Lake Worth Beach has approved a new lease for its best-known restaurant, with supporters calling it a good deal, and opponents calling it a rip-off to taxpayers.
The city expects to collect more than $5.5 million in rent from Benny's on the Beach over the course of a decade, between 2033 and 2043, after city commissioners on Sept. 15 unanimously approved a lease extension for the restaurant to operate on the city's William O. Lockhart Municipal Pier for those years.
Benny's pays a lower rent per square foot compared to other beachfront businesses leasing city land. The deal's critics questioned why commissioners felt compelled to vote on a lease renewal when the current term has seven years left.
Opponents also argued that commissioners should
have gotten more money from a lease on the pier, given the possibility that voters statewide may approve a ballot question in November substantially cutting property taxes, cities' main revenue source.
“There’s this whole perception of giving breaks to millionaires," Mayor Betty Resch said.
“For them (Benny's) to be operating under the circumstances that they’re operating on at that pier, which is not an ideal situation to be operating a restaurant on, I applaud the fact that they want that kind of commitment, that they’re willing to make that kind of commitment to the city. So I don’t see anything evil about it.”
Benny's spends more $1 million yearly on insurance and repairs, while risking the business being wiped out by hurricanes, Commissioner Anthony Segrich has said.
Before he voted for the deal, Commissioner Chris McVoy said, "I received numerous calls from experienced restaurant owners who said, 'You need to get the financials from that guy because he is making buckets of money at that location and the city is getting short-changed.' "
Critics call Benny's lease extension premature, keeps rent too low
Former City Commissioner Kim Stokes said in a written statement that the commission did not need to agree to the new lease when the current one expires in 2032.
"Why don't you think a market analysis or financial documents from the tenant are important in determining a fair rate?" Stokes asked commissioners in her statement.
"Give residents something more than your opinion and the word of the tenant. Give us actual evidence so we can look at it ourselves and come to the same conclusion you did. And if you can't do that, you shouldn't be making this decision seven years early."
Benny's rent will rise to nearly $62 per square foot in 2033 from its current rate of just over $50. Total monthly rent will go to nearly $40,000 in 2032 from over $32,000 this year.
Two of three businesses in the beachfront city-owned casino building pay higher rent per square foot than Benny's.
Mamma Mia's on the Beach and Lake Worth Beach Tee Shirt Co. each pay under $57 per square foot, for around $6,300 a month in the spaces they rent that are each more than 1,300 square feet.
Kilwins Ice Cream pays just over $40 per square foot, for a total rent of about $4,500 a month.
All three businesses' leases are up next fall.
Stokes and other residents opposing the deal argued on Sept. 15 that commissioners have a double standard, giving Benny's a deal they said the restaurant wanted while demanding more from another waterfront restaurant on city-owned land.
Opponents wanted to know why Benny's did not have to provide its financial statements while the Beach Club Bar & Grill on the municipal golf course had to show commissioners its financials while negotiating a new lease, as its current one expires in 2027.
Commissioner Anthony Segrich said the city had a services-provider contract with the Beach Club, not a lease, requiring the restaurant to provide financials. He also said the Beach Club had violated parts of the contract.
"They have since agreed to come into compliance with those provisions," Segrich said. "We have instructed staff to negotiate a tenant relationship, specifically a lease agreement, which will treat them very differently than under a service contract.”
Benny's lease has been a source of debate for years. The last time city officials renegotiated the rental contract, in 2023, some residents and commissioners thought it unfair the eatery's rent was lower than other beachside businesses. Benny's owner Lee Lipton and his supporters took out petitions and bought a billboard saying "Save Benny's."
Stokes, a commissioner at the time, opposed the initial lease renewal, saying the proposed rent was too low. She and three of her fellow elected officials eventually agreed to the deal that raised Benny's rent 3.5% annually. McVoy was the sole "no" vote.
Lipton is now the U.S. ambassador to the Philippines. The U.S. Senate confirmed President Donald Trump's nomination on May 19.
Email news tips and ideas to Chris Persaud at cpersaud@pbpost.com.
This article originally appeared on Palm Beach Post: Benny's on the Beach gets lease extension to stay on Lake Worth pier
