Isle of Palms Marina Restaurant

The marina restaurant tenants provided the following update to Real Property Committee on May 4, 2021:

• Interior demolition has been completed which allows the architects and engineers to visually inspect the framing and design a roof securing system.
• Interior demolition also removed outdated electrical systems, kitchen hardware, and duct work which needed to be replaced.
• Structural roof strapping for the rooftop bar has been completed and passed inspection.
• The floor on the intracoastal waterway side of the restaurant has been improved.
• The architectural plans have been submitted to the city building department for approval. Once approval occurs interior framing will begin.

The City of Isle of Palms City Council approved the design of the new marina restaurant on February 23, 2021 at their regular meeting. This approval was preceded by a presentation from the IOP Families group who are in the process of remodeling and redesigning the restaurant. The PDF of their presentation is available here.

City Council held a Special Meeting on Tuesday, November 3, 2020 to further discuss the proposed lease for the Isle of Palms Marina Restaurant. The meeting included a presentation of the proposed lease by Jon Chalfie, the real estate agent representing the City, and a presentation from the IOP Families Group about their vision of the restaurant and planned capital improvements to the property. 

View the presentation from the IOP Families Group here.

View the presentation from Jon Chalfie here.

The building assessment of the existing building, conducted by Hill Construction is available here.

The full text of the lease approved by Council for First Reading on October 27, 2020 is available in the Special City Council Meeting Packet linked here.

City Council unanimously approved a commercial agreement with Marker116, LLC (also known as IOP Families Group) for the Isle of Palms marina restaurant. The tenant group is represented by the Bushnell and Lorenz families, including Michael Tall.

The tenant will invest approximately $2,000,000 on a complete renovation of the building, improved landscaping, enhanced outdoor facilities and parking lot. The City will not be directly investing in the restaurant property and no public funds will be used during the 24-year term of this lease on the building or restaurant grounds. The tenant will be responsible for the capital investment and risk, construction management and ongoing maintenance of the City owned asset.

The City will have final approval rights of the building design prior to construction and a 3^rd party inspector will oversee the construction on behalf of the City.

The lease agreement will commence upon execution and will expire on January 31, 2045, which will coincide with the expiration of the existing marina leases (docks and marina store).

Rent will commence on August 1, 2021. The annual base rents thru 2024 recognize the tenant’s initial capital investment.  The additional rent provision of 7% of gross sales over $5,000,000 provides the ability for the City to share in the restaurant’s success from day 1.  The base rent and additional rent structure are as follows:

Base Rent
August – December 2021: $40,000
2022 – 2024: $100,000
2025 – 2045: $120,000 + 2% every year

Additional Rent
Years 1 – 12: 7% of gross sales over $5,000,000
Years 13-25: 7% of gross sales over $4,000,000

With the assumption that gross restaurant revenues are $5,000,000 in the first full year and increase by 2% a year, the total rent income to the City, including the initial capital investment, will represent approximately 5.6% of tenant gross sales over the 24-year lease term. This does not include tenant expenses for insurance, taxes and maintenance. The lease requires that the tenant supports their additional rent calculation by submitting the ST3 State Department of Revenue Sales Tax Reporting Form on a monthly basis.

The City will also benefit from additional hospitality and business license revenue associated with an operational restaurant.

The tenants will begin construction on the building improvements this fall and expect to open a family friendly, affordable, neighborhood restaurant for residents and visitors to enjoy year-round by Spring/Summer 2021.