New Restaurant Costs Raleigh Taxpayers a Pretty Penny
Posted January 9, 2008
Updated January 10, 2008
Raleigh, N.C. — 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.