Rhino Times editor John Hammer takes a closer look at the City of Greensboro’s lease negotiations with popular downtown restaurant and bar Cafe Europa.
While the issue apparently has been resolved—Cafe Europa is staying put for the time being—Hammer says the city’s version of lease negotiations “has some holes”:
I was told that the lease payment for Cafe Europa had not been renegotiated in 18 years. That is not true. The lease was raised according to the city’s policy at a rate in accordance with the consumer price index. Also, in 2014, when John Rudy sold the business to Pucilowski, it was discovered that the city had never signed the current lease for Cafe Europa. So since 2009, Cafe Europa had been operating without an enforceable lease.
The city claimed that the fact that the lease hadn’t been renegotiated in 18 years was why the rent payments were too low, as if that was somehow the fault of Cafe Europa. However, the city had the opportunity to raise the rent in 2014, since a new lease had to be drawn up. Why was the rent payment far below what the city in 2018 thought was appropriate? Because in 2014 the city decided that it was appropriate.
…The backstory is that Cafe Europa got caught up in politics. The city for whatever reason wanted to remove the man who was leasing the Gillespie Park grill. So the city invented a policy of putting leases out for an RFP. The first time the RFP was advertised, the owner of the grill was the only one who responded. So rather than granting the lease to the only respondent, the city issued a second RFP and found someone else to lease the grill.
Remember the city’s story for putting Cafe Europa’s lease up for bid was the restaurant had been benefitting from less -than-market rent prices for so many years. Yet Hammer cites an email from a city official citing the city’s decision not to raise rent in the interests of having the space occupied in an uncertain economy.
Again, it all worked out for the foreseeable future–depending on one’s definition of the “forseeable future.” and yes, Cafe Europa is housed in the city-owned Cultural Arts Center building, so it had skin in the game. Still, the moral of the story here is gov’t perhaps should be only in the business of providing core services to its citizens, and restaurants are not one of those services.
