by Peter Bodley
The Main Street reconstruction project has had a negative impact on business at the Harvest Grill restaurant which is located in the new Bunker Hills Golf Course Clubhouse.
The restaurant opened at the same time as the clubhouse in late June 2011 under a lease agreement with the city of Coon Rapids, which built and owns the clubhouse.
While the restaurant’s wedding business has not been affected by the road work, the other parts of its operation have, according to Coon Rapids City Manager Matt Fulton.
As a result, the Coon Rapids City Council has approved an amended lease agreement with Harvest Grill after first discussing it at a work session before the regular meeting.
The amended lease agreement states that at the time the original lease was signed in September 2010, the Main Street road closures were not known and they have had a “substantial detrimental impact” on the Harvest Grill operations.
Anoka County, using mainly state dollars, is reconstructing Main Street from Crane Street in Coon Rapids to Ulysses Street in Blaine.
When construction began in September 2011, it centered on the Blaine segment, east of University Avenue, but in November 2011, the entire stretch from Avocet Street to Foley Boulevard was shut down to traffic for an overpass to be built at the railroad crossing.
The Main Street/Foley Boulevard intersection is the entrance to both Harvest Grill and the golf course.
This closure is not expected to end until the fall of 2012 and next year the segment from Foley east to University will also be under construction with complete a road closure anticipated from spring to August, according to the Anoka County Highway Department website.
Fulton outlined the key elements of the amendment to mitigate the impact of the road closures on Harvest Grill.
• Language in the original lease relating to original equipment purchased by the city is clarified and reconfirms the responsibility of Harvest Grill to replace and upkeep the equipment.
• The city will purchase Harvest Grill equipment, currently being financed by the restaurant through equipment leases, in the amount of $185,541.12 in two installments – an immediate payment of $100,000 followed by the balance of $85,541.12 at the end of 2012.
• Both the city and Harvest Grill owners Jason and Kim Hines of Pot Luck Catering agree to renegotiate in good faith the long-term lease for the restaurant operations.
“While not stated specifically in the lease agreement, it is expected that a collateralized line of credit will be extended to the Harvest Grill by the city during 2012 with any outstanding balance remaining at the end of 2012 being paid back to the city, with interest, over the balance of the lease term,” Fulton said.
“This will also have a personal guarantee.”
The line of credit can be used for the rent obligation or other expenses, Fulton said.
The cost to the city from the lease amendment will be taken from the clubhouse budget in the city’s facilities construction fund, where money still remain after all the project costs have been paid, he said.
In addition, under the lease amendment, the city will recoup any lost rent and any operation advance funds once the road reconstruction project is completed.
Payments from the line of credit will be refinanced over the lease term at 5 percent, Fulton said.
And the lease amendment also has language that protects the city from any future claims from Harvest Grill regarding damages that might result from the road closure and reconstruction activity, according to Fulton.
“Timing is everything and we have to recognize the financial impact the road closures from the Main Street project are having on Harvest Grill,” Fulton said.
“We want Harvest Grill to be successful as a venue especially in the long term.”
The city is “very pleased” with the Harvest Grill operation to date with its excellent food, commitment and its local following, Fulton said.
According to Hines, none of the funds that will be provided by the city will be used at his other locations, including Plymouth, other than the Coon Rapids Broadway Pizza, from which he took $100,000 for Harvest Grill.
He is committed to the Bunker Hills Clubhouse and the city of Coon Rapids, Hines said.
Hines has not booked any new banquets since the Main Street construction began and lost a booking to Greenhaven in Anoka from a customer who could not easily locate how to get to Harvest Grill, he said.
But Hines said that despite the construction the restaurant has been doing a fairly good business.
Councilmembers encouraged Hines to advertise Harvest Grill more. It is in the best interest of the city to have a successful operation at Bunker Hills, said Councilmember Scott Schulte.
According to Coon Rapids Planning Commission Chairperson Donna Naeve, who lives in the residential area adjacent to the golf course, detour signs for the Main Street reconstruction project are unclear and confusing.
At her request, the city has asked the county to make the detour signs more clear.
A detour map on the Anoka County Highway Department’s Main Street project webpage shows a detour route using Hanson Boulevard north to Bunker Lake Boulevard, then east to Highway 65.
The best way to get to Harvest Grill and the golf course is to take Highway 10 to Foley, then go north, Schulte said.
“That’s the simplest, most direct route,” said Mayor Tim Howe.
Peter Bodley is at [email protected]