The Original 1997 Lease

The City’s lease with Centre Street Restaurant Group (CSRG) said the City would receive 5% of “Gross Revenues” from the lease parcel . “Gross Revenues” meant sales generated from the restaurant and gift shop operations on the parcel. Had this been applied directly, the City would have collected rent based on actual restaurant sales — for example, if sales were $2.5 million in a year, rent due would have been about $125,000.

The Subleases

But CSRG had already signed subleases (with Amelia’s Restaurant Inc. and Front & Centre Inc.) that set fixed rents plus a percentage of those subtenants’ sales  . Instead of paying 5% of restaurant gross to the City, CSRG remitted 5% of what it collected as sublease rent. In effect, the City’s income was tied to the much smaller sublease rent payments, not to the larger gross revenues of the restaurant.

The Numbers in Practice

A 2011 letter from CSRG to the City shows exactly how this worked: CSRG reported collecting $15,218.74/month in rents from its subleases. The City received 5% of that — $760.94/month . Annualized, that’s about $9,000 a year to the City. Compare that to the potential under the original lease language: if Brett’s gross sales were even $2 million that year, the City’s rent should have been $100,000. That gap — tens of thousands of dollars every year — explains why city records always showed “low” rent revenue from Brett’s.

The Effect Over Time

With a 40-year lease term running to December 2025 , even modest annual shortfalls of $75,000–$100,000 add up. Over the life of the lease, the total reduction in rent to the City could be $3–4 million in today’s dollars.

⚖️ Bottom Line

The City wasn’t necessarily “misreporting” its rent — it was simply recording what it actually received under the lease’s structure. Because rent was calculated as 5% of sublease payments instead of 5% of restaurant sales, the City’s share was always much lower than most people would expect from a prime waterfront restaurant.

⚠️ AI Research & Disclosure

This explanation was prepared with the help of AI, reviewing the lease, sublease, and City correspondence you provided. It is for informational purposes only, based on public records, and does not make any allegation of misconduct.