Cape Charles Town Council Turns Down Restaurant Owner’s Offer for Harbor Property

Submitted Photo – The Cape Charles Watermen’s Memorial in front of the Shanty restaurant by the harbor.

By Stefanie Jackson – In a tough split decision March 21, the Cape Charles town council turned down an offer from a local restaurant owner to purchase the harborfront property on which his business is built, which would have given him the equity he needed to expand the restaurant to meet customer demand.

“Over 20 years, this is the hardest decision I’ve ever made,” Councilman Chris Bannon said before voting against the sale that he believed would not be in the town’s best interest.

In 2012, Jon Dempster, of Cape Charles, took the risk of opening the Shanty restaurant at the town harbor development that was called for in Cape Charles’ harbor plan.

Now the restaurant is so popular that during the summer tourist season there’s a two-hour wait. Building an addition to increase the restaurant’s capacity would help cut that wait time to an hour, Dempster said.

The sale and business expansion would create a “win-win situation” for the restaurant and the town, generating more tax revenue and jobs, Dempster said.

Earlier this month, his company, Hungry Crab LLC, presented an unsolicited offer of $262,000 for the .4-acre portion of the lot on which the Shanty is located, not including the parking lot or watermen’s memorial in front of the restaurant.

The offer was deemed fair market value by W.R. McCain and Associates, of Salisbury, Md., in an independent review.

But Cape Charles citizens who spoke up or wrote in at a March 14 public hearing and the March 21 regular town meeting disagreed.

In an email, David Gay called the $262,000 offer “an insult” and said the Hungry Crab already has a “sweetheart deal” in its lease that costs $500 a month and 1 percent of gross revenues.

Town Manager Larry DiRe recommended the council reject the offer, in part because the majority of public opinions were against it. The town should maintain full control of its harbor during planning of future development at the harbor and the adjacent rail yard, his report continued.

Against DiRe’s recommendation, Councilman Andy Buchholz motioned to permit the sale, seconded by Councilwoman Tammy Holloway. Both council members are also business owners.

Councilman Paul Grossman said it would be in the town’s best interest if the Hungry Crab continued paying rent and property taxes. Buchholz said that position was “short-sighted” and did not consider that the town would get more revenue from meals taxes after the restaurant expansion.

Councilwoman Cela Burge indicated she would support the motion if there were “guardrails” around the deal.

On Burge’s advice, Buchholz amended his motion to give the town first right of refusal of any resale of the land, which could not be resold for more than $262,000, the original offer.

Burge was the third “yes” vote, but three councilmen voted “no”: Bannon, Grossman, and Steve Bennett.

Mayor Smitty Dize said he would have voted “yes” to break the tie, but his vote would not have counted, as a super majority vote of at least 5 to 1 was needed to permit the sale of town-owned property.

Dize said the council was “making a big mistake” by not selling the property and “we need to do due diligence to be in the business of helping businesses.”

In another matter, the council voted unanimously to send a letter to the Virginia Department of Transportation in support of Cape Charles giving up the public right-of-way on a portion of Bayshore Road near the Cape Charles Yacht Center.

Eyre Baldwin, who owns the yacht center and has already purchased the 1.5-acre parcel that contains the right-of-way, wants the road for transporting boats from the yacht center to a repair facility on another of his properties.

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