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City outlines terms of boathouse LOI; council presses for quick demolition of burned structure
Summary
City staff reported a negotiated letter of intent for a new concession at the boathouse, including 5–7% split profit sharing on sales and a requirement that the private operator construct a new facility the city will own; council signaled urgency to remove the damaged structure during hurricane season.
City staff updated Cape Coral City Council on July 16 about a negotiated letter of intent (LOI) with the current boathouse operator to replace a burned structure with a new, privately built facility that the city will own once the project receives a certificate of occupancy. The LOI would be followed by a settlement agreement cancelling the existing lease and a concessionaire agreement that sets operations and long-term oversight.
City Manager and legal staff said the LOI improves financial terms for the city: the agreement would remove prior exclusions and give the city profit sharing from dollar one of sales, moving from prior 5.5–6% split arrangements to a stepped 5%, 6% and 7% profit-sharing schedule depending on gross sales levels. Staff said the operator would reimburse half the cost of certain fuel tank replacements and contribute to construction of a substantially larger building the operator will construct on City property. The city will front $1 million to the project, payable over 10 years; staff estimated the new building’s construction cost at roughly $5 million.
Under the LOI the term would be 30 years and the agreement would be a concessionaire license rather than a lease, which the city attorney said gives the city more operational control. The LOI also removes an exclusivity clause for restaurant operations in the yacht-club area, instead offering the operator a first right of refusal so the city retains ability to pursue other food-service operators in the future.
Council members expressed urgency about demolition of remaining damaged structures. The current leaseholder and operator have disputed the cause and effect of the fire, creating a legal dispute staff said must be resolved as part of a settlement agreement. City Attorney and staff said they had included a 30‑day demolition requirement in the LOI but that the date could be shortened; several council members urged the city to accelerate demolition to a one-week window once the settlement is final, citing hurricane-season safety concerns. The manager said the city would be ready to issue permits and had been preparing demolition logistics.
Staff said they expect to return to council with the settlement and concessionaire agreements for formal approval, possibly on Aug. 6, and stressed there are detailed operational provisions in the draft concessionaire agreement intended to preserve city oversight over the yacht-club property. No formal vote was taken July 16; the presentation was an informational update and direction to finalize documents.
