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A Market House Delay

| December 07, 2010, 12:52 PM | 3 Comments

We had good intentions to live tweet the special City Council meeting last night, but that did not happen. As it turns out, not much happened at City Hall either.

Annapolis Mayor Joshua Cohen was supposed to introduce legislation on the zoning changes requested by Lehr Jackson for the newest iteration of the Market House. Additionally, the lease for the premises was to be revealed as well and presented to the City Council for action.

Yesterday, we were contacted by City Public Information Officer Phill McGowan who advised that contrary to the opinion in this weekend’s column by The Observer, that there was no lack of transparency in the process and quite simply, the information was not finalized and not available. He indicated it was the Mayor’s hope that the negotiations wodl be complete in time for the meeting.

After the meeting, McGowan caught up with us by phone and explained why the Market House issues were not presented including the current stumbling blocks and the tentative time schedule.

The main stumbling block is a termination clause. The parties have reached an agreement “in principle”, and have agreed to a termination clause, but not to the specifics of that clause. In light of the Site Realty debacle, the City wants to make sure that there is an “out” if the deal with Lehr Jackson goes south. The parties are negotiating the terms of that clause, particularly the amount of compensation paid to Lehr Jackson if the City decides to terminate the agreement earlier than contracted. McGowan could not tell us the intended term of the lease so it is unknown if the City is negotiating a 5, 10, or 20 year agreement–or longer.

An additional point which needs to be worked out is profit sharing. While it is expected that the Market House will not earn a profit during the first two years of operation, the City is requiring Lehr Jackson to assume 100% of the risk and will subsequently be responsible for any profit or loss during the first two years. However in year three and beyond, it is expected to be profitable and the City is trying to negotiate a profit share for any profit, while opting out of any liability for any losses. The Mayor has said that the City will not subsidize any operating costs for the Market House for the duration of the lease, excepting the initial costs for the renovations.

McGowan briefly addressed the consulting payments to Lehr Jackson to develop the project and advised that the City does have ownership rights of any products or plans produced should Lehr Jackson or the City terminate the agreement.

Going forward, it is planned that the legislation and lease will be introduced to the Council on December 13, 2010 as a first reader. The second reader and public testimony will take place on December 20, 2010 with a final vote on January 3, 2011. However, with time sensitive legislation, the City has been known to accelerate their votes and move to adopt during a second reader. With Lehr Jackson’s stated start date in January, 2011, the City may indeed fast track this vote if it appears that a delay will result in a delayed opening.

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About the Author - John Frenaye

John is the publisher and editor of Eye On Annapolis. As a resident and business owner in Anne Arundel County for nearly 25 years, he realized that there was something missing in terms of community news–and Eye On Annapolis was born in late spring 2009.

John’s background is in the travel industry as a business owner, industry speaker, and travel writer. In terms of blogging and social media, he cut his teeth with MSNBC.com.

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Comments (3)

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  1. I thought the deal was a 50/50 Public Private Partnership…

    Whaaa!!! Happ’n,d?

    Does Ward One want to run the Markethouse ?

    What do they know about the business of running a Market ?

    I think we have seen where that ends up…

    Leave it to the Pros who don’t work for free.

    FYI — $250 per hour x 40 hours = $10,000 for a week of time a month – it’s the standard rate for success.

    Sign the lease and get this thing open for the Spring.

  2. Alex Pline says:

    I think the city ought to just sell the property, take the one time windfall and be done with it. Let the whiners put up or shut up with their wallets.

  3. Fred Shubbie®™© says:

    Better be careful John , the great Oz looks like he is getting angry and unless you play by his rules he will cut you off ( like Ehrlich did to the Sun)

    Phill McGowan ( The Great Oz) said :

    ” That impression is false, and the feeding of it by this publication is irresponsible.”

    ” it is irresponsible for a media outlet to simply accept and repeat as factual her conspiracy theory that has no basis in truth and has been flatly denied by the two persons involved, Mayor Cohen and Alderman Silverman.”

    This talking head is a thug and not very savvy. How dare he try and silence the alternative press. We are all able minded persons and don’t need his word from on high to direct our truths. These comments by Phil ( in relation to the previous markethouse piece) infuriate me and I ask that he be censured — Now stand up before us Phill as we instruct you in what is and what is NOT responsible !!!!

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