Cape Coral City Council kicked proposed terms for a concessionaire agreement at Jaycee Park back to the negotiation table Wednesday.<\/p>\n
Council directed staff to continue to meet with the Kearns Restaurant Group \u2014 the only potential partner to submit a request for proposal for operation of planned food and beverage operations-\u00a0and to bring the city attorney into the terms talks.<\/p>\n
The rejected term sheet called for a 20-year agreement with an option to renew for another 10. The agreement also included three types of concession fees to be paid to the city -$1,064,876 plus interest to be paid monthly over 20 years; minimum guarantees of $75,000 per year, or $6,250 per month and an escalating percentage of total gross receipts \u2013 4% in years 1-10, 5% in years 11-20 and 5.5% during any renewal period.<\/p>\n
Council members questioned the financial terms, saying they felt the city should get a better deal, hopefully with the Kearns Group.<\/p>\n
The 90-minute Jaycee Park discussion included a multitude of issues ranging from the initial payment, the long-term agreement and financial partnership with the boat slips to the ability to share the revenue of the food truck rent and the selling of alcohol by the concessionaire.<\/p>\n
Council also discussed the original agreement it had made with an earlier potential partner. That agreement called for upfront money but the private partner could not secure funding as it would not own the building.<\/p>\n
Councilmember Keith Long said trying to secure the same terms as were in previous agreement was not feasible \u2013 that the city is learning from a mistake that did not work out.<\/p>\n
\u201cIt\u2019s money. It\u2019s always the money. The alternative is no money. Any money is better than no money, but we don\u2019t want to roll over,\u201d he said.<\/p>\n
Long encouraged council to come up with an alternative, as the dais is, realistically, the negotiating table. <\/p>\n
Mayor John Gunter pointed out that the city has expended considerable funds \u2014 paying for the cost of the bistro shell, food truck pads, utilities and grease traps, all totaling $1,310,906.67 \u2014\u00a0and wants to recoup what it can via an agreement for operations and management.<\/p>\n
\u201cIf that is what we built and that is what the infrastructure we have put in place, that is the money I want to see brought back, not the $1.064 million,\u201d he said of the amount in the proposed term sheet as negotiated by city staff.<\/p>\n
Gunter also said the city should get a portion of the food truck rent.<\/p>\n
\u201cWe would be better to rent the pads out and then rent the building out,\u201d he said, adding that it would \u201cgenerate more revenue that way. If this is my property, I would separate the two.\u201d<\/p>\n
Other council members were in favor of the mayor\u2019s suggestion.<\/p>\n
Council reached a consensus that they would like to see a 10-year agreement with two 10-year renewals.<\/p>\n
The council consensus was also in favor of continuing to work with the Kearns Group.<\/p>\n
\u201cThirty years is a very sweet deal,\u201d Councilmember Joe Kilraine said. \u201cI appreciate the opportunity to have the Kearns. I don\u2019t see the city is being aggressive enough in what we expect to be paid for such a location and opportunity. I would look to structure that initial payment in a different manner and get you to have a little more skin in the game.\u201d<\/p>\n
Councilmember Bill Steinke said the initial payment is not an initial payment unless it is made \u2013 not a contribution over 20 years. He said under the proposed terms the city was, essentially, the bank for the concessionaire.<\/p>\n
Steinke also spoke to the partnerships of boat slips.<\/p>\n
\u201cThey pay $1.3 million towards that and we credit that back to them against the minimum guarantee. We use their money. That\u2019s not a contribution. That is fronting of it to be repaid later,\u201d he said.<\/p>\n
Councilmember Laurie Lehmann said when the original concessionaire was involved, the party had to come up with earnest money of $1.3 million to pay for the building.\u00a0<\/p>\n
\u201cNow we are making an exception for the Kearns Group \u2013 make upfront money of 240 equal installments. I don\u2019t think so. Building the boat slips \u2013 we might as well do it ourselves. That is ridiculous \u2013 we are going to give them the money back. I don\u2019t agree with this at all,\u201d she said.<\/p>\n
City Manager Michael Ilczyszyn said directions to city staff were as \u201cclear as mud\u201d for the initial term sheet for the Jaycee Park Concessionaire agreement with the Kearns Restaurant Group.<\/p>\n
Assistant City Manager Mark Mason provided some history.<\/p>\n
He said on Dec. 10, 2025, council discussed three options for the final build out for the concessionaire building \u2013 build a shell building and then go out for requests for proposal for a new concessionaire for operations. The RFP was issued on Dec. 12 and closed on Jan. 13.<\/p>\n
The documents were downloaded by 11 reviewers and four engaged with select areas of solicitation without moving onto submission.<\/p>\n
