Commercial Record

New lease on old Root Beer Barrel life?

Summer days get hot at the Douglas Root Beer Barrel. But third-year seasonal employee Karley Way, shown here armed with a water bottle, loves working there. (Photo by Scott Sullivan)

By Scott Sullivan
Editor
Whither The Root Beer Barrel? The iconic structure, again busy selling affordable foot-long hotdogs, more treats, games, history and its signature cold, frothy beverage on hot summer days, is again up for lease reconsideration.
Douglas, which owns the rehabbed 17-foot-tall redwood structure and land beneath it on the southwest corner of Ferry and West Center streets, first leased it to longtime local resident and businessman Michael “Mick” White in July 2018.
There were few bidders then to run an outdoor-seating restaurant without water or electricity in a structure abandoned 40 years ago catty-corner where it is now.
The structure, from which on-the-way-to-Saugatuck and Douglas Lake Michigan beach concessions from the 1950s to 1970s, by 2011 had grown decrepit and was slated by then private owners for demolition.
It was rescued by a Saugatuck-Douglas Historical Society (now History Center)-affiliated Friends of the Barrel volunteer group, who dismantled what was left and started seeking a new home for it.
Members raised funds selling stave sponsorships, Barrel t-shirts (this writer bought one of them) and even roller-skating carrying old-fashioned drive-in trays during Saugatuck July 4 parades.
Still-usable staves were stored, sanded and varnished in a local boat restoration warehouse while Friends sought a public space where they could rebuild and place it, ideally still in Douglas. A restoed giant root beer barrel, they felt, had promise as a tourist attraction, but what other uses could be put to it?
For 40 years it had sat unused as a snack shack, even with at one time a miniature golf course outside. Not much room, 150 square feet, inside for a kitchen, even with electricity and water. What fiscal return might be drawn for committing such public space plus maintenance? Time to seek and strike a deal with some venturesome private vendor.
In the meantime, Friends and city worked out a site near the Barrel’s former one, also en route to local public beaches, on the then-unoccupied city lot where it stands now.
Friends tried re-erecting the eccentric structure in 2016 on their own, but hoisting 120 curved redwood staves around circular steel ring supports required calling in contract help, made affordable by a small local professional firm which also found the idea/project fun and challenging.
Douglas joined the Friends kicking in for site landscaping, lighting and signage. The group placed an interpretive sign telling and depicting the barrel’s history on one side, its restoration story on the other, northeast of the structure proper.
White opened for a short season (basically August 2018) to long lines of people hungry for novelty, nostalgia and old-style root beer, foot-long hotdogs and more at the time spare treats.
White — who had owned Sunset Subs in Douglas’s Weathervane Mall from 2000 to 2008 — had experience in what some might call “quirky” but intriguing ventures.
For one summer after Sunset set, facing competition from a new national Subway chain site in the Shell station near I-196 Exit 41, he won Douglas approval for a summer lemonade mobile-food cart near downtown Beery Field, but that venture didn’t come to fruition.
His late-2018 flush of Barrel business prompted White, who by then had invested $12,000 of his own, to keep it open that September and October 2018, weather depending.
When White asked the city late that fall to extend his lease, council demurred, seeking legal counsel on whether public entities are required to bid out such leases. No personal snubs meant, members noted; it’s a matter of showing fiduciary responsibility to citizen taxpayers. It’s their property.
Council in February 2019 extended White’s lease for another year at a $500 nonrefundable rental fee, requiring him to maintain insurance on the premises, empty site trash hourly and conduct the business according to all federal state and local regulations. He was also OK’d to use electrical outlets and water located in and around the site for concessions.
“That year,” White recalls, “was really learning how to run a root beer barrel.” He may have shown enough that two other parties joined him bidding for a 3-year lease Douglas put up in spring 2020.
Others offered possibly higher payments, but more factors — such as proven experience running such an operation at what service level — were part of city considerations. So were nation- and worldwide concerns about a new Covid-19 virus.
White that April was extended the lease for $750 during the 2020 season, $800 for 2021 and $850 for 2022. Per further extension terms then agreed to based upon mutual consent, payments of $900 would be due for 2023 and $950 for 2024. Revenues collected were earmarked for park maintenance.
Robert Kenny, a Chicago municipal law and land-use attorney and ex-Douglas Planning Commission chair, called council’s attention in a June 5 letter this year to due-diligence concerns regarding said re-extension.
“The best way to protect the public trust,” Kenny wrote in part, “is to put out for bid every sale and lease of city property. I want my city council members to seek the highest responsible (emphasis his) bidder for land they are managing for us — the owners by virtue of our being residents.
“The Root Beer Barrel,” he went on, “is a unique property and bids may have a wide range of proposed rental rates and information. When they are in, I want to trust council members have sufficient information to make a well-thought-out decision in determining what constitutes the highest responsible bidder.
