NORTH TONAWANDA, N.Y. (WKBW) — North Tonawanda has bought out its city-run lease with LumberJack's Patio Grill, opening the door for a new restaurant to take over the River Road location by next summer.
For $350,000, Mayor Austin Tylec told me the city bought out the lease just over ten years into a 25-year agreement.
"Because the owner was looking to retire and actually shift the agreement to another business or entity, that was our opportunity to come in and buy the agreement out," Tylec said.
WATCH: North Tonawanda buys out city lease with LumberJack's Grill, looking for new tenant
Tylec said that losing the restaurant is a short-term expense, but it sets up a better deal for taxpayers.
"The city generated, at most, $45,000 a year [from the property]. When the city constructed this marina, made all these improvements and updates, it was a little over $3 million, so the rate of return was not necessarily in the city’s favor," Tylec said.
Using those numbers, it would have taken the city roughly 66.7 years to make the initial $3 million investment back.
"We really have to start looking at long-term investments and making sure that we are finding revenues outside of just property tax increases," Tylec said. "We could easily generate $150,000-200,000 a year [at this property] and make up the difference of the [$350,000] buyout."
Tylec told me that he doesn’t intend for the building to remain unused for very long. He said roughly a dozen restaurant owners have already reached out about taking over.
There will be a public bidding process in the future, but he does anticipate another restaurant will take LumberJack's place by next summer.
Tylec said the changes do not impact boaters who rent slips from the adjacent marina. They will be grandfathered into any changes.
The owner of LumberJack’s sent this statement Wednesday:
"I submitted a proposal to the City November 1, 2011. At that time, the marina and restaurant were in deplorable condition. It had been vacated and left unattended by the City for over 7 years. The site was occupied by the Niagara River Yacht Club prior to sitting vacant. My recollection is that the City needed an investor inorder to obtain the various grants. I opened the restaurant July 29, 2013. There was a great deal of effort and finances to bring the restaurant to fruition. Especially the deck, which candaleavers over the water; in which I put $500,000 into that effort. As far as the marina is concerned. The City did not complete the marina in a timely manner. Grant money was sought and obtained. The total cost of the renovation was $3,150,350. Of that $308,000 came from the New York State Dormitory Authority, $687,000 from the federal government, $600,00 from Greenway funds, and finally $1,555,000. from the City. The City had an option to obtain more grant money, but were so behind in construction, they elected to take tax payers money to complete the project. I had a 30 year lease. I have elected to retire, and sell the lease back to the City on my own accord."
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