Russenberger, Merrill to negotiate with Pensacola officials
More than $5 million on line in dispute over Fish House lease
Dec. 3, 2013 7:52 PM |
Written by
T.S. Strickland
FILED UNDER
News
Local News
City leaders will meet Monday with local businessmen Collier Merrill and Ray Russenberger to discuss claims that the two owe more than $5 million in overdue sales royalties and interest from Merrill’s landmark restaurants the Fish House and Atlas Oyster Bar.
Meanwhile, officials are also claiming ownership of the building in which the restaurants are housed and seeking to renegotiate the lease for the property at terms more favorable to the city.
Merrill called the demands a “money grab” on Tuesday and has characterized the city’s claims as “baseless.”
The dispute, which came to light two weeks ago, revolves around the piece of property known as the Pitt Slip Marina — leased to Russenberger in 1987 and subleased to Merrill’s company, Merrill Land, LLC, in 2000.
The city claims taxpayers are entitled to a percentage of sales at Merrill’s restaurants for the last 13 years — a position which Merrill vehemently disputes. He has estimated that satisfying the city’s demands would cost his business more than $5 million, or about one year’s revenue.
The city threatened last month to evict the businessmen if payment were not made by February. Both sides have said they hope that is not necessary, but have also said they would take the matter to court if need be.
The issue of the disputed rent payments, while daunting, is not the only wrinkle of contention to be ironed out at Monday’s meeting. The city is also claiming that the lease for the property on which Merrill’s restaurants stand expired in June. Merrill and Russenberger dispute this point, as well.
The answer is important, because if the lease has, in fact, expired, the title to the restaurants would, according to the lease terms, revert to the city. Officials also hope to renegotiate the lease to reflect the fair market value of the land and improvements.
The Pitt Slip Marina has been a matter of dispute within City Hall since at least 2008 and with Russenberger and Merrill since 2011. In that year, City Attorney James Messer sent the men a letter outlining the city’s stance on the lease renewal. However, the issue of the $5 million in sales royalties was not raised until last month, in a letter sent by real estate attorney Nixon Daniel on behalf of the city.
Merrill has expressed frustration with the city’s apparent evolution of opinion.
In a letter dated Nov. 27 and released to the media this week, attorney Bruce Partington, who represents Merrill, called the city’s legal analysis on all points fundamentally flawed. He also chided the city for leaking the story to the media “for dramatic effect” and said the coverage had been detrimental to Merrill’s businesses.
“This course of action has already caused damage to Great Southern Restaurant Group,” Partington wrote, “and the city is responsible for that damage, and any additional damages to any of our clients.” Partington also demanded that the city reimburse his clients for attorneys fees.
More than $5 million on line in dispute over Fish House lease
Dec. 3, 2013 7:52 PM |
Written by
T.S. Strickland
FILED UNDER
News
Local News
City leaders will meet Monday with local businessmen Collier Merrill and Ray Russenberger to discuss claims that the two owe more than $5 million in overdue sales royalties and interest from Merrill’s landmark restaurants the Fish House and Atlas Oyster Bar.
Meanwhile, officials are also claiming ownership of the building in which the restaurants are housed and seeking to renegotiate the lease for the property at terms more favorable to the city.
Merrill called the demands a “money grab” on Tuesday and has characterized the city’s claims as “baseless.”
The dispute, which came to light two weeks ago, revolves around the piece of property known as the Pitt Slip Marina — leased to Russenberger in 1987 and subleased to Merrill’s company, Merrill Land, LLC, in 2000.
The city claims taxpayers are entitled to a percentage of sales at Merrill’s restaurants for the last 13 years — a position which Merrill vehemently disputes. He has estimated that satisfying the city’s demands would cost his business more than $5 million, or about one year’s revenue.
The city threatened last month to evict the businessmen if payment were not made by February. Both sides have said they hope that is not necessary, but have also said they would take the matter to court if need be.
The issue of the disputed rent payments, while daunting, is not the only wrinkle of contention to be ironed out at Monday’s meeting. The city is also claiming that the lease for the property on which Merrill’s restaurants stand expired in June. Merrill and Russenberger dispute this point, as well.
The answer is important, because if the lease has, in fact, expired, the title to the restaurants would, according to the lease terms, revert to the city. Officials also hope to renegotiate the lease to reflect the fair market value of the land and improvements.
The Pitt Slip Marina has been a matter of dispute within City Hall since at least 2008 and with Russenberger and Merrill since 2011. In that year, City Attorney James Messer sent the men a letter outlining the city’s stance on the lease renewal. However, the issue of the $5 million in sales royalties was not raised until last month, in a letter sent by real estate attorney Nixon Daniel on behalf of the city.
Merrill has expressed frustration with the city’s apparent evolution of opinion.
In a letter dated Nov. 27 and released to the media this week, attorney Bruce Partington, who represents Merrill, called the city’s legal analysis on all points fundamentally flawed. He also chided the city for leaking the story to the media “for dramatic effect” and said the coverage had been detrimental to Merrill’s businesses.
“This course of action has already caused damage to Great Southern Restaurant Group,” Partington wrote, “and the city is responsible for that damage, and any additional damages to any of our clients.” Partington also demanded that the city reimburse his clients for attorneys fees.