Rotten Ralph's bill to stay open in Bradenton Beach: $286,000

But Bradenton Beach gives restaurant owner 30-day reprieve, negotiation time

cschelle@bradenton.comApril 19, 2013 

BRADENTON BEACH -- City commissioners and Bridge Street Pier concessionaire Dave Russell are trying to make the most out of a rotten situation by giving Rotten Ralph's a reprieve.

The two sides will spend the next two weeks determining how much Russell should pay the city of Bradenton Beach in back rent and fees for his restaurant, Rotten Ralph's, located at 200 Bridge St. on the city-owned pier. He has 30 days to come up with the money.

Russell acknowledges owing money but is balking at the latest bill: $286,000.

The amount includes common area maintenance fees and consumer price index rent increases uncollected by the city in five years, said City Attorney Ricinda Perry.

Russell figures he owes $54,000 to $60,000 plus reasonable fees. So the commission consented to have Mayor John Shaughnessy serve as a liaison for negotiations between the city attorney, Russell and his attorney, William Kallis, to figure out how much Russell should pay.

"I just think it's ridiculous," Russell said. "I honestly feel no matter what I do, no matter what hoops I jump through, the minute I do it, I'm going to turn around and am going to be told that doesn't work now, here's the new rules to the game."

If the sides can come to an agreement in two weeks, and if Russell can come up with the money, he has another two weeks to pay, according to the agreement. At the end of 30 days, Russell and the city will negotiate a new lease.

If Russell cannot pay, the city will terminate the lease and close Rotten Ralph's. The termination lease will decide how long Russell has to remove equipment and vacate the space, Perry said.

The city commission voted 4-1 April 4 to terminate Rotten Ralph's lease, but gave him until Thursday to come up with the initial $50,000 or provide paperwork for the city to receive title to his equipment in lieu of rent payments.

Lack of accounting ability

How did Russell's bill skyrocket from $50,000 to $286,000? Part of the problem can be attributed to poor accounting.

"There's an obvious problem when you don't charge somebody for CPI increases for three, or four or five years and go back and say, 'Oh, by the way, you owe us thousands of dollars back in '08, '09,'" Kallis said.

The city attorney agreed saying Bradenton Beach would have a tough case in court trying to collect the money because it inconsistently enforces CPI fee collections. In Russell's case, Perry believes the city can collect $9,800 in CPI charges from this year because the fees started after Russell defaulted.

Commissioner Richard Gatehouse couldn't believe the city's billing flaw.

"If this is the way we do our accounting, we're probably losing a lot of money," Gatehouse said. "We need to bill somebody monthly at whatever rate it is so we get our money on time and not wait five years and then present a bill."

Here is what the city claims Russell owes:

• $184,000 for consumer price index rent increases;

• $83,000 for unpaid common area maintenance fees; and

• $19,000 in late fees.

Russell was paying $8,500 in rent per month but stopped paying in October, Perry said.

"We're not saying we don't owe you," Kallis said. "We owe you something, but in no way do we owe you" $286,000.

The $50,000 figure Russell provided as if he had the money to pay immediately, Perry said, but the numbers changed when eviction was on the horizon.

"When this became much more legal, and much more official, and I could see that an eviction was coming, to me, it was my responsibility to look at the terms of the agreement, which interestingly Mr. Russell brought this forward asking did it include the CAM figures," she said.

Dock repairs fall behind

The dock at the end of Bridge Street Pier remains closed to boaters thanks to Tropical Storm Debby damage, and is keeping Russell from getting more boating customers, his attorney said. Ten months have passed since Debby battered Anna Maria Island so it could be more than a year since the storm for any dock improvements.

"There's nobody in their right minds who would take over the lease now with the prospects of six months of construction on that pier affecting their business and their bottom line," Gatehouse said. "That place is going to stay vacant all summer. I don't know how evicting Mr. Russell will protect taxpayers' interests."

Kallis cited lack of post-hurricane repair by the city as a contributing factor to Russell's business failing. The lease stipulates the city is responsible for repairing damaged property. The city is in a tough spot if the business leaves, providing less revenue to pay for any repairs.

"What do they want us to do, get up and leave?" he said.

Bottom line, the city doesn't have any money from Russell, the mayor said.

"I haven't seen any paperwork," Shaughnessy said. "All I've done is talk. I haven't seen any paperwork where this money is coming from."

Charles Schelle, business reporter, can be reached at 941-745-7095. Follow him on Twitter @ImYourChuck.

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