Neighborhood, Gourmet Donut Shop Seeks Beer and Wine License

I’m currently working on a fun project.

My client, Glazed Donuts, is gourmet, artisan donut shop in Key West, Florida, seeking a Florida Beer & Wine Consumption on Premises License in order to sell mimosas, bellinis, and other wine-based speciality drinks and seasonal craft beer that compliment the flavor profiles of their donuts.  Some may surprised to hear of a donut shop seeking to sell beer and wine, but it can’t be too different than Starbucks doing the same.  And, really, isn’t it just another illustration of the creativity of restauranteurs and their impact on our culture?

Normally, the process of a getting a State of Florida Beer and Wine Consumption on Premises License would be rather simple: you’d merely apply for a license from the State.  But, in this case, there’s a snag.

Glazed Donuts is located within 300 feet of St. Paul’s Episcopal Church, and the City of Key West’s Municipal Code prohibits businesses from selling alcohol within that vicinity.  The City permits, however, property owners and their tenants to apply for a Alcohol Sales Special Exception, which we are seeking.  The Special Exception is seemingly simple, but needs the guiding hand of a good attorney.  It goes like this:

  • Complete an application that describes the intended use of alcohol sales, its impact, and mitigative measures;
  • Seek the consent of the Church;
  • Comply with the City’s “Good Neighbor” Policy (meaning discuss your intentions with your neighbors and seek to resolve any reasonable concerns that they may have);
  • Appear before the City’s Development Review Committee (DRC); and, finally,
  • Appear before the Planning Board, which is the approval authority.  The Planning Board can deny the application, grant the application with some restrictions, or grant the application without restrictions.

Currently, the application is slated to appear before the DRC this Friday and, hopefully, the Planning Board in January, subject to its agenda demands.

The real trick with these administrative procedures is to ensure the client’s long term interests are protected.  For example, right now Glazed Donuts is open 7 am – 3 pm.  But, there may be demand to be open longer in the future.  And, as it expands its wholesale operations, there may be a time where the bakery is operating 24 hours a day.  And, if the shop is making donuts, it only makes business sense to open its doors to any retail customers, including those who may want to have a speciality cocktail with their donut (even if late at night).  So, we’re being careful to pursue a Special Exception that permits Glazed Donuts to expand their operations as they see fit when the time is right, free of unreasonable restrictions.

All in all, this project illustrates the creativity and innovation of the culinary entrepreneur.  I, for one, have never heard of a donut shop selling beer and wine.  But, I’ve also never heard of gourmet donut shop . . . ever!  Though, my wife and I are glad we now have.  (Our waistlines are not as grateful.) Culinary entrepreneurs bring experiences that we otherwise might not have, and I’m proud to serve them as their counsel.

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5 Key Commercial Lease Terms: #3 What is CAM?

 The 5 Key Commercial Lease Terms for Restaurants:

Get “On the Same Page” As Your Landlord, Figuratively and Literally 

What is CAM?

Finding and leasing commercial space has a different set of rules than for residential rental properties.  One golden rule, however, remains true in both cases: thou know and understand the key lease terms and ensure the lease agreement is specific and clear.  In this series, we will analyze the key terms of a commercial lease relationship.  This is the fourth part of a six-part series, examining the key terms in your commercial lease agreement.  Today, we’ll discuss the Common Access Maintenance or CAM.

What is CAM?

Common Access Maintenance, CAM, is a fee for the common, shared areas of a commercial space, such as hallways, public bathrooms, parking, courtyards, roofs, walkways, and so forth.  CAM is calculated one of two ways: (1) a flat, fixed amount or (2) a variable amount, depending on a number of factors.  CAM fees may be paid on a regular basis, such as monthly, quarterly, or annually, or they may be charged periodically when major repairs to the building or entire business/industrial park become necessary.

Danger, Will Robinson!

Most definitions of CAM are vague and over-simplified, giving the landlord flexibility to pass along fees that the tenant may not anticipate.  And, like most things, the parties often overlook this provision of commercial leases until a large CAM fee is forwarded to the tenants.  Moreover, in the case of variable CAM fees, the rates can escalate more quickly than monthly rental rates because of its flexible nature.  Thus, a lease’s attractive price per square foot may be deceptive when the CAM fees later escalate.

Accordingly, it is crucial for a tenant to reach an understanding with the landlord on the meaning of CAM in their particular lease agreement and to clearly record that understanding in the lease agreement, including how often the fees are to be paid and how much they can be increased each year.  Furthermore, I recommend that lease agreements provide for a cap of CAM fees each year to preclude a landlord, eager to make overdue repairs or long-desired renovations, from taking advantage of an unsuspecting tenant.

After the rent payment, CAM is probably the most important consideration in a lease agreement.  Please be sure to use caution and diligence in negotiating this lease term and carefully and accurately record it in the lease agreement.  If you don’t feel comfortable doing so or if you fear being overmatched by your would-be landlord, then I recommend seeking the aid of attorney.

Next up, we discuss insurance coverage.

Cheers!

 

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