Water District takes heat over no-bid lease deal

From: The Fort Worth Business Press
December 2, 2011

A restaurant deal made by the Tarrant Regional Water District has turned up the heat again on the public entity’s policies and 
procedures.

By P.A. Humphrey

After behind-the-scenes negotiations, without public input or competitive bidding, the Tarrant Regional Water District (TRWD) has spent $970,000 of public money to build a restaurant near a popular trail head along the Trinity River. Along the way, the Water District signed a 10-year lease with celebrity chef Tim Love to run it, without a competitive bidding process.

Detailed information about the deal was made public only after requests by the Fort Worth Business Press and the Fort Worth Star-Telegram under the Texas Public Information Act.

Love’s Woodshed restaurant, billed as a “global taqueria,” is located at 3201 Riverfront Drive, which is owned by the water district and is near the Fort Worth Zoo, across from University Park Village shopping center. The water district created the Trinity River Vision Authority (TRVA) as a subdivision of the district.

Instead of paying rent on the building, the Woodshed will pay a percentage of its total sales to the TRVA. According to the lease, the Woodshed would pay the Water District 6 percent on its first $500,000 of sales, 5 percent on the next $500,000 and 4 percent on sales of more than $1,000,001. Love is also responsible for utilities, maintenance and upkeep of the building.

The lease was drafted and approved by Ken Brummett, the water district’s general counsel, but not voted on by the district’s board.

Board member Jim Lane denies there’s anything untoward about the deal.

People say there’s no transparency but there is plenty of transparency,” he said. “Other restaurateurs were contacted and no one had any interest until Tim Love stepped up. I’m sorry other restaurateurs feel, now, that they didn’t get a chance to be part of that. But we’ve been discussing this for a long time.”

Lane said he’s glad the contract went to Love because the chef, who is nationally known thanks to the popularity of 
television cooking shows, can generate interest in Fort Worth.

He’s a world-class chef. Tim knows what he’s doing,” said Lane.

TRVA Executive Director J.D. Granger, who helped search for a tenant for the restaurant, said Love proposed the profit-sharing lease rather than a standard rent agreement because fixed rents often cause problems for open-air, climate-sensitive venues.

One bad season with fixed rents often forces otherwise great restaurants out of business,” Granger said. “For that reason, risk-share, profit-share rents are more sophisticated formulas that provide greater success.”

The TRVA board is unfairly being targeted by critics who question the transparency of the deal, said Granger. The authority’s board had nothing to do with the lease, he said.

It is TRWD property and thus a TRWD lease. As such, this issue was never brought to the TRVA board,” he said. “On the contrary, TRWD discussed the competitive bid construction very openly in board meetings; Tim Love was even discussed openly at such meetings when reporters were 
present.”

Granger said he participated only in helping identify and consider who would make a strong tenant for an outdoor restaurant venue.
“The first paragraph of the lease states to the effect, ‘this is between TRWD and Tim Love,’” he said.

Granger also denied published reports that he was the one who chose Love for the project or that he offered the contract personally.

State law does not require that water districts use competitive bidding, but grumbling from some area restaurant owners began soon after Love announced, earlier this year, that he was opening his riverside restaurant.

Shannon Wynne, CEO of Dallas-based 8.0 Management, which has three restaurants in Fort Worth – Flying Saucer, Flying Fish and 8.0 –said he would have jumped at the chance to take on the trailhead restaurant location. His downtown restaurant, 8.0, has the open-air, outdoor dining concept that the Woodshed will have and that water district officials say they were looking for.

Wynne and other Fort Worth restaurant entrepreneurs say they would have been interested in operating the restaurant but didn’t know about the possibility until the deal was done. Love got a “plum deal” with the no-rent contract that will leave the water district holding the bag if the restaurant doesn’t make money, they said.

Water District officials disagree. The lease agreement was “negotiated within terms standard to the industry for a current market restaurant lease in the city of Fort Worth,” said Steve Christian, the water district’s real property director, answering a letter from the Business Press inquiring about the deal.

The heralded September grand opening for the Woodshed was delayed while Love and the city worked out a code issue, said David Hall, Fort Worth’s assistant director of planning and development. The size of the restaurant’s interior dining area required ceiling sprinklers under city code, but Love agreed to shrinking the size of the dining area so that sprinklers are not required. The Woodshed is expected to open in the next few weeks.

Love is reportedly planning an event for Dec. 17 that would see customers going back and forth between the Woodshed and his nearby burger place, the Love Shack.

The behind-the-scenes negotiations with Love and the terms of the lease, not to mention the lack of competitive bidding, aren’t doing much to change critics’ views that the water district is more interested in creating an economic windfall for downtown developers via the TRV than it is in doing its real job of finding new sources of water for a rapidly growing population, preserving current resources and managing flood control projects, says Clyde Picht, a former city councilman who ran for the water board opposing the Trinity River Vision plan.

He said that building a restaurant for a celebrity chef is the same kind of thinking as that behind building an ultra-expensive Tarrant County College campus along the river downtown.

Layla Caraway, who got involved in water district affairs after her Haltom City home flooded a few years ago, co-produced Up a Creek, an award-winning documentary based on her experience and those of her neighbors. Most of the people interviewed in the film, and Caraway herself, are active in the Trinity River Improvements Partnership (TRIP), which advocates an alternative plan that would widen the river channel near downtown for about $60 million.

The Water Districts are above the law when it comes to no bid contracts,” Caraway said.

Lane said every change that has helped the city grow and prosper has had its critics.

They said the same thing about the bomber plant (now Lockheed) and when Alliance Airport was going in up there … it wasn’t going to work, it was a boondoggle,” he said. He noted that downtown Fort Worth was almost dead before the development of Sundance Square kicked off growth that turned it into a vibrant urban center.

It took a bold vision to bring people back downtown and it takes bold leadership to do what needs to be done to keep Fort Worth moving forward,” Lane said. “We just have to take the criticism and move on.”

It takes leadership to build a city and keep it growing, and criticism is part of the package, Lane said.

If you don’t think the river is important, the whole concept of using the Trinity, just drive to San Antonio and see what a man-made river can do for a city. The Trinity River is the reason Ripley Arnold founded Fort Worth here in the first place,” he said. “Sit and watch. This’ll be a big success and a big money maker for the Regional Water District and then everyone will say it’s a great thing for Fort Worth.”

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