Green Lion warns it may take Palm Coast to court over restaurant at golf course

With a deadline to reach a new agreement on Friday with Palm Coast, the Green Lion is warning it may take the city to court over any attempt to drive the restaurant off of the Palm Harbor Golf Club. 

The city and the Green Lion have clashed during negotiations over an agreement for the Green Lion to continue running a restaurant in a portion of a city-owned, triple-wide trailer at the Palm Harbor Golf Club.

The negotiations have become heated at times with Tony Marlow, one of the restaurant's owners, calling City Council members “crooks" during a meeting last week.

The Marlow family also owns the Golden Lion, a popular restaurant operating for decades in Flagler Beach.

The City Council has maintained it has a right to terminate the existing agreement at its own discretion because it has a provision allowing termination without cause. The City Council wants the Green Lion to agree to pay half the water bill for the shared trailer.

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Attorney for Green Lion says agreement valid through 2027

But John P. Ferguson, an attorney with Cobb Cole representing the Green Lion, sent a letter dated Tuesday to City Council members, the city attorney and the city manager stating the existing agreement was valid through Aug. 31, 2027.

Ferguson also wrote that by adding utilities, the city was proposing to charge the Green Lion 86% above the fair market value for the rent. 

Ferguson wrote that he understood that the city planned to terminate the contract based on a provision “that the city admits was intended only if the city had to close the golf course, which is not happening."

Ferguson then wrote in bold letters that the “Green Lion reserves any and all rights to legally challenge the city’s attempt to terminate the existing contract using that provision.” 

Mayor David Alfin said in a phone interview late Wednesday afternoon that he had not yet read the letter but he said the city cannot subsidize a private business. 

“Are you making any money? If the answer is yes, I can’t very well subsidize continued profitability with taxpayer money. I just can’t do that.”

Alfin said the utilities are the Green Lion’s responsibilities. 

“We have no control over the use of the utilities, so rightfully it belongs to the tenant that uses those utilities,” Alfin said. 

Alfin questioned the Green Lion’s contention that it has the right by the prior agreement to remain at the golf course until 2027. 

“Intended? How do you define intended?” Alfin said. 

He said that it was his hope that the Green Lion and the city could reach an agreement but he also said the negotiations had been going on for a long time. 

“There's a long history. Fifteen months for a $24,000 lease: You got to be kidding me,” Alfin said. 

“They are free to make as much profit as they care to. That's up to them," Alfin said. "The city should not be in the business of being in business.” 

Christopher Marlow, who is the son of Tony Marlow, declined to comment about the issue on Wednesday afternoon.

Water bill remains a sticking point

The city reached a concession agreement in 2017 with the Green Lion allowing the restaurant to open at the Palm Harbor Golf Club. But when it came time to renew it for another five years, council members objected because the city was paying more for utilities and other costs for the shared trailer than the Green Lion paid in rent. 

The Green Lion currently pays $600 a month in rent for its space while the city pays the entire water bill of about $2,000 a month, the electric bill of about $1,500 a month and the propane bill of $550 a month.  

While both the city and the Green Lion use electricity and water, propane is used entirely by the Green Lion.

At the June 21 meeting, the city’s Chief Development Officer Jason DeLorenzo updated the City Council proposing a rate of $9 per square foot which would increase the rent to $1,998 a month, generating $23,859. The utilities would cost the city about $24,000 a year. The rent would increase 3% per year, DeLorenzo said.

But City Council members decided that was not enough, saying the city would still lose money on the first year because it would be paying the entire water bill, even though the city said the Green Lion used more water.

The City Council decided that the Green Lion would have to pay for half the water bill and gave the restaurant 10 days to decide. 

In the letter, Ferguson wrote that an expert for the city had stated that the fair market value for the Green Lion’s space was $9 to $10 including utilities.  

He wrote that the city was now asking the Green Lion to pay 86% over fair market value because it was requiring the city to pay rent at $9 a square foot plus electricity at $3.95 a square foot plus water at $4.69 a square foot.  

Ferguson offered a compromise that included the city paying $9.50 a square foot in which the city would receive $25,184.50 annually. Ferguson wrote that would mean that the city would make a profit of $3,752.  

Ferguson said that rate would include the full patio deck. The city had wanted to reduce the amount of patio deck leased to the Green Lion.

Ferguson included some revisions to the existing lease, including removing the termination-without-cause provision, which is something the city had previously agreed to.