After months of negotiations, Fort Pierce has terminated its lease with Crabby’s Dockside Restaurant, clearing the way for the city to seek a new tenant while weighing how to recover hundreds of thousands of dollars in unpaid rent and property taxes.
Crabby’s closed abruptly in February over the unpaid bills. Before ending the lease and pursuing the debt, the city gave the restaurant’s operator, Winking Starfish, an opportunity to find someone willing to take over the agreement.
A prospective operator contacted the city but sought more favorable terms. Commissioner Michael Broderick said the city needed to move forward rather than leave the existing lease in place.
“While I agree that the lease assignment possibility certainly sounded interesting, I did not have a lot of confidence in that,” Broderick said. “However, it was a great exercise to go through. But now that we've gone through it, we need to terminate the lease. Even though we have physically taken the space back, there's still this existing lease document out there that has not been terminated.”
Broderick said the outstanding agreement posed a risk to the city and that securing a new tenant should take priority before officials revisit the unpaid balance.
“Let's secure the new tenant, then come back and revisit this past due funds,” he said. “Because keep in mind that amount is clicking; it's clicking away every month, it's adding up every single month.”
Winking Starfish now owes the city $334,000. Although commissioners agreed to delay legal action while the city assesses the situation, Commissioner Curtis Johnson emphasized that recovering the money remains a priority.
“I'm okay for waiting for that 300, but I'm not going to forget,” Johnson said. “I'm going after that, and I don't want that to come in to play on anything else with nothing else to offset nothing.”
Johnson said the city should pursue the debt because the operator failed to fulfill its contractual obligations.
“They reneged on a stated contract in the state of Florida that I'm going to signal right now that we are going to pursue because they have shortchanged the citizens of Fort Pierce,” he said.
As the city prepares to solicit proposals for a new tenant, Broderick said the next agreement should include stronger financial protections to limit the city's exposure if another operator defaults.
“I want some beefy security requirements,” he said. “I'm going to put a lot of thought into this prior to us and reviewing that RFP information relative to money's posted, some type of personal guarantees, some type of corporate guarantees, something.”
Broderick said the city needs safeguards that could provide recourse if a future tenant fails to meet its obligations.
Commissioner Chris Dzadovsky raised questions about whether a conventional rental arrangement would make the best use of the waterfront property. He suggested the city consider tying its revenue to the restaurant's performance rather than relying solely on rent.
“If we are going to create a lease, do we need to be in the profit share side of things as opposed to just having them pay the city the reasonable square footage cost for waterfront property,” Dzadovsky said. “Do we have the assets available to do the auditing of their books every month as to what's coming in?”
City Manager Richard Chess said a new agreement would combine rent and other payments into a single amount.
The city will also examine its legal options for collecting the outstanding debt. Staff members will review the property to ensure it has clear title before the city enters into a future lease.