was spot on his comments. While the boardwalk could have been routed to by the building for the time being, Ms. Coonrod does have the right in her lease to relocated Atlantic Seafood with the same square footage provided in the original lease. For a six-fold increase in that footprint to enable a restaurant and bar, the City is under no obligation to grant that request. Another issue that the City Manager has never addressed is his proposed annual rent of $7.50 sf is half of what Ms. Coonrod is presently paying under the current lease. He states that is what a commercial consultant advised, yet that consultant’s report in trying to come up with comparable lease costs never mentions the current lease cost.

This deal underway lacks transparency and fairness and will result in Ms. Coonrod and her business partner having the only riverfront restaurant in the City – an asset that other restauranteurs would pay dearly for.

Frank Quigley
Active Member
Frank Quigley(@frank-quigley)
2 years ago
Reply to  Dave Lott

It is hard to follow this. I recall Atlantic Seafood from weekends in FB in the early ’80’s and personally feel the nostalgia associated with it. But it’s correct, as Commissioner Kreger insists, that such a move should be handled via RFP. There’s hardly more desirable real estate for a bar/restaurant (if that is what results) and the city should get the best financial result and the best “partner”.

That said – if we are in fact planning for increasingly higher water levels over the ensuing decades – I have a hard time understanding any investment on the waterfront. Many such cities are, instead, planning for a long term retreat from the water’s edge. Why can’t Fernandina Beach think long term? Why?

John Callen
John Callen (@guest_61975)
2 years ago

It’s amazing that when Jack Knocke shine light on this subject, the commissioners agree to give it a 2nd look.

John Callen

John Callen
John Callen (@guest_61977)
2 years ago

It’s amazing that when Jack Knocke shines a light down this rat whole that the city decides to give it a 2nd look

John Goshco
John Goshco (@guest_61979)
2 years ago

Does anyone know what the current square footage of the lease (the Demised Premises) is? It appears that the original lease only covered the building footprint which, according to the Nassau County Appraiser, is just under 1000 square ft. Better yet, point me toward a location where I can download a copy of the lease and all revisions. The City web site gives me totally random search results and I can’t find the lease/contract on the Nassau Clerk’s site either.

Currently there are ice machines and vending machines outdoors on, what appears to be, the city sidewalk north of the building. There is a refrigerated storage unit and other “storage units” on the south side of the building. There is also a fence around approximately 1300 sf of city property outside the building footprint.

The County Appraiser acknowledges the leasehold and lists the storage units and fence on its website for tax purposes, but the Appraiser only shows the building outline on the property map, not the entire additional “yard space” as it does for my house and most others.

Was the original lease written to include this doubling of the square footage or was it “understood” that Atlantic Seafood could unilaterally expand outside the building footprint and occupy portions of lot 29 as desired?

The reason I ask is that the City (and the County) has a history of sloppy (lack of written) record keeping. I’m not suggesting anything nefarious, but I am curious as to whether Atlantic Seafood is making payments based on the building square footage or the entire land surface it is utilizing. Published reports seem to indicate that lease payments are based on a 1,000 sf building, not the 2,300+ sf property they are utilizing.

Frank Quigley
Active Member
Frank Quigley(@frank-quigley)
2 years ago
Reply to  John Goshco

You can request the documents thru FOIA. Caroline Best is our City Clerk and would be able to find it.

John Goshco
John Goshco (@guest_61996)
2 years ago
Reply to  Frank Quigley