“An April 23, 2020 Commercial Record (full disclosure again, by this writer) published after the lease was granted to the current operator referred to a letter from an attorney apparently hired by one of losing bidders who offered to pay a much higher rent.
“That letter indicated that the Barrel electric utility bill, paid by the city, based on then-current electric rates, would amount to $1,205. The first year’s rent was only $750.
“In fact, under the extension provision of the lease, the rent for 2023 is only $900 and for 2024 $950. The extension rents don’t look like they will even cover the city’s electricity bill.
“That article went on to indicate then-market-rate rentals for the 150-square-foot barrel would range between $2,250 to $4,146, not including utilities. After the lease was signed the city then extended water to the site.
“Clearly,” Kenny went on, “the Barrel is not a typical commercial property. But without putting this lease out to bid, how will council know whether rents proposed 3 years ago are still reasonable today?
“To fail to put this issue through a bid process would, in my opinion, not be fulfilling your duty to the residents in your position as protectors of the public trust,” Kenny said.
White told council at its June 6 meeting he was willing to renegotiate lease terms nearer to what the city views as market rates. He added he had about $30,000 of his own money into operating Barrel plus four years of what in summers is literally sweat equity.
“I hope council awards the 2-year extension,” he wrote (full disclosure once more, my edits) “as I believe the requirements and a satisfactory performance have been met. Every summer for the past 4 years I come down to city hall and ask 3 questions. Any comments, concerns, complaints? I have been told no every year.
“I take being the steward of the barrel very seriously and believe it shows in my work,” White went on.
Factors, he said, that might help council in its decision to honor the extension include:
“I have not raised my prices at all since day one,” he said, “although product prices have increased quite a bit. I never wanted it to feel like a tourist trap and wanted prices to reflect on the old feeling of the past of good food with inexpensive prices.
“I could have used a 17-cent hotdog with ketchup and mustard packages outside of the barrel; instead I use a 98- cent all-beef jumbo hotdog.
“I have built this customer base up one person at a time. We see many tourists eating here two to three during their stay as they tell us we are the most affordable place around with good food and drinks.
“My menu has many items that keep our customers coming back, from sundaes to strawberry shortcake to mac and cheese, pulled pork, chicken salad and even a vegetarian brat with, of course, the jumbo all-beef hotdog and root beer on tap.
“I encourage the xouncil to go online and see our reviews are about 98-percent excellent and above …
‘In 2020 Covid hit and we survived that challenge and the 2021 season as well. Now we are in 2022 with a full season feeling normal and ready to use all I have learned to use.
“Running a barrel with no water and passing health inspections is no easy task. One needs to be on their A-Game. After 30 plus years in the restaurant business I feel I am the perfect fit for such a challenging endeavor that shouldn’t just be passed to anyone.
“In 2019, 2020 and 2021 I sanded and varnished the barrel myself with the help of a friend at a cost of $480 in materials and $600 for labor. I pay for the garbage removal at about $600 a season.
“I paid for the fan ventilation that the Friends of Barrel put on the roof in 2019 to the tune of $300. I have paid for all electric upgrades in 2018 as the barrel had only one plug then. I paid for one of the porta-johns last year at $500.
“I gave free floats to Interurban riders when the new bus was introduced in 2021. All EMTs, firefighters and police get a free drink when they buy their meal. I have fed for free all Allegan County Jail Debt Crew inmates when they come to do lawn care, which they appreciate so much. I feed all drivers who deliver items to the barrel for free as companies are having a hard time keeping drivers and it’s my way of showing them how much they are appreciated.
“I pay $500 a year to someone to weed and water all the great plants and flowers we have out there. I pay to keep insurance on the property 12 months of the year
“I have invested approximately $30,000 in this business and it takes a while to recoup that. My prices for the most part rage from $2.95 to $4.95. I have to sell a lot of hotdogs to keep up and make sure I am not in the red. The profit margin in any restaurant is thin.
“At the end of the day I have figured out how to get a health inspection passed with no running water, am taking bathroom breaks in a porta-john and breathing in dust and dirt from a dirt/gravel driveway all day long, working 15 hours inside a hot wooden structure.
“It is the hardest job I have ever had … also the most rewarding, challenging and fun job I have had.
“I do believe if council wants to renegotiate the price I pay for 2023 and 2024 we can do that without putting it up for bid. I am reasonable and understand the price the city came up with in 2020 may be little low …
“I have worked very hard to get the lines long and the barrel on the map as a ‘must stop’ destination. I hope council recognizes what a gem they have as we move forward. At 52 I need to know what and where my life is going to be and hoping it is at the Barrel. If not, I wish you good luck and success,” White said.
Council told city manager Rich LaBombard June 6 it would at least like to get a return on the electric and water invoices for the unit, but did not place lease extension on its agenda for Monday, June 20, its most recent meeting.
He wrote in his last-released weekly manager’s report June 13 a council committee had met to discussion Barrel property options and would present results to the full council in July.

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