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First, there was Wawa. Then, there was Greco. Now there is Burger Bob’s. On more than one occasion, residents have been told these were one-off cases and that there are no other deals being done behind the scenes, Gables Insider has found that is not the case.
At the Commission meeting on July 13th, we heard a very somber tone by the Commission as they sought ways of providing more time to Burger Bob’s and its owner Bob Maguire, which City staff had instructed to shut its doors by July 31st. The Commission voted to extend Bob’s lease through the end of the calendar year.
At the meeting, we heard from City staff that a new tenant was being sought through a Request For Proposal (RFP) process. What they failed to mention was that they have already negotiated an agreement with a new tenant.
So what is the point of an RFP now? The fact is, the RFP is being used by staff to attempt to fix their negotiations with a potential suitor outside of the legal process laid out under the City’s charter, which requires a formal bid process.
Burger Bob’s has been under contract with the City for over 27 years. The current contract was a three year lease signed in 2018 with a possible one-year extension to the lease. The lease, as agreed to, was scheduled to end on August 31st of this year.
Bob’s leases since 2003 have been either three year leases with annual extensions or single year leases. The contract stipulates a monthly base rent of $3,048.80, although that has been amended due to financial issues related to COVID-19.
The City also required approval of the menu. “Tenant shall not make significant changes to the menu without Landlord’s prior consent.”
The extension option required notification by the tenant at least 12 months from the end of the lease. That time-frame was in the middle of the COVID-19 pandemic. An extension was never filed.
On February 23rd of 2021, City Manager Peter Iglesias was sent an unsolicited bid for Burger Bob’s by Rodney Barreto, President and CEO of the Barreto Group along with a PowerPoint presentation on their proposal.
To be clear, Mr. Barreto and the Barreto Group did nothing wrong and have done nothing wrong. Unsolicited bids are common in the industry. Barreto Hospitality has worked on numerous great projects in the City including Red Fish at Matheson Hammock and most recently Forte on Miracle Mile.
The question is on staff’s actions and responses following the unsolicited bid.
City Manager Gets Staff Working On The Terms
Upon receiving the bid, the City Manager’s office sent it over to the Director of the Community Recreation Department, Fred Couceyro, by email with the message: “As per the Manager, please see attached proposal from Barreto Hospitality for your review and comments. Thank you.”
The email is followed up with instructions for a meeting between the City Manager, Director Couceyro, Assistant City Manager Ed Santamaria and the City’s Assets Manager, Zeida Sardinas.
Following said meeting in early March, Asset Manager Sardinas instructed Barreto Hospitality to prepare a Letter of Intent (LOI) with the proposed terms of the deal.
Barreto submitted this first Letter of Intent on March 9th. The terms: a 20-year lease with two five-year renewal options at a monthly minimum rent of $5,000 a month plus a 3% of gross sales. Barreto would invest approximately $800,000 in renovations to the space. They would also not begin paying rent to the City for 24 months after the opening of the restaurant, in other words, no rent for the renovation period plus 24 months.
Staff Begins Negotiation An Agreement
On March 26th, Asset Manager Sardinas returned a copy of the LOI to Barreto with comments on the necessary changes. “Please see attached response to the Unsolicited Bid for Restaurant Lease of City-owned Property at 2001 Granada Blvd. for your review.”
In said response, Sardinas proposes a 15-year lease with three five-year renewal options. The City accepts the 24-month rent free, but from the moment the lease commences. A loss of at least $120,000 in rent for the City.
On April 5th, the terms proposed by Sardinas are accepted by Barreto, and with minor changes and a final LOI was submitted by Barreto with the general framework for the lease deal on April 17th.
Although the City limited Maguire’s menu, the agreement with Barreto does not require the City’s approval of the new venture’s menu.
A Lease Agreement Is Drafted
Following the final LOI from Barreto, Asset Manager Sardinas sends an email to Vivian de las Cuevas and Tomas Castellanos, outside counsel for the City at Holland & Knight on April 19th, with instructions to draft a lease agreement. “Please see attached LOI for the city-owned property at 2001 Granada Blvd. As previously discussed, we would like to request that you prepare a draft of a Lease Agreement according to the terms in the LOI. Let me know if we can set up time to discuss.”
Barreto told Gables Insider no such lease agreement was ever signed or received by him. He explains that the City reached out to inform him that the contract would have to “do a public process” at which time he withdrew his proposal and will be submitting an updated proposal prior to the August 23rd deadline.
Although Barreto never received it, Gables Insider has received a copy of the drafted 34-page lease agreement.
The Greco Effect
Sources inform Gables Insider, the process of the Bob’s deal was stopped following this publication’s investigation of the 350 Greco Avenue deal, which “sent staff scrambling.”
Prior to the first official meeting of the new Commission on May 13th, Gables Insider began asking questions about the backroom deal that had been worked out to sell the City-owned parking lot at 350 Greco Avenue to former Vice Mayor Frank Quesada and his business partner, who are the employers of Vice Mayor Michael Mena.
That deal, much like this deal, had not gone through the proper channels and had many unanswered questions as staff omitted key details when presenting to City Boards and residents.
Discussion on placing that deal on hold to follow the charter and go to an RFP began at the June 8th City Commission meeting.
Timing Of An RFP
In what could be coincidence or a matter of protecting staff, on June 23rd, the City published an RFP for Burger Bob’s. The move came four months to the day when the City received the unsolicited bid and began its negotiations with Barreto Hospitality and two months after there was an agreement of terms with Barreto.
What has become common place in municipal RFP writing, the language of the RFP has seemingly been created to limit the proposals submitted and ensure that the Barreto Hospitality bid is the only that qualifies.
