What’s now called Crabby’s on the Lakefront will continue operating at the city-owned marina building at St. Cloud’s lakefront under a new 10-year lease approved by the St. Cloud City Council.
The approval at the Oct. 8 Council meeting came despite an advisory committee’s unanimous recommendation in July that the city seek competing proposals for the restaurant space.
The council voted 3–1 to approve the agreement for the marina building. Mayor Chris Robertson, Deputy Mayor Ken Gilbert and Council Member Jennifer Paul supported it, while Council Member Kolby Urban voted against it.
“I would have preferred to go with the EDAC committee recommendation,” Urban said. “I would have preferred that the city put the building out for an RFP (Request for Proposal) and open it up for competition so other restaurants have an opportunity to bid. A formal request for proposal was never opened up. This item was just advertised like every other agenda item is.”
The agreement takes effect Nov. 1 and sets initial base rent at $10,000 a month, with annual increases of 3%. It also provides for additional rent equal to 5% of sales exceeding a threshold established in the lease.
The restaurant’s previous monthly rent was $7,500, according to staff’s report to the Economic Development Advisory Committee in July. The new base rent represents an increase of $30,000 annually before additional percentage rent or improvement credits.
The agreement does include a $75,000 rent credit for improvements being performed by the tenant to the city’s building. During the council meeting, staff said the work must be completed within 365 days and that the credit cannot be applied until the improvements are finished. The planned improvements include new furnishings, lighting, flooring and decor, along with updated landscaping, stainless steel railings and accordion-style windows.
The upstairs Marina Banquet Hall is excluded from the restaurant lease. Crabby’s has a separate 180-day option to negotiate an agreement for that space.
At its July meeting, the Economic Development Advisory Committee recommended solicitation of proposals for a new lease and members expressed concern that the existing rent was significantly below market, questioning whether another operator could offer a higher-quality restaurant or generate more revenue.
However, staff cautioned that seeking proposals could take three to six months, followed by additional lease negotiations, potentially leaving the building without an operator for up to a year.
“I think at that point, if we did that, we’d have to go out for bid for anybody and that could be just fishing in the dark and wonder what’s going to bite,” Robertson said. “We may have a delay in a tenant there … it may cost us more money, lost rent, and we may have to upgrade it at that point to get a good tenant in there. So, I think we have a good tenant.”
The city’s original lease with Crabby’s dates to February 2006. The restaurant is part of St. Petersburg-based Beachside Hospitality Group, whose website says it oversees 15 establishments in 10 Florida cities.
