Isle of Palms Marina Restaurant Lease
The City of Isle of Palms owns the Isle of Palms Marina located on 80 41st Avenue. The site includes a waterfront restaurant on the Intracoastal Waterway, one of the best breathtaking public restaurant sites in the Lowcountry. The restaurant site includes a dedicated dock space along the Intracoastal Waterway and is adjacent to the Isle of Palms Marina and Market Store.
The City is eager to welcome a partner to create a family friendly restaurant for residents and visitors to enjoy.
City Council is excited to be negotiating exclusively with the IOP Families Group, represented by island residents Jon & Bridget Bushnell and Dave & Chrissy Lorenz, who plan to open a new restaurant between Spring and Summer of 2021.
City Council held a Special Meeting on Tuesday, November 3, 2020 to further discuss the proposed lease for the Isle of Palms Marina Restaurant. The meeting included a presentation of the proposed lease by Jon Chalfie, the real estate agent representing the City, and a presentation from the IOP Families Group about their vision of the restaurant and planned capital improvements to the property.
View the presentation from the IOP Families Group here.
View the presentation from Jon Chalfie here.
The building assessment of the existing building, conducted by Hill Construction is available here.
City Council unanimously approved a commercial agreement with Marker116, LLC (also known as IOP Families Group) for the Isle of Palms marina restaurant. The tenant group is represented by the Bushnell and Lorenz families, including Michael Tall.
The tenant will invest approximately $2,000,000 on a complete renovation of the building, improved landscaping, enhanced outdoor facilities and parking lot. The City will not be directly investing in the restaurant property and no public funds will be used during the 24-year term of this lease on the building or restaurant grounds. The tenant will be responsible for the capital investment and risk, construction management and ongoing maintenance of the City owned asset.
The City will have final approval rights of the building design prior to construction and a 3rd party inspector will oversee the construction on behalf of the City.
The lease agreement will commence upon execution and will expire on January 31, 2045, which will coincide with the expiration of the existing marina leases (docks and marina store).
Rent will commence on August 1, 2021. The annual base rents thru 2024 recognize the tenant’s initial capital investment. The additional rent provision of 7% of gross sales over $5,000,000 provides the ability for the City to share in the restaurant’s success from day 1. The base rent and additional rent structure are as follows:
August – December 2021: $40,000
2022 – 2024: $100,000
2025 – 2045: $120,000 + 2% every year
Years 1 – 12: 7% of gross sales over $5,000,000
Years 13-25: 7% of gross sales over $4,000,000
With the assumption that gross restaurant revenues are $5,000,000 in the first full year and increase by 2% a year, the total rent income to the City, including the initial capital investment, will represent approximately 5.6% of tenant gross sales over the 24-year lease term. This does not include tenant expenses for insurance, taxes and maintenance. The lease requires that the tenant supports their additional rent calculation by submitting the ST3 State Department of Revenue Sales Tax Reporting Form on a monthly basis.
The City will also benefit from additional hospitality and business license revenue associated with an operational restaurant.
The tenants will begin construction on the building improvements this fall and expect to open a family friendly, affordable, neighborhood restaurant for residents and visitors to enjoy year-round by Spring/Summer 2021.