Copyright Baltimore Sun
The Annapolis City Council on Monday unanimously passed a lease extension for five years for the operators of Market House that also sets up a process for possible lease renewals through 2053. The lease extension has been met with criticism from opponents who argue that this lease extends too far into the future and that the council acted prematurely in extending the lease. However, members of the council and one of the business owners argued that they needed certainty to better invest in the space. The lease vote took place during the final meeting of the current Annapolis City Council and Mayor Gavin Buckley, as the city prepares for an election Nov. 4. The city-owned Market House on Main Street, home to the Market House restaurant and two sub-leased businesses, is leased to New Market House LLC. The company, which got the lease in 2018, is owned by Michele Bouchard, John Lyon and Jody Danek, who is a business partner in other restaurant ventures with Annapolis Mayor Gavin Buckley. The mayor recused himself from discussions and the vote on the lease renewal, and Ward 3 Alderman Rhonda Pindell Charles was not present at the meeting. The current lease for New Market House LLC expires in July 2033, but the legislation sets up a system to possibly extend the lease through 2053. Every five years after 2033, the lease holder would be able to renew the lease if the city and New Market House LLC agree. Under the passed lease, rent will increase from the current $8,400 a month to $11,000 a month in 2033. The rent will then increase by 10% with the renewals every five years. The legislation will also decrease the required performance rent paid to the city from 2% of annual gross revenue over $1.5 million to 1% of annual gross revenue over $2 million. The lease requires the Market House operators to invest $100,000 into renovations and other improvements from July 2033 to July 2038. Danek, one of the partners for New Market House LLC, told the Capital Gazette on Monday night that the council vote would allow the business operators to feel more certainty when investing in needed building improvements, such us upgrading public bathrooms. “This is allowing us to be able to invest in the future of the building and do some capital improvements that really need to be done,” Danek said. “This allows us to feel comfortable putting that capital improvement and expenditures into the building and knowing that the lease isn’t going to be ripped out from under us in two or three years.” The partner added that the lease would bring the city more revenue from the Market House building than ever before. Critics of the lease renewal have argued that the council is acting too soon to extend a lease that won’t expire for half a decade and that the rent asked of the lease holders is too low for the area. However, council members argued that the current operators have been successful in making a business thrive in the historic space, which other lease holders have failed to do. “It has been a very difficult place to have a business … the others failed,” Ward 4 Alderman Sheila Finlayson said. “Market is the center of downtown, and it is thriving. … We should be doing something to perpetuate it.” Ward 5 Alderman Brooks Schandelmeier emphasized the importance of retaining the current lease holders of Market House because they are a locally owned business that has negotiated in good faith with the city in the past. The alderman said financing timelines matter, which is why the owners needed security in their lease this far out. Multiple members of the council, including Finlayson, also emphasized that the lease holders won a competitive bidding process for the lease. Ward 1 Independent alderman candidate Tom Krieck argued during public testimony that some other members of the council, including his election opponent Huntley, should have recused themselves from the vote for accepting campaign donations from New Market House LLC. The company donated $250 to Huntley’s campaign. Huntley, when asked by the Capital Gazette about his decision to continue to vote on the lease, pointed out the small amount of the donation and that the approval of the lease was unanimous by all voting members. The operators of the restaurant and bar in Market House have been a controversial point in Annapolis politics due to accusations of corruption by the mayor over the city’s selection of his business partner for the lease, not initially paying the city performance rent (the company later paid the city for $25,000 in missed payments), and for late financial reports. Have a news tip? Contact Katharine Wilson at kwilson@baltsun.com.
