Return to the previous page

David's Anthem Journal

http://anthemjournal.typepad.com/davids_anthem_journal/

The March 25 2010 Board of Directors Meeting on Tirzo's Bistro by David Berman

Tirzo's Bistro Gets a New Lease on Life

Few issues in the relatively short history of Sun City Anthem have generated as much interest –and controversy- as the concerns that have swirled around the operation of the restaurant in Anthem Center. Starting with a restaurant managed by developer Del Webb, then followed by the S&D Café tenancy and subsequent litigation, and now with the financially based drama of Tirzo’s Bistro (“the Bistro”), it seems as if there is always something to talk about and debate when it comes to the restaurant.

Coming into the March 25th monthly Board of Directors meeting, the latest drama was whether TNF Holdings, doing business as Tirzo’s Bistro, would meet a Board-mandated deadline of paying its cumulative rent and utilities arrearages by the time the meeting commenced. The Board had previously indicated that payment of the arrearages was a requirement to avoid a likely eviction action, and had further specified that satisfying the existing delinquencies was a prerequisite to even considering a modification of the lease in order to improve the tenant’s chances for viability.

At the March 25th meeting, Board President Jack Troia reported that full payment of the tenant’s past-due rent and utilities, through February 28, had been received. In effect, this cured the tenant’s default under the lease.

Other conditions which must be met by March 31st in order for a lease amendment to be signed are:

• Tirzo’s primary investor must put in the remainder of an original $200,000 commitment, amounting to about $50,000.
• Sales tax amounting to nearly $30,000 must be paid.
• Rent and utilities due for the month of March must be paid.
  

The Board would be voting on an amended lease, Troia said, which would go into effect only if the three conditions listed above are met.

The amended lease terms, effective retroactive to March 1, include the following:

• Monthly rent for the original term of the lease will be $1,000 plus 100% of the utilities.
• The amended lease expires September 30, 2012, with one five-year renewal period, rent and other related charges to be negotiated at renewal.
• The additional monthly rent percentage as provided for in the original lease (Par. 4.02) will be increased by 1% for all categories except for amounts less than $100,000, which will remain at 0%. Editor’s Note: The percentages go up on a sliding scale, starting with 4% for sales of $100,000 to $124,999, which, for example, will increase to 5%.
• If gaming equipment is installed, new monetary lease terms will be negotiated at the time of installation.
• The gaming polling agreement time table will be accelerated to April 1, 2010. The Board will consider gaming polling documents at the April 8 Board meeting. If a request and documents are provided to the Communications Department by April 15, the gaming survey and return envelope will be included as an insert in the mailing of the May issue of the Spirit magazine. All costs related to the gaming polling agreement will be borne by the tenant.
• If requested by the tenant and information is provided to the Communications Department by April 5, up to two pages in the May Spirit will be allocated for the tenant’s use to promote the restaurant and for other business matters; in addition, a future cover of the Spirit will feature Tirzo’s Bistro.
• The tenant will be permitted to close the restaurant for general dining up to five times per year –but not more than three times in a calendar quarter- for catered events. Editor’s Note: Tirzo has reported that he has lost large-scale catering events because the client wanted the ambience of the restaurant and its spectacular views.
• Going forward, the current 10% member discount and any other promotions will be at the tenant’s sole discretion. Editor’s Note: Board President Troia had previously reported that resident discounts had accounted for about $22,000 of the restaurant’s expenses during the first five months of operation, roughly equivalent to the amount of utilities owed for that period.
• Business and operational issues raised by residents and others need to be addressed along with providing potential solutions. These issues include: management of the restaurant and catering operations; food and service inconsistencies; marketing and catering policies.
• Projected financial statements reflecting the potential solutions and the related costs are to be provided.
• The tenant must specify the amount of funding sufficient to implement potential solutions. A letter from the investor must commit to fund solutions and the source of the funds.

Having presented all of the above items, President Troia called for a motion to approve the amended lease. Vice President Roz Berman made the motion to approve, seconded by Secretary Roger Cooper, subject to the following conditions:

1. Receiving proof of payment of unpaid sales taxes.
2. Receiving payment for March rent and utilities.
3. Receiving the requested financial projections.
4. Receiving the required letter from the investor.

Following introduction of the motion, various Board members commented on the matter.
Carl Weinstein acknowledged that the tenant had cured his lease default by paying the monies due through February. He commented on past problems involving what he termed uneven food quality, service, and particularly catering, saying he has had “a tough time” weighing those issues. He expressed reservations about how the tenant would perform in the future, but indicted he would support the amended lease based on his current thinking.

Ann Small asked if the financial concessions to be made in the amended lease would cause dues to be raised. President Troia replied that the shortfall for this year might be in the range of $60,000, but because this would be substantially offset by savings of about $50,000 in the renewed RMI management contract, it should have no impact on dues.

Treasurer Dan Forgeron said there have been recent improvements in restaurant revenues, and that these should continue, raising the possibility of added SCA revenues if and when the restaurant has monthly grosses that lead to revenue sharing.

John Waterhouse said the community has mostly approached the issue from an emotional standpoint. He thanked residents for their considerable input and noted that there were many different viewpoints expressed.

Secretary Roger Cooper reiterated that the tenant must meet his additional requirements over the next five days.

Ann Small said residents can go wherever they want to eat, in effect voting with their pocketbooks.

Carl Weinstein said his main concern was over the money, adding that good-quality catering is important.

Dan Forgeron said the tenant must also keep current on his payroll taxes, noting he has verified that this is being done.

At this point, the vote was called and the Board voted unanimously to approve the amended lease, subject to the stated conditions.

The Board then voted unanimously to approve the amendment to the polling agreement on gaming. Dan Forgeron pointed out that this procedure does not assure that gaming would be assured. Carl Weinstein added that based on comments he has received and conversations he has held, he believes more people are viewing the question of gaming favorably than they did when an earlier survey was taken.

If you are interested in hearing the entire 24-minute Board discussion and vote, click on the bar below.

Mar 25 2010 BOD Vote on Bistro

 

by David Berman, 26 March 2010