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New Restaurant Costs Raleigh Taxpayers a Pretty Penny

Posted January 9, 2008
Updated January 10, 2008

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— Taxpayers have a lot riding on the success of a new upscale restaurant in downtown Raleigh.

"We tried to make that lobby entranceway appear as if you are coming through a vault and entering into the restaurant,” City Manager Russell Allen said.

Allen said the city acted like any landlord when it agreed to rent out the space on Fayetteville Street to the owners of The Mint. It made improvements for its new tenant. Unlike a typical lease agreement, however, taxpayers paid for the improvements outlined.

As part of the deal, the city invested more than $1 million to improve the old bank space inside One Exchange Plaza.

"I don't consider this overly risky, No. 1 because we were very careful with the tenant we have in that building,” Allen said.

The city looked for a high-end restaurant to fill the space in the city-owned building to help revitalize downtown.

"If we didn't think this would be a success, we obviously would not have chosen this location,” Douglas Snyder, general manager of The Mint, said.

Under the lease agreement, the restaurant gets six months rent free. After that, the city will start to recoup its investment.

"A million dollars is a lot. I hope we make our money back as taxpayers," said Christina Hoppe, who owns the Big Easy across the street.

Business on Fayetteville Street has been tough, she said, but an upscale restaurant could help.

"I think it's great that the city recognizes that we need something like that and that they are willing to invest in that," Hoppe said.

The big question many people are asking is, what happens if the restaurant fails? Allen said the contract is the city's guarantee.

The nine-year contract has the restaurant paying $12,000 a month in rent for the first year. There is a slight rent increase in the years that follow.

53 Comments

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  • Joshua Jan 11, 2008

    And in doing a tax search for Raleigh Restaurant Group, either they're not a legal business entity, or this is a start-up, and their only holding. They currently use 219 Fayetteville Street as the business address (for tax purposes), and their taxes are delinquent. If they can't pay a $417.81 tax bill, how do you think they're going to run their business?

  • foetine Jan 10, 2008

    have these people actually run a Four Star establishment? What is their track record? and why isn't their menu on the website?

  • richard2 Jan 10, 2008

    Great way to spend tax money. Can I get some?

  • Squirreling Dervish Jan 10, 2008

    Opened in December 2007 and the website is not working?

  • jrf1957 Jan 10, 2008

    Surely this doesn't surprise anyone! The owner was probably one of Meeker's top campaign contributors.

  • mvnull Jan 10, 2008

    "The nine-year contract has the restaurant paying $12,000 a month in rent for the first year. There is a slight rent increase in the years that follow." And when the restaurant goes under in 5 years, the city is left with what?

    I know I will never go there, but I don't suppose I am the target demographic.

  • Gucci Hippy Piggy Jan 10, 2008

    "Gandalf you dummy I was being sarcastic in this instance. Sarcasm means mode of satirical wit depending for its effect on bitter, caustic, and often ironic language that is usually directed against an individual."

    How can we expect the mayor to be intelligent when people on this forum have to be explained what sarcasm is? Am I the only one who got it? I thought it was funny!

  • The Dude Jan 10, 2008

    Actually, webguy, the city doesn't give a dime to the soup kitchen that is run downtown. It runs on private donations and very limited help from the state because it is in the basement of a church.

  • flashlight Jan 10, 2008

    I think WRAL needs to put the contract between this restaurant and the City on its "Public Records" section.

  • Southern Fried Yankee Jan 10, 2008

    I'm not greedy....I just need $250,000 for a hotdog cart....and a corner to put it on....

    Rest assured they'd be gourmet hotdogs...That way I could charge $12.95 for each one....

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