Restaurant Lease Flap Is Resolved

Dec 10, 2013

The City of Pensacola has rescinded its claim to back royalties and interest, from two restaurants that are on city-leased property downtown.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. Merrill’s attorney Bruce Partington met with members of the private law firm Beggs and Lane, who represented the city, instead of 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.

Merrill pays Russenberger about $40,000 a year in ground lease fees. Russenberger then pays his fees for Pitt Slip to the city. Partington says those are two separate transactions.

Meanwhile, the next step for Collier Merrill is repairing what he calls damages to the restaurants’ business brought about by the lease flap. That damage includes parties and events being booked elsewhere when the restaurants’ fate was in doubt by some, along with personnel issues.

Merrill says they received an outpouring of support from local residents and fans of the eateries. And he’s hoping that the city will think twice in the future, before sending out a similar letter to another business.

Efforts to reach Mayor Ashton Hayward and City Administrator Colleen Castille were not successful.

Besides rescinding the default notice, the letter of agreement also says that "legitimate issues" remain. It calls for "open and frank discussion," towards reaching a final resolution sometime in the final three weeks of 2013.