City looks for new operators to expand Boathouse at Stow Lake

by Thomas K. Pendergast

Despite the popularity of its pink popcorn, the Boathouse at Stow Lake in Golden Gate Park is sinking deeper into disrepair, as the city's Recreation and Park Department seeks a long-term agreement with an operator who is willing to sink a few hundred thousand dollars into saving the aging building.

At a community meeting at the Hall of Flowers on Jan. 12, Nicholas Kinsey, a property manager with the Rec. and Park Department, said the current estimate for fixing up the quaint old wooden building, which houses boats for fun on the lake, a food stand that sells the aforementioned pink popcorn and other treats, plus a bicycle rental business, is between $300,000 and $400,000.

A 15-year agreement with the Stow Lake Boathouse Corporation expired in October 2006. Since then, the tenant has been operating the concession on a month-to-month basis, according to Kinsey.

"The month-to-month status of their lease is not a structure that works very well for either the tenant, nor the City," said Kinsey. "It doesn't encourage them to make capital improvements to the site or to upgrade the facility because they don't have an opportunity to recoup their costs. Some of the maintenance needs that we have for the building are going deferred."

The department has issued requests for proposals several times since 2006 "but on each of those occasions they were not able to select a party to enter into a long-term lease. We are now preparing a request for qualifications to select an operator to operate the boathouse," Kinsey said.

The department's goal is to finally get the concessionaire off the month-to-month agreement and into a multi-year contract that allows them to purchase and maintain a new fleet of rental boats; plus make the necessary building upgrades and other improvements necessary to offer and expanded menu at the site, like an indoor/outdoor cafe at Stow Lake, he said.

"We think this would not only provide an expanded menu but also provide a casual place where park users can come to enjoy a sandwich or a salad or a simple meal. We want to maintain the historic character of the Boathouse, that's first and foremost in our mind as well," he elaborated.

Another goal is to increase revenues to the department, though he said this was the least important part of the venture.

"Really, it is something that we're not prioritizing. We have a $12.4 million budget deficit for fiscal year 2011-2012. The Boathouse, by comparison, brings in $192,000 (annually). So, this is not something that we're going to balance the budget on the backs of the Boathouse."

Bruce McLellan, president of the Stow Lake Boathouse Corporation, said once again he will bid in the next round of proposals.

"I enjoy running it out there," McLellan said. "One of the problems is the uncertainty of not knowing what you're really bidding on. As the incumbent concessionaire, you'd think I would really have a pretty good idea, if I really wanted, what I need to bid so that I'm sure I can get it. The way the Request For Qualifications is written, there are a lot of ambiguities in there so you don't know, as a bidder, exactly what Rec. and Park wants to achieve."

He pointed out that his family has been running the Boathouse for generations.

"My grandfather started it 65 years ago," he said. "We do listen to public comment. It's great that we have public input because I think that it is important to do this. Contrary to what people might believe, I really don't make any money on this. I'm a commercial real estate broker downtown renting high rises to anyone who wants to rent office space. For years, when my kids were younger, they all worked at the Boathouse. It was a great family business. It's a unique niche, I've found. There just aren't that many boat rental companies that rent in an urban place."

McLellan had some words of warning for other business who might be interested in bidding on the place, as far as investing in the repairs and meeting the department's requirements.

"It is going to be daunting for me or for anyone else," he explained. "If you're looking at three or four hundred thousand dollars to fix up the Boathouse, then you're going to buy a couple hundred thousand dollars worth of equipment. Whether other business owners realize it or not, I can tell you that you're going to work for free. So you're going to put six hundred thousand dollars into this. I have to believe that's been part of the problem. There's been an unsuccessful conclusion to these four (previous) bids from a lot of different people. I bid on all of them. The unsuccessful part is that that Boathouse needs a considerable amount of work."

As for expanding the food area, Kinsey said they are looking into the possibility of building a small cafe.

"To create the space for the indoor cafe, we are proposing that the boats be moved to the bottom floor of the Boathouse," Kinsey explained. They are also selecting a bike rental concessionaire and looking to relocate the bike rental business behind the Music Concourse bandshell.

Kinsey said the next step will be convening a selection panel with a broad range of expertise, including a community resident, an expert in historic preservation, and a representative of the city's Office of Small Business, among others.