Without lease, Tin Fishs future at Lake Calhoun in jeopardy

UPDATE: The Minneapols Park and Recreation Board unaimously approved a new, 3-year contract for Tin Fish, with Tin Fish paying 18 percent of its gross sales to the Park Board. 

Patrons who enjoy eating fish tacos while sitting out over Lake Calhoun in the summer may be in for a surprise if the Minneapolis Park and Recreation Board and eatery Tin Fish can’t come to a new lease agreement soon.

Tin Fish would normally be eligible to open for business on April 15, but the Park Board and the eatery’s owners have not reached a deal as the Park Board is proposing changes to the restaurant’s rent and responsibilities toward improvements to the facility.

Owners Athena and Sheffield Priest say they want desperately to re-open this spring because they love operating at the location, but say the Park Board has prolonged the process by constantly changing its offer.

Tin Fish won the Park Board’s contract for Lake Calhoun in 2004, when it beat out three other food vendors. Over the past eight years, Tin Fish has paid nearly $900,000 to the Park Board on $6.1 million in sales, or about 14.5 percent of its revenue.

Tin Fish’s annual payment to the Park Board has increased since 2004 as the eatery has grown more popular and its contract escalated rent payments to the Board. Last year it paid $169,000, compared to $62,000 in 2004.

At least three Park Board commissioners — Brad Bourn, Bob Fine and Scott Vreeland — want the Priests to pay 15 percent of their gross revenues to the Park Board and reinvest another 5 percent into the building. Plus, those members want the Priests to pay another $68,000 up front for improvements.

That means that if Tin Fish’s revenues remain flat over the 3-year contract, the Priests would pay $243,000 annually through 2015, or $74,000 more than last year.

But the most recent contract required the Priests to pay for $313,000 in upgrades to the building at the northwest corner of the lake, where Lake Street intersects with Knox Avenue. Since they didn’t make the upgrades, the contract does not automatically renew.

Athena Priest, in an interview, said she and her husband have tried to work with the Park Board to spend that money, but the Park Board has dragged its feet. 

The Priests have already invested $131,000 in the building, adding a walk-in cooler, installing new patio furniture, building the bar rail that overlooks the lake in addition to several other upgrades.

Ideally, the couple would like to expand the kitchen so that staff can better serve the long lines that stack up at Tin Fish in the summer. They also have been interested in making improvements to the area surrounding the building, but the Park Board has not been clear with its long-term plans for Lake Calhoun, so neither side wants Tin Fish to invest in a project that will have to be later removed, the Priests said. 

The Priests, on their Facebook page, said the most recent proposal could be too costly for them to stay in business.

“If this higher rent passes the full Board next week, it would reach a level which would make it difficult for us to continue our business. This breaks our hearts. We love working the Tin Fish,” they wrote.

In an interview with the Southwest Journal, Sheffield Priest said he would not say whether or not the couple would accept the Park Board’s latest offer because it has changed so frequently.

“The look of the thing has changed several times,” Sheffield Priest said. “We’re not committing one way or another on (if the current contract passes the Board), because that’s when it’s gut check time for us and that’s a private decision that the two of us make.”

Fine, an at-large commissioner, says the most recent contract proposal represents a rent reduction for the Priests. The previous contract called for an additional 10% of rent to go toward capital improvements — or the $313,000 that the Priests never invested.

“The question is, why should we reduce the rent?” Fine asked at a March 14 Park Board meeting.

He says Tin Fish enjoys one the best locations in the city: On Lake Calhoun and in Uptown, one of the highest rent areas in the Twin Cities.

Fine said the Park Board obtained a profit and loss statement from the Priests. He said he did his own calculations, and, at the meeting, guessed that the Priests were pocketing over $250,000 a year from the venture.

Fine’s statements upset the Priests. They said that the Park Board attorney told their attorney that if the couple didn’t hand over the financial statements, the Park Board would not negotiate the contract. Sheffield Priest said all that paperwork was marked confidential, and did not expect Fine to announce assumptions in public.

“That is 100% conjecture on his part,” Sheffield Priest said. “He is not in the restaurant business. He does not understand restaurant dynamics or financials. He is being inflammatory. He is absolutely making up that number, and we’re not going to comment in any form as to what our salary is, because it’s not material to this negotiation.”

Currently, Bread and Pickle at Lake Harriet pays 12 percent of its gross sales to the Park Board. Sea Salt Eatery at Minnehaha Park pays 12 percent. Neither have requirements for capital improvements, but Park Board consultant Don Siggelkow says both will have to negotiate capital improvement requirements when their current contracts end in 2015 and 2013, respectively.

The Park Board will discuss the contract at 5 p.m. Wednesday night.

A group of neighbors rallied for Tin Fish on Saturday at Lake Calhoun. Neighbor Sarah Sponheim said the group has colleted over 350 names for a petition it will submit to the Park Board on Wednesday.