Isle of Palms Marina Restaurant Lease

Milestone timeline:

City Council approved a contract with Hill Construction to conduct an assessment of the restaurant building
Completed: Nov 27, 2018
Nov 27 2018
City Council approved a contract with Lee & Associates to assist and advise the City through the Request for Proposals process for the Isle of Palms Marina restaurant lease
Completed: Apr 24, 2019
Apr 24 2019
Hill Construction presents building assessment report to the Real Property Committee
Completed: May 1, 2019
May 1 2019
City advertises a Call for Offers to seek proposals to lease the marina restaurant building and dock space
Completed: Jun 12, 2019
Jun 12 2019
Deadline for submission of proposals. The City received three (3) proposals
Completed: Aug 30, 2019
Aug 30 2019
City Council holds a Special City Council meeting to allow a public presentation of the three (3) proposals received
Completed: Sep 26, 2019
Sep 26 2019
City Council voted for the City to enter into exclusive negotiations with the IOP Families Group (Lorenz & Bushnell) and begin the due diligence period
Completed: Dec 10, 2019
Dec 10 2019
City grants extension request to the restaurant's due diligence period
Completed: Apr 1, 2020
Apr 1 2020
City Council engaged Haynsworth Sinkler Boyd as real estate attorneys to assist in the development of the new marina restaurant lease document
Completed: Jul 27, 2020
Jul 27 2020
City presented the first draft of the lease to the IOP Families Group for their review
Completed: Aug 21, 2020
Aug 21 2020
IOP Families Group returns draft lease agreement with comments and revisions for City's consideration
Completed: Sep 8, 2020
Sep 8 2020
City reviews comments from IOP Families and presents revised version of lease agreement to the restaurant group
Completed: Sep 21, 2020
Sep 21 2020
City staff and IOP Families Group along with the respective attorneys meet to discuss revisions to the second draft of lease agreement
Completed: Sep 29, 2020
Sep 29 2020
IOP Families to return final lease agreement document to the City by Thursday, October 1, 2020
Completed: Oct 1, 2020
Oct 1 2020
City Council unanimously approves lease agreement with the IOP Families Group
Completed: Oct 27, 2020
Oct 27 2020
City Council holds a Special Meeting to further discuss the proposed lease with the IOP Families Group
Completed: Nov 3, 2020
Nov 3, 2020
City Council will hold a Special Council meeting to consider second reading of proposed lease with IOP Families Group
Nov 10 2020

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. 

Project Updates

Presentation During Special City Council Meeting from Real Estate Agent and IOP Families Group
Tuesday, November 3, 2020

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.

 

Marina Restaurant Lease
Tuesday, November 3, 2020

The full text of the lease approved by Council for First Reading on October 27, 2020 is available in the Special City Council Meeting Packet linked here.

Council Approves Commercial Lease with IOP Families Group for IOP Marina Restaurant
Wednesday, October 28, 2020

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:

Base Rent
August – December 2021: $40,000
2022 – 2024: $100,000
2025 – 2045: $120,000 + 2% every year

Additional Rent
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.

Real Estate Attorney Drafting Lease Documents
Tuesday, July 28, 2020