Administrative mistakes by the city of Fernandina Beach combined with an inattentive business owner led to Atlantic Seafood to missing eight months of rent payments totaling more than $15,000.
The missed payments led City Manager Sarah Campbell to issue a demand letter to Atlantic Seafood and its leaseholder Ernie Saltmarsh on Monday.
Atlantic Seafood, the storied fish market on city-owned property, failed to pay rent for eight months accumulating a debt of $15,526.27, according to city records.
"I take full responsibility for that," Saltmarsh told the Observer. "As soon as I learned of the situation, I issued the city a check for $12,000. I intend to pay the balance in the next several days."
As Atlantic Seafood missed payments month-by-month, the city also failed to notify the seafood market that it was past due on the rent until the amount became so large it raised red flags at city hall.
That's when Campbell issued a “Notice of Lease Default” to leaseholder Saltmarsh, after Atlantic Seafood made a partial payment of $12,000 last week. The payment came only after Saltmarsh received an email from the city regarding the $15,5000 outstanding balance.
"I do not run that business day to day and was not aware it was in arrears. We recognize the importance of timely payments. I don't get into the weeds of the many businesses I run, and it was an oversight," Saltmarsh said. "I should have known when the past due amount became that significant. Again, I take full responsibility."
Despite the partial payment, Campbell’s letter states that Atlantic Seafood still owes $7,282.29 in rent, including the upcoming March payment, which is due on March 3. The letter states that if the remaining balance is not settled, the city may take further action to enforce the lease.
Saltmarsh and Atlantic Seafood, LLC, have held the lease on the city-owned structure since August 2022. Under the terms of the agreement, the lease is considered in default 10 days after written notice from the landlord. However, the city had not previously sent any formal notices regarding the missed payments until now.
“I was made aware of it at my Monday meeting with the city. This whole thing (Atlantic Seafood) has just been ridiculous on so many levels,” said City Commissioner Tim Poynter, expressing frustration over the situation.
Not only did the city administration fail to notify Atlantic Seafood, but also former City Attorney Tammi Bach was left in the dark about the situation.
Bach, who left office in January, stated that she was unaware of the non-payment issue.
“That’s news to me. I had no idea,” Bach said when questioned by the Observer. “I should have been notified in my role as city attorney, especially since we had an interim city manager. That’s certainly something I should have known about.”
Bach noted that she had met with Saltmarsh last October or November but was not informed at the time that Atlantic Seafood was behind on rent payments.
When Saltmarsh assumed the lease in 2022, he pledged to construct a new Atlantic Seafood building that would function as both a restaurant and seafood market. However, as of now, no new plans have been submitted over the past two years for the new structure.
At a Feb. 4 city commission meeting, Poynter inquired about the status of Atlantic Seafood and Saltmarsh’s plans. Campbell reported that she had met with Saltmarsh in December for a “good conversation” but acknowledged that the city might need to revisit the lease agreement, which is set to expire in 2028.
Saltmarsh, who also owns several other local businesses -- including the Green Turtle Tavern, the Florida House Inn, the Ocean Club, and the now-closed Beech Street Grill — said changing city commissions have impacted future plans on a new building design.
The current building is set to be demolished in order to make room for a flood protection wall. Under the lease agreement, Saltmarsh can build a new structure on a parcel just east of the current location.
At issue is the size of the structure the city commission will approve as a replacement.
In 2021, the city commission said only a building that fits the size of the current footprint would be allowed. A new commission elected in 2022, then approved plans for a much larger structure. And now, with a third commission in place, Saltmarsh is not clear on what size building the city will approve.
"As you are well aware, what we have been working on is a different business model that is a better use of space for the community. We have been working on plans that have been tossed around with the city . We hope to have that figured out and agreed upon in the coming months," Saltmarsh said.
The city commission meets today, and city officials will determine the next steps for ensuring that Atlantic Seafood meets its lease obligations, or if further enforcement actions will be necessary.
"This is unacceptable," Poynter said. "The lease says they're in violation 10 days after a missed payment, it was eight months since we got any rent money last week. That's ridiculous no one (in the city) was keeping track of it."
Poynter said the city is investigating software to keep track of numerous city contracts and compliance issues that have gone unnoticed.
"We have to do better with all of these contracts the city is managing," he said. "We hope to have a system in place soon that accomplishes that."
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