The city received only one proposal \u2013 the Kearns Restaurant Group, which was deemed responsive and compliant.<\/p>\n
Mason said they met internally on Jan. 21 to review the proposal and then met on Jan. 28 and Feb. 4 for the term sheet talks.<\/p>\n
City Attorney Aleksandr Boksner was not involved in the meetings which became not only a sticking point with some on council but with Boksner who recommended council reject the terms city staff brought forward.<\/p>\n
\u201cIn reviewing the material terms of the proposed operation for the Jaycee Park concessionaire agreement \u2013 in this point in time my legal recommendation is they should be rejected,\u201d he said. \u201cProvisions are not favorable to the city in regards to what is proposed. This is not the favorable deal that the city should proceed forward with.\u201d<\/p>\n
Boksner said the 20-year initial term is really 30 years with the automatic renewal provision.<\/p>\n
Council members all agreed that Boksner should be part of all conversations regarding the term sheet.<\/p>\n
Boksner said he was initially a part of the discussion but then the document was modified by the proposer\u2019s attorney and he was no longer a part of that conversation.<\/p>\n
\u201cIt is important that the city attorney office is present and involved in the agreement,\u201d Gunter said. \u201cWhy you weren\u2019t involved in the whole process is beyond me. You are a part of the process. It\u2019s a little unsettling to me, the city attorney that doesn\u2019t agree with what is being provided.\u201d<\/p>\n
Mason said the concessionaire lease area would be located in the \u201cwet zone\u201d \u2013 the southern southeast corner of Jaycee Park. He said if the Kearns Group is awarded the agreement, a newly formed LLC would be formed to operate called the Kearns Restaurant Holding LLC.<\/p>\n
As for the staff-negotiated terms, Mason said the concessionaire would be responsible for the buildout of the building shell with anything needed to operate the facility.<\/p>\n
Although the hours of operation are determined by the concessionaire, there would be no operation between 9 p.m. and 8 a.m. except for the usual closing and cleaning process.<\/p>\n
Mason said the building and site would be the responsibility of the concessionaire and would need to be kept in exceptional condition with immediate repairs as needed. In addition, the cost of utilities, tax and assessments for the concession area and food truck court would be the responsibility of the concessionaire.<\/p>\n
As tendered by staff, Mason said there also is a financial partnership for the construction of the planned boat slips. He said the Kearns Group would provide any and all construction services for 24 boat slips, a maximum of $1.3 million.<\/p>\n
\u201cWe would credit the minimum guarantee for the term for however long it takes to recover $1.3 million, which is about 18 years,\u201d Mason said.<\/p>\n
Ilczyszyn explained the riverfront component.<\/p>\n
He said part of the Parks and Recreation Master Plan was to \u201cactivate the waterfront,\u201d which is the reason for the dock component at Jaycee Park.<\/p>\n
\u201cThe dock portion of this that is presented to you is not a make-or-break material term,\u201d he said. \u201cThe bones of the deal are still there.\u201d<\/p>\n
Ilczyszyn said the idea is cost saving.<\/p>\n
\u201cBring in that cost, it comes into the general fund and competes with all the other revenue expenses,\u201d Ilczyszyn said. \u201cIt\u2019s a way to taking the revenue generated at the park and reinvesting it in the park to accomplish the master plan goal of waterfront activation.\u201d<\/p>\n
He said the cost to the city of hiring a construction and management firm would be more than $1.3 million. With the proposal in hand, the city and taxpayers would save money by not having to hire another contractor and management firm.<\/p>\n
\u201cIt is intended to be an administrative mechanism to get it done with revenues already generated there,\u201d Ilczyszyn said.<\/p>\n
There was also discussion about alcohol being sold by the concessionaire, something council had already approved.<\/p>\n
Ilczyszyn said he spoke to five different possible partners stating that the reason they did not submit a proposal was they were not willing to take the risk of putting a half a million dollars to get a liquor license to generate revenue.<\/p>\n
\u201cSadly, whenever I see this topic, I get a lot of anxiety,\u201d Councilmember Jennifer Nelson-Lastra said. \u201cFor me, I really think we need to come up with a compromise \u2013 think of another way without the sale of alcohol.\u201d<\/p>\n
Long said if there is no alcohol the deal is done, as \u201cthese things exist to generate sales from alcohol.\u201d<\/p>\n
\u201cTo create a brand-new park and debt without a revenue generating source, which is alcohol, I wouldn\u2019t have supported that at all,\u201d he said. \u201cThe only way debt is depleted is if we maintain the initial plan to have alcohol in the park.\u00a0 Nobody is going to move forward without any alcohol.\u201d<\/p>\n