Overview of Fritz & Franz Bierhaus Lease

Pursuant to several requests for information received regarding the history of the Satchmo Blues Bar & Grill Inc. d/b/a Fritz & Franz Bierhaus’ lease agreement with the city, we have reviewed city records and compiled information for your review as follows:

June 24, 1997: The original 60 Merrick Way tenant, Jumpin Java Inc., entered a 10-year, 4-month lease agreement with the city (June 24, 1997 through Oct. 23, 2007).

May 3, 1999: The city filed a default eviction case against Jumpin Java who, as part of their settlement with the city, assigned their lease to Satchmo’s Blues Bar and Grill, Inc. (“Satchmo’s”). In the assignment, Satchmo’s agreed to make the following payments to the city for the remainder of the lease: 

  • $64,124 per year in base rent plus sales and property taxes, and operating expenses.
  • $75,000 for Jumpin Java’s unpaid rent payable over 60 months at $1,250 per month.
  • 5% of gross sales in percentage rent starting in lease year six (6).
  • Please note that the city does not have any permit records that when Satchmo’s assumed the Jumpin Java lease, nor any time thereafter, that Satchmo’s ever made any tenant improvements to the 60 Merrick Way premises.

September 2002: Satchmo's stopped making all required payments to the city.

Dec. 16, 2003: The city filed a case against Satchmo’s and offered a settlement agreement as follows:

  • The city would write off the remaining Jumpin Java unpaid rent (approximately $32,500).
  • The city would accept $50,000 as payment for Satchmo’s base rent for September 2002 to July 2003 (approximately $63,875.79 was due). The city wrote off approximately $13,875.79.
  • A 24-month payment plan at $967.00 per month to cover August to November 2003 unpaid base rent owed ($23,227.56).
  • Up-front payment of December 2003 rent.
  • Satchmo’s Blues Bar and Grill would be allowed to change its “dba” to Fritz & Franz Bierhaus.

Dec. 3, 2004: The city filed legal action and obtained a consent judgment against Satchmo's/Fritz & Franz for failure to pay back rent and back taxes for $104,207.20, through which, the city offered Satchmo’s/Fritz & Franz a 36-month payment plan to pay unpaid rent and back taxes.

Oct. 23, 2007: The city renewed Satchmo’s/Fritz & Franz's lease for an additional ten (10) years (Oct. 24, 2007 to Oct. 23, 2017).

June 10, 2014: In 2014, Satchmo's/Fritz & Franz had not paid the city percentage rent or common area expenses since 2007 and therefore owed the city $173,864.52 in back rent. To resolve the dispute, at the June 10, 2014 City Commission meeting, the City Commission:

  • approved for the city to write off 60% of the balance owed to the city ($104,318.71).
  • gave the tenant a payment plan for the remaining 40% ($69,545.81) to be paid in 48 monthly installments of $1,448.87 per month.
  • approved the current 10-year lease (June 1, 2014 to May 31, 2024).

July 1, 2019: Satchmo’s/Fritz & Franz alleged that city employees and a parking contractor had been using their garbage dumpster, and demanded that the city pay them $37,500 in trash fees. The city settled/paid Satchmo’s/Fritz & Franz $3,782.65 to avoid further dispute.

Nov. 25, 2019: Satchmo’s/Fritz & Franz was using two Garage #6 ramp areas to store a large amount of its special event items without authorization. Satchmo’s/Fritz & Franz's unauthorized use of these areas impeded access to water/fire system pipes, creating potential liability issues and safety hazards within the garage. The city asked Satchmo’s/Fritz & Franz to remove the items within 30 days. Satchmo’s/Fritz & Franz took over a year to comply with this request.

2022: Satchmo’s/Fritz & Franz advertised its business for sale on CoStar/LoopNet for $2,400,000 citing the following:

  • The business owner was retiring and the lease was assumable.
  • The restaurant had high-volume gross over $2,100,000 in 2021, had been consistently profitable over the last 24 years, and 2022 profits were expected to exceed those made in 2021.

Aug. 3, 2023: The city requested that Satchmo’s/Fritz & Franz provide a proposal for lease renewal that would include proposed tenant improvements to address the maintenance deficiencies and the end-of-life equipment/fixtures at the premises.

Sept. 27, 2023: Because the city did not receive a response, the city sent Satchmo’s/Fritz & Franz a letter of non-renewal and advised Satchmo’s/Fritz & Franz that the city would be holding a competitive request for proposal process and that the tenant was welcome to participate in that process.

Oct. 4, 2023: Only after the Sept. 27 non-renewal letter had been sent/emailed, did the city receive an email from Satchmo’s/Fritz & Franz stating that it wanted to renew its lease. Please also note the following:

  • The Oct. 4 email cannot be considered a proposal as it lacks any proposed tenant improvements to address the maintenance deficiencies and the end-of-life equipment/fixtures on the premises.
  • The tenant stated: “I have invested a lot of Money the past two years to upgrade electrical panel, bathrooms, kitchen and dining room and look forward to another 10 years at this location.”
    • The city conducted an extensive permit search of the 60 Merrick Way premises since 1999. Except for exterior electrical signage and temporary special event-related permits, the city does not have any records that Satchmo’s/Fritz & Franz has pulled any permits it cited in the Oct. 4 email for the upgrades to the electrical panel, bathrooms, kitchen and dining room. Please note that any such upgrades would require building, electrical and plumbing permits per the Florida Building Code.
    • In addition, the city conducted third-party commercial property inspections in 2022 and 2023 that documented the maintenance deficiencies, end-of-life equipment and fixtures at the premises. The city has been requesting Satchmo’s/Fritz and Franz address these maintenance deficiencies for over a year. In a thread of recent emails, Satchmo’s/Fritz & Franz’s owner Mr. Neuweg insists that maintenance of end-of-life HVAC equipment is not his responsibility. This has resulted in additional service calls to the city’s HVAC contractor at the city’s expense. The lease clearly states that the tenant is responsible for all interior maintenance.
  • The tenant stated: “I do request to move forward with the same price increase per year as we did the last 24 1/2 years (3%).”
    • The tenant’s current base rent is $35.24 per square foot (approximately $127,500 per year). The current CoStar Analytics Central Business District market rent listed is $51.20 per square foot. It would be fiscally irresponsible for the city to accept a below market rent for the premises that the tenant:
      • advertised revenues at $2.1 million.
      • has existing maintenance deficiencies and end-of-life equipment/fixtures that need to be addressed (pursuant to the maintenance provisions in the tenant’s current lease).
      • has never made any tenant improvements to the space per city permit records.
      • did not offer to make any improvements to the premises.
  • The tenant stated: “I think I have shown to the city that I am a good tenant and in consideration that I have paid the rent payment on time and in the amount of way over $3,300,000.00 (three million three hundred thousand) dollars over the last 24 ½ years!”
    • Over the last 24 years, the tenant has gone as much as seven years without paying its agreed upon rent to the city. The city has also had to write off thousands of dollars in unpaid rent, (the latest write-off was in 2014 for $104,318.71). The city has had to offer payment plans and has also expended thousands of dollars in attorney’s fees to litigate the issues that have arisen from Satchmo’s/Fritz & Franz’s inability to fulfill their financial obligations to the city.

It is important to note that the city has been contacted by realtors within the last few weeks who have reported that Mr. Neuweg was still actively offering/showing prospective buyers the Satchmo’s/Fritz & Franz business as available for sale stating that he will provide an assumable lease.