City Lease Resolution
7:31 pm
Tue December 10, 2013

Lease Claim Rescinded (UPDATED)

City of Pensacola withdraws lease default; Mayor promises more dialogue.

The City of Pensacola Tuesday rescinded its claim to back royalties and interest, from two restaurants that are on city-leased property downtown.

City officials backed off their claims that Collier Merrill and his firm, Great Southern Restaurants owed more than five million dollars in default lease payments over the past 13 years involving the Fish House and Atlas Oyster Bar.

Talks to resolve the situation began on Monday, without said city officials. Merrill’s attorney Bruce Partington met instead with members of the private law firm Beggs and Lane – who represented the city, rather than City Attorney Jim Messer.

The original lease for the Pitt Slip Marina property was signed in 1987 between the city and Seville Harbor -- whose founder, Ray Russenberger, sub-leased it in 2000 to Great Southern Restaurants. For Collier Merrill, the last three weeks of disputes end with vindication.

Merrill pays Russenberger about 40 thousand dollars a year in ground lease fees. Russenberger then pays his fees for Pitt Slip to the city. Partington says those are two separate transactions.

If there were any silver linings, says Merrill, it’s that they have received an outpouring of support from fans of the eateries; and that perhaps the city will think twice before sending out a similar letter to another business.

Mayor Ashton Hayward read from a prepared statement issued late Tuesday, that the city’s position has not changed, and “it’s definitely not backing down.” He says the letter that went out to Great Southern Restaurants was only one of a number of similar notices in a mass mailing to lessors of city property.

Both the Mayor and the letter of agreement state basically the same message: calling for an "open and frank discussion,” and that it’s hoped a final resolution can be reached by the end of the year.

Hayward declined to be specific about the lease issues involving the Fish House and Atlas Oyster Bar. The letter withdrawing the claim -- signed by Bruce Partington and city attorney Nix Daniel, also doesn’t say what they might be.

As for Collier Merrill, he says it's time to repair the damage to his business brought about by the default claim. That damage includes parties not booked at his restaurants, and personnel issues.