ACA Acqua Bistro – Facts Surrounding Restaurant Lease

Content of this post:

1. Facts Surrounding Restaurant Lease, by Gupta, Ort and Rocha
2. Frida’s Comment
3. Roni’s Comment
4. Bruck’s Gupta request
5. Arkady’s Comment
   

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Facts Surrounding Restaurant Lease            May 23, 2022

From:  Gupta, Ort and Rocha

With the renewed interest in increasing revenues and cutting costs, it is advisable to review the historical data and deal with the facts surrounding any budgeted items for the fiscal year ending December 31, 2022. To set the record straight, the following facts should be shared with all the unit owners:

• In December 2007, the President of the Board, Mr. Arkady Chase, sent out a memorandum addressing all unit owners and forwarding the revised budget for 2008 as compared to the 2007. According to this document, a subsidy in the amount of $10,000 for 2007 and $9600 for 2008 was approved by the Board for the restaurant. However, under Notes to the Financial Statements, the financial audit for December 31, 2008, indicated that the Association subsidized the restaurant operation in the amount of $14,166. In lieu of rent, the lessee agreed to provide twelve (12) months of restaurant service.  There were no reimbursements for any utilities costs by the Lessee.
• In December 2010, under Notes to the Financial Statements, the Auditors repeated the same comments for the new agreement signed in June 2010. The Association subsidized the restaurant operation in the amount of $14,400. Again, no rental charges for the premises or any reimbursements for any utilities costs were paid by the Lessee.
• Moving forward to April 2015, a three-year lease agreement for the restaurant was reviewed by a Restaurant Committee, formed by the Board. The committee was made up of the following members: Ms. Joan Salvatore; Wendy Miller; Larissa Mitnitsky; Melanie Dayan; Nancy Armin; Pinky (Carolyn) Lebovitz; Teresa Marmolino and Grace Tomicelli.  Again, due to the extensive renovation project being carried out by the Association, the access to the restaurant was compromised.  A change in the Lessee for 2016 faced the same restrictions due to the unavailability of any parking facility.  At the same time, the lobby entrance was closed to any patrons for the restaurant and the unit owners. No rental fees or reimbursements for utilities were claimed under the new lease. The Association subsidized the restaurant operation in the amount of $7500 with no charge for rental or reimbursement for any utility costs.
• A five-year lease agreement, starting September 2, 2018 and ending August 31, 2023, was approved by the Board. Under this agreement, the lessee was charged $100 per month for the first two years and $200 per month for the remainder of the lease. The Association also reduced its subsidy from $7500 to $3500 in 2021 and no subsidy during the current fiscal year.  This lease represented an elimination of subsidy from a $14,166 in 2008 to Zero ($0) in 2022.  There is no justification for charging utility costs when the Association has not provided any official meters for any utilities during the last fifteen (15) years. Only now, the Board chose to install a new independent electrical service including an FP & L meter to record actual usage by the Lessee. The same type of arrangement needs to be made for the Water and Gas consumption by the Lessee.

Regardless of how the current unit owners or the Board feel, the membership at large needs to be aware of the facts related to how the lease agreements for the Restaurant have evolved over a period of time.  It is no mystery as to why, in the past, there have been no charges claimed for rental   and/ or reimbursement for utilities. It is only under the current lease that we have iniated payments of monthly rental, elimination of yearly subsidy, and a basis for charging actual electric usage with a new lease in the future.

The Board, through its management personnel, should insist on getting the meter installed as soon as possible to enable the lessee to start paying for the use of electricity. The electrical contractor that installed the independent electrical service to the restaurant should also be able to utilize his contact at FP&L to facilitate the meter installation. The drawings to acquire the permit were submitted to the City of Hollywood back in November 2021. The permit is still open pending the final inspection after the meter has been installed.

Any reduction in the amount of annual subsidy or a charge for any amount in rental has the same impact on our operating budget.  In fact, by eliminating the subsidy of $7500, it represents an equivalent of $625 per month rental charges in addition to the $200 per month rent amounts to $825 per month currently stipulated for the remainder of the lease expiring on August 31, 2023.

The former Board of Directors were keenly aware of the importance of having a regionally acclaimed Italian restaurant on our premises. The proof of success has been the need to hire additional valet personnel to handle visitors’ parking and the appreciation by our residents to have access to such an outstanding amenity. This trend has been recognized for the last fifteen (15) years and must continue for the benefit of our residents.

Are there ways to improve the current lease agreement? Surely, we can all benefit from a more clearly defined agreement.

Signed for the former Board of Directors

Bhagwan (Buck) Gupta,    804S
Judy Ort,    1605N
Victor E. Rocha,    1404N 

from: Frida Abrahamian          May 23, 2022

Thank you very much for providing the history of financial relationship between the restaurant and the Aquarium board.

Is there an explanation as to why the board subsidized the restaurant in addition to providing free rent and utilities?  Does this arrangement make the board an investor in the restaurant, and are there any tangible benefits from this arrangement to the residents of Aquarius, other than the convenience of having a regionally recognized restaurant on it’s grounds. The “Sunset Menu” which is offered to all customers  until 6:30pm, is available to the residents for the entire evening, excluding the holidays, appears to be the only benefit. We are even required to pay “uncorking” fees which does not seem fair when coming from a restaurant getting such a sweet deal from the Aquarius.

The success of the restaurant manifested as increased demand on valet services, also results in increased utilization of our lobby furniture, bathroom facilities and the pool deck, all serviced by our maintenance personnel.  The increased traffic also raises security concerns as the restaurant patrons seem to have unlimited access to all lobby and east pool deck areas.

We definitely should have a more defined agreement, and the residents should be getting more benefits from this arrangement, given our significant financial contribution to the operating expenses of the restaurant.

Frida Abrahamian, 502S