FORT PIERCE — The city of Fort Pierce is providing an update on what led to the closure of Crabby’s Dockside after new information surfaced about property tax billing and missed rent payments.
At a previous commission meeting, City Manager Richard Chess said a billing error caused the city to receive multiple property tax bills at the same time. He later said that was incorrect after reviewing additional information.
“We did receive a letter from the tax collector’s office on Feb. 20 indicating that the bills were submitted to us on time and paid by the city on time. And after speaking with the staff, I found out that we did not bill 23 and 24 until July 25. And then the 25 taxes will be billed in Sept. 25, so I did apologize to the tax collector’s office for the misinformation,” Chess said.
Chess also apologized to the commission for the misinformation, and promised that the situation was being looked into with his staff, who he said provided him with the incorrect information.
Chess outlined a timeline tracing the issue back to September, when the restaurant sent a letter requesting an 18-month rent abatement. He said he asked the tenant to provide financial records, including revenue, expenses, cash flow and a repayment plan before any proposal could move forward.
When that information was received, the city discovered the restaurant had fallen behind on payments. A cure letter was issued, the business closed, and discussions have continued since then.
Chess said communication with the tenant after the closure has stalled when it comes to paying the city back.
“I haven’t heard from them yet on that. So that’s concerning that it’s like radio silence at this stage. So we’re really trying to follow up, see where we can move forward. At this stage, we still have at least, it’s just non-performing at this stage, but we have to get to a place where we move on with the settlement pay,” he said.
Commissioners questioned why they were not informed earlier, particularly after the abatement proposal was submitted. Commissioner Michael Broderick said both the tenant’s missed rent and the city’s handling of tax billing played a role.
“The tenant was in default of their rent to the tune of three months. The real estate tax issue, we own that. That’s our issue. We didn’t bill it properly. We have to take ownership of that. And it should have been a workout scenario with the tenant to say, okay, well, we’ll take installment payments over time to recapture those funds. In this case, obviously, they’re three months in arrears on the rent already. We’re making a demand for real estate taxes to be paid as well. We’re setting them up for failure and there’s no real discussion with the authorities that need to make decisions on most likely the largest rent paying tenant that the city has,” Broderick said.
Chess acknowledged he should improve communication with the commission but defended his decision not to immediately bring the abatement proposal forward.
“And I didn’t say that I was not going to bring it before you, but there’s no way I’m bringing that type of proposal to the commission, with a business mind, knowing that they stiffened us for four months of rent,” Chess said.
Another concern raised by commissioners involves the property’s title and whether other contractual obligations could complicate next steps. Chess said that review is underway.
“When the title work is completed, we’ll bring that back to the dais and we’ll look for direction in terms of looking to recover some of the funds that’s passed through four months or actually looking forward to recoup funds that have to remain on the lease. That’s about $3.1 million,” he said.
The closure creates a budget gap for the city should it remain unfulfilled. The lease, which was set to run through 2040, was expected to generate more than $3 million over its term.
“In the FY 25-26 budget, we have $280,000 budgeted, which represents rent as well as sales, alcohol, food, ice cream sales. And the past due amount from Oct. 26 up until Feb. 26 is $209,394. And that’s comprised of the lease amount and late fees of $77,000, $72,015, property taxes from $23,245 and $25,000 for $132,299.95, and sales tax amounts of $22,” Chess said.
Chess also said the city is conducting a broader review of its rental properties to prevent similar issues in the future, which is something Broderick had asked for previously.
“We’re going to automate the process, but we have started that. And when that summary is complete, I’ll bring that summary of all the leases to you all so you can see exactly what we have. Because we have some instances where we probably have to renew leases and put RFPs out. When that’s compiled, I’ll get that to you. But it’s a major undertaking, Deputy City Manager Johnson is working on that along with our new Deputy City Manager,” he said.
Chess said the Crabby’s matter will return to the commission for regular updates as reimbursement negotiations continue and as the city determines next steps for the waterfront property once the issues are resolved.