The RFP dated June 23rd states, “the City is interested in a chef-driven restaurant concept. The ideal operators should be experienced restauranteurs with direct involvement in the ownership or day-to-day operations of restaurants who must also have had a leading role in the design of restaurant build-out project(s) of similar size, complexity, and/or constraints.”
Barreto Hospitality’s unsolicited bid submitted four months earlier on February 23rd states: “Barreto Hospitality is a diversified food and entertainment company that partners with the finest Chefs and event professionals to bring incredible venues to life. The Company has interests in several restaurants and venues,” proceeding to list their restaurants. The proposal continues, “At Barreto Hospitality, we take iconic properties and help them once again realize their full potential. Part of our formula is sparing no expense on first-class renovations.” Seemingly ticking all the boxes the City has set forth in the post-agreement RFP.
What Of Other RFPs?
At the July 13th Commission meeting, Commissioner Kirk Menendez made a compelling request of members of the community for assistance to Rita Tennyson, longtime team member at Burger Bob’s who has announced her intent to submit a proposal of her own.
However, with an agreement in place, is this just a theatrical procedure?
The RFP process is open until August 23rd.
Public Relations Games Over Facts
On July 11th, the Miami Herald‘s Bea Hines wrote an article in the Neighbors section about the upcoming end of Burger Bob’s. Internally, staff began scrambling.
An email was circulated with a copy of Hines’ article from the City’s Communications Director Martha Pantin to the City Commission, City Manager, Assistant City Manager, City Clerk, Director Couceyro, Asset Manager Sardinas and City Attorney Miriam Ramos. “Wanted to share the attached story that was published in today’s Herald Neighbors regarding Burger Bob’s. This is an opinion piece for which we were never contacted. I will be reaching out to the author Ms. Hines.”
And indeed, an email was sent to Hines.
The lengthy email places the blame for the City seeking an RFP on Burger Bob’s owner, Bob Maguire. It cites numerous instances where the City has accommodated Maguire and how the City has gone out of its way to assist Maguire including its deferment of payments due to COVID-19 closures.
However, the email fails to mention one basic fact, the City already has a deal in place.
Instead, the email explains the following: “As per Division 12 of the Procurement Code of the City of Coral Gables, on June 23, 2021, the City advertised that this space is available for lease and any interested prospective tenant, including Mr. Maguire, may submit proposals for leasing and renovation of the property by Aug. 23, 2021. Our goal is to solicit requests from interested parties to obtain the best possible terms for the City. We look forward to fast tracking the renovation of the restaurant, so it complements and is completed along with the rest of the Pro Shop renovations. Once we receive proposals, our focus will be to negotiate the most favorable terms for the City that will ensure financial benefits and a fully-renovated restaurant that will comply with current building code and ADA requirements.”
This is not the first time Division 12 is mentioned. At the June 8th City Commission meeting, Asset Manager Sardinas spoke on item F-1, the Greco sale, and stated that, “the only sale where there wasn’t waiver language included was the one that was done at the Coral Way property before I arrived at the City, in 2018 or so, where it was advertised on CoStar and LoopNet, which is what I used to post, for example, when we have properties up for sale or for lease, I use that.”
City Attorney Ramos further explained Division 12’s requirements at that meeting, “Division 12 of the Code requires certain things. One of those things is an advertisement in a newspaper for 60 days with very specific requirements as to the font and how big it has to be…the presentation and vote and input of the Budget and Audit Advisory Board, the Property Advisory Board, the Economic Development Board, and any other board that the City deems is appropriate and that’s it.”
However, these steps were not followed in the negotiations for Bob’s, as at this time staff had been negotiating a lease deal for Bob’s without following Division 12.
Under its current configuration, Burger Bob’s has seating for a maximum of 48 people at a maximum of 12 tables with an additional 8 stools at the bar.
Barreto’s proposal will dramatically change the location’s footprint, moving the bulk of patrons outdoors.
Diagrams show 11 tables of 2 inside with 9 bar stools, and 104 seats at 36 outdoor tables. The change to seating for 135 symbolizes an addition of 141% to its seating capacity from the current 56. However, the monthly rent requested by the City is only a 39% increase from what is contracted with Maguire.
Additionally, modern outdoor fixtures would be installed to cover the outdoor seating areas. To make way for these features and outdoor seating, the design calls for the tearing down of the palm trees in front of the building, along with the relocation of the golf carts by removing other gardens in the area. A sidewalk will also be added into the greens to allow for pedestrians to walk around the restaurant.
An issue the City will need to address, is that during peak golfing hours and when events are being held at the Country Club, parking comes at a premium with patrons parking on the green or in front of homes on S. Greenway. The addition of 141% more seats will represent a larger need for parking for patrons of the new Bob’s.
Here is a look at Barreto’s renderings for its proposal.
Barreto Reaches Out To Bob
Gables Insider reached out to Rodney Barreto. He explained that he had met with Bob Maguire in order to incorporate him into their new proposal. Barreto states that he offered to pay off Bob’s current debt to the City, make Bob a greeter at the new restaurant for as long as Bob wants, keep Rita working in the kitchen and, as is seen in the proposal below, to keep the Burger Bob’s name as a way of honoring Bob and his work. Bob did not accept Barreto’s offer.
Barreto’s Other Proposal
Gables Insider has received a copy of Barreto Hospitality’s bid on June 7th, to an additional RFP from the City for a new tenant at the Coral Gables Country Club. The City has reached an agreement with the current tenant to end their engagement in April of 2022, vacating the Country Club as well. They also inquired about the “Biltmore Hotel and Golf Course Lease (or leases)” and the “Granada Golf Course Lease.”