City has no answers for 8 months of missed Atlantic Seafood payments

Neither the Fernandina Beach city manager nor the comptroller could provide the city commission Tuesday with an explanation of why the leaseholder of Atlantic Seafood went eight months without paying rent, running up a debt of more than $15,000 to the city.

Commissioner Genece Minshew asked both Comptroller Susan Carless and City Manager Sarah Campbell about the city's ability to track and collect rent from Atlantic Seafood.

Minshew came away with little new information.

"Why didn't we collect rent from them for almost a year?" Minshew asked Carless during the comptroller's report to the commission.

"I can't answer that," Carless said.

"Why not?" Minshew said.

"I've been here two months (as comptroller). I was working in IT. I'm happy to research it and get you the information," Carless said.

Administrative mistakes by the city,  combined with the inattention of business owner Ernie Saltmarsh, led to Atlantic Seafood missing eight months of rent payments totaling more than $15,000.

The missed payments led City Manager Campbell to issue a demand letter to  Saltmarsh on Monday.

Atlantic Seafood, the storied fish market on city-owned property, failed to pay rent for those eight months and mounted a debt of $15,526.27, according to city records.

Minshew asked again about the "Saltmarsh issue and what was being done to close the gap" when Campbell gave the city manager's report to the commission.

Campbell said she became aware of the Atlantic Seafood rent situation by email on Feb. 5.

"The invoicing comes from the marina (operators), the marina does the billing on that particular lease. I'm not sure why,  so that is something we may want to change so there is less of a gap in what the finance department knows about," Campbell told Minshew.  "As soon as Mr. Saltmarsh was notified, he came in the next day and made a $12,000 payment."

Campbell said there was still an outstanding balance and after consulting with the city's interim city attorney, issued the demand letter.

Campbell said Saltmarsh has 10 days to comply under the lease agreement.

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.

"You have an accounts receivable? You know who should be sending you rent payments every month?" Minshew asked.

"I believe so," Campbell answered. "I don't have an answer to that."

Minshew shot back, "We would hope so."

Saltmarsh took the blame for missing the payments.

"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."

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.

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 any of the missed payments until now.