Michaels reopens amid changes

City hires new management, will pay for $1.1M in upgrades

Closed since the end of December, Michaels at Shoreline, the bar, restaurant and banquet space, reopened last week under a new deal between the city of Mountain View and Touchstone Golf, the firm that manages Shoreline Golf Links. Touchstone is taking over the restaurant from its prior owner, and the city will begin a $1.1 million package of repairs and upgrades to the building.

Like the rest of Shoreline Park, Michaels at Shoreline is owned by Mountain View, but the city does not have a hand in the day-to-day operations at the restaurant.

For the last 25 years, the city has leased out the restaurant to Ted and Carol Faravelli, and the couple was supposed to continue running the business through 2021. But city officials say the Faravellis notified them last year that they wanted to retire, and they asked if they could get out of the lease early. Technically, the lease contract didn't permit an early severance, but city officials say they wanted to find a way to make it work.

"We could have held their feet to the fire, and not let them out of the lease," said Dennis Dremman, city real estate manager. "But that's not the way we play."

Through the year, the Faravellis started discussions with Touchstone representatives to see if they were interested in taking over the restaurant. It was described as a natural fit, since Touchstone manages numerous other dining establishments affiliated with golf courses. The company agreed to rehire all 32 employees at the restaurant.

But the deal with Touchstone will be a different arrangement for the city. In taking over the restaurant, Touchstone will manage but not lease the property, which was previously being rented out for about $10,000 a month. Under the new deal, the city will receive all the revenues from running Michaels, but the city will also be on the hook for all the restaurant's expenses. For the next months through June, city officials have budgeted $825,000 to pay the restaurant's labor and upkeep costs.

In return for its management services, Touchstone will be paid $9,000 a month if it meets its financial targets, with additional profit-sharing incentives for higher revenues.

Last year was a rocky time for Michaels in other ways. Nearly a year ago, the restaurant's front doors were destroyed as part of a smash-and-grab theft. Someone reportedly rammed a flatbed truck into the restaurant lobby to steal an ATM. Mountain View police officials could not immediately provide an update on their investigation.

Michaels was able to reopen relatively quickly, but city officials say it took about six months to fully repair the structural damage caused by the burglary. Dremman acknowledged the crime probably caused a hit to the business for the year.

As part of the overhaul to the restaurant, city officials also acknowledged they should repair and upgrade the space in the hopes of attracting more business. These improvements would include new paint, carpet, landscaping and a new bar counter. The city will also be installing new equipment for stereo, internet and lighting, which officials believe will attract more corporate golf events and conferences.

Business at Michaels has already rebounded in one big way -- weddings and corporate events. Since reopening on Jan. 24, the restaurant's banquet space has been fully booked, and it reportedly remains reserved through the end of February, Dremman said.

Touchstone officials laid out a plan to city officials to steadily grow the business at Michaels over the coming years.

"We're very excited to be operating this restaurant for the city of Mountain View," said Steve Janisch, general manager of Shoreline Golf Links. "We have a lot of plans to take this place to the next level."

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7 people like this
Posted by Concerned
a resident of Another Mountain View Neighborhood
on Feb 7, 2019 at 2:21 pm

The building had become dated and run down. Looks like a very cheap redo. Still broken floor tiles and dated furnishings. A missed opportunity! The facility by the lake is so much better maintained.

13 people like this
Posted by Jackie
a resident of North Bayshore
on Feb 7, 2019 at 2:39 pm

So now the City is in the restaurant business.
One more way to push out small business.

13 people like this
Posted by Jackie
a resident of North Bayshore
on Feb 7, 2019 at 2:48 pm

The City receives ALL the income.
The City pays ALL the expenses.
The City pays $9,000 per month to a management company to run their restaurant.
What about other small businesses that do not have the financial clout that the City. ( our taxes)
The City should NOT be in the restaurant business COMPETING with existing small business.

15 people like this
Posted by This is a gross mismanagement
a resident of Another Mountain View Neighborhood
on Feb 7, 2019 at 2:56 pm

MV has officially lost it. Worst negotiation ever. ~$1MM up front?, revenue sharing? Where is Lenny and Jobs Lopez? Turn Michael's into 32 toilets and bring in the RV's, problem solved.

5 people like this
Posted by MV Renter
a resident of Shoreline West
on Feb 7, 2019 at 2:58 pm

I'm delighted that the restaurant employees still have jobs. They're a great bunch.

Seems to me the continuance of a small business when the owners/propietors got out of it. About as similar to the Hobee's situation as could be, even with the city's "interference". I highly doubt the 32 restaurant employees could have pooled the funds to acquire the business from the former owners; so for some reason the assertion that the city is pinching the small businesses with this particular move doesn't ring with me.

In this case, anyway.

8 people like this
Posted by Victor
a resident of North Bayshore
on Feb 7, 2019 at 3:51 pm

$825,000 to pay labor and “ upkeep costs” .$164,000 per month.
This covers the next 5/6 months.
Perfect example why the City should not be in business.
No other restaurant would survive with these costs unless they had the City’s checkbook.

9 people like this
Posted by resident
a resident of Old Mountain View
on Feb 7, 2019 at 4:08 pm

Will the menu and prices be similar? This was always a great family-friendly place for lunch while visiting the park. I'd hate to see it go up-scale and kick out all the families.

9 people like this
Posted by MV Renter
a resident of Shoreline West
on Feb 7, 2019 at 4:15 pm


And seniors. I noted quite a few seniors having lunch there.

7 people like this
Posted by kgirl
a resident of Rex Manor
on Feb 7, 2019 at 6:34 pm

Ok, so one of the elephants in the room on this is Google. Prior to Google taking over almost all of the office space up in the Bayshore area there were other businesses to patronize and have lunch at Michaels. I have eaten here for over 20 years and I have noticed the decline in lunch business. Google should provide vouchers to employees to go out to lunch and patronize local businesses. I am not anti-Google by the way but I do think the free lunches there have significantly hurt restaurants in the area. There has to be a better balance.

11 people like this
Posted by Michael
a resident of Another Mountain View Neighborhood
on Feb 7, 2019 at 8:27 pm

I had to read the article a few times because I couldn’t believe the City would agree a deal like this.
Q.1 since previous tenant broke their lease will they be penalized?They would owe about $240,000.00 in rents up to 2021.
Q.2 Has previous tenant been “ paid off” for fixtures & fittings?
Touchstone will be handed a newly remodeled restaurant , paid for by taxpayers, at no cost to them.
Touchstone will get $9000.00 per month with additional profit sharing
to operate the business.
Why does the City not put the restaurant up for lease at market rate?
Remodel if necessary but charge appropriate rent.
How many years/ decades will it take to recoup taxpayers money from shared profit.?
How in the world can this be fair to existing businesses ?
How can the City possibly be involved in such a sweet deal for Touchstone ?
Who made such a deal?
Has City Council ratified this stupidity?
Full disclosure is a must .

6 people like this
Posted by SC Parent
a resident of Cuesta Park
on Feb 7, 2019 at 8:29 pm

I don't recall seeing any marketing from the City looking for interested vendors to take over the Michael's space. The article makes it sounds like the Faravelli's identified Touchstone and then the City negotiated in a sole source environment with Touchstone. I don't disagree with the need to make improvements, but I can't help but think the City could have negotiated a better deal in a competitive environment. I agree with Dennis Dremman not holding the Faravellis to the strict terms of their lease, but what is the City's justification for this sole source "lease agreement," or whatever it is, that guarantees $100k+ annual to Touchstone on top of a $1.1 million capital investment?

"Touchstone officials laid out a plan to city officials to steadily grow the business at Michaels over the coming years." - Of course they did, the City is picking up the tab for all the expenses and 'investment; in this growth plan. MV Voice - please provide a follow up story in 6-12 months on the change in revenue and profits at Michaels to see if the agreement with Touchstone is achieving its objectives.

What skin does Touchstone have in the game, besides some unnecessary potential profit sharing? "...with additional profit-sharing incentives for higher revenues." MV Voice - what are the profit-sharing incentives? Is it 90-10 in favor or Touchstone? 90-10 in favor of the City? 50-50? What is the payback period the City expects on its $1.1 million capital investment? How does that investment compare to the accrued depreciation on the property? Is it just me, or does $1.1 million seem to be a bit much to pay for "new paint, carpet, landscaping and a new bar counter. The city will also be installing new equipment for stereo, internet and lighting." Can the City provide a basis of estimate for these items? Can we get a MV Voice follow up to see what the City actually spends for these items. I can't see how that can be more than $500k ($10k paint, $20k carpet, $50k landscaping, $20k counter, $50k stereo, $50k internet, $30k lighting = $230k total. I guess quadruple that for contingencies?). I think the City is going to end up kicking in improvements for things other than the items that were listed in this article.

Keep us posted...

2 people like this
Posted by Same old Michaels
a resident of Another Mountain View Neighborhood
on Feb 8, 2019 at 12:08 am

When I heard Michael’s undergoing renovations thought it was long overdue but as far as I can tell very little has changed new carpet and a coat of paint is not a renovation. The place looks essentially the same,still has cracked slate tiles in the hallway that were there years ago. The City has mismanaged this property for years.

6 people like this
Posted by Victor
a resