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Nov 9, 2010 5:46 PMPublication: The East Hampton Press

Town Finds No Takers for Poxabogue Restaurant

Nov 9, 2010 5:46 PM

Southampton Town received no bids from any restaurant operators seeking to take over the restaurant at the Poxabogue Golf Center in Sagaponack.

Several restaurant or food vendor companies responded to the request for proposals from the town, which went out in September, but none submitted a bid by the October 27 deadline.

On Tuesday, the Southampton Town Board voted to seek new bids on the restaurant operation, but remove a stipulation that set a minimum amount for a monthly payment, agreeing to allow that to be negotiated as part of the bid process.

After learning no bids were received in the first round, Southampton Town Councilwoman Nancy Graboski had said the Town Board would have to take a look at the stipulations of the lease that were offered by the town and possibly make some substantial changes before putting out a new bid request.

“Certainly, something is wrong that no bids were received—I don’t know what it is,” she said. “There may not have been a party that thinks it can work without having something during the dinner hour.”

One of the stipulations in the lease was that the restaurant cannot be open after 6 p.m. The lease also had put the rent for the space at $7,500 per month, or 10 percent of the month’s gross sales, whichever is higher.

In the new bid request, approved Tuesday, the $7,500 minimum rent was removed from the stipulations, though the optional fee of 10 percent of the month’s gross sales will remain, so that, during the busy summer months, the town can likely collect a higher rent.

The building, which is in Southampton Town, is owned jointly by the towns of Southampton and East Hampton, who purchased it for $6 million in 2003 to save it from residential development plans by its owners. Southampton oversees the lease agreements for the driving range and golf course operation, in addition to the restaurant.

Among those restaurant operators who showed interest but ultimately balked at taking over the once popular cafe were former longtime operator Danny Murray and Michael Avella, owner of Love Lane Kitchen in Mattituck, who at one time had been slated to take over the operation after Mr. Murray’s departure.

According to Southampton Town Clerk Sundy Schermeyer, a half dozen restaurant companies downloaded the lease agreements from the town website or picked up applications at Town Hall—in addition to several construction companies that apparently picked up the bid request erroneously. Along with Mr. Murray and Mr. Avella, East End Food Corporation of Wainscott, Custom Caterers of Greenport, New Way Concessionaires of New Jersey and Long Island Golf Management, the company that operates the golf course and driving range at Poxabogue, picked up the lease bid request package.

Mr. Murray closed the Fairway Restaurant after 20 years in the small cafe space attached to the golf course pro shop after he couldn’t reach an agreement on a new lease with the course’s manager, Ed Wankel, owner of Long Island Golf Management.

The building underwent an extensive renovation over the summer, paid for by the towns, to address mold in the basement and part of the restaurant space, discovered after Mr. Murray’s restaurant moved out, and repair the building’s roof.

Shortly after the lease negotiations with Mr. Murray fell through, Mr. Wankel announced he had an agreement with Mr. Avella to take over the cafe. But Mr. Avella also pulled out after the mold was discovered and the town decided that the restaurant could not stay open for dinner. Mr. Murray’s restaurant had served breakfast and lunch until 4 p.m.

Shortly after Mr. Avella pulled out, the town modified its management agreement with Mr. Wankel, giving control of the restaurant lease back to the Town Board.

Mr. Murray, who now operates the cafe at Montauk Downs Golf Course, said after the first round that the rent the town is demanding for the Poxabogue cafe is still too high to be viable for a restaurant owner to operate there, and added that he was not surprised that nobody else submitted bids.

“The minimum base rent is a little too expensive for a 34-seat restaurant,” Mr. Murray said, though he would not say what he thought would be a viable rent. “I decided I couldn’t do it, because it just didn’t make financial sense. It has to make sense. I don’t want to put a number on it—I do have a number in mind—but I would be interested if it was low enough.”

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The sad truth is that members of Town Board are not business people and have no clue on how much revenue must be generated to pay what they are asking. Also, stipulating the hours further shows their disconnect to business operations. No wonder the Town is in a financial crises. News Flash- business owners just cant raise revenues the way the Town can raise taxes and fees to make up for poor decisions.
By The Real World (368), southampton on Nov 11, 10 2:03 PM
2 members liked this comment
90K a year in rent!
No wonder no one bid
By Hambone (514), New York on Nov 11, 10 4:13 PM
1 member liked this comment
By PBR (4956), Southampton on Nov 11, 10 5:19 PM
I don't know about the restaurant business but just the mention that they are stipulating that the restaurant close at 6:00 PM is unbelievable. The presumption that this proposal would have been vetted by 5 board members and the town attorney is frightful. The town should seriously look to selling these businesses it has no clue how to run. Further, in light of the tax increases they are trying to push through on the citizens, it is time that they sell these restaurants they own all around town. ...more
By V.Tomanoku (790), southampton on Nov 12, 10 11:06 AM
1 member liked this comment
So, Murray was forced out as a result of a short-sighted agreement that the Town made with the lessee of the gold course; now that lessee has failed to honor his agreement; and the original manager (who wanted to continue the restaurant that he had managed for decades), has moved on and is no longer interested.

By highhatsize (4217), East Quogue on Nov 12, 10 12:20 PM
1 member liked this comment
What a shame that we lost Mr. Murray and a great, local and much loved restaurant due to the towns ineptitude and mismanagement of the project.
I hear Dunkin Donuts is looking for a new space in the Hamptons...........
By SisBoomBonacker (106), Hamptons on Nov 12, 10 3:28 PM
1 member liked this comment
The town and its policies have been putting small businesses out of business for a while now. Between the economy and misplaced ideas, numerous businesses have failed.
By Bandguy (23), Sag Harbor on Nov 12, 10 5:25 PM
Come on Anna, you can do better than this!
By PBR (4956), Southampton on Nov 15, 10 6:40 PM
The deal that went down at Poxabogue is a shame. The people involved with making the change may want to look up the definition of "hubris". The Poxabogue Cafe was a well liked and popular breakfast and lunch spot. The public overwhelmingly supported their continued presence there. The government officials new better and pushed out Murray. Are we all better off now? No restaurant, no revenue... Nice job! Too bad the people responsible will never be held responsible. Business as usual.
By Arnold Timer (327), Sag Harbor on Nov 15, 10 8:03 PM
Sorry for the typo above new=knew
By Arnold Timer (327), Sag Harbor on Nov 15, 10 8:07 PM
Believe it or not 7500/mo is cheap for a restaurant space on the east end. That's why few places survive here and food quality is mediocre overall. It's almost cost prohibitive to create a restaurant space where one doesn't exist. Let's hope the old Fairway returns under favorable terms.
By harbor (415), East Hampton on Nov 27, 10 7:08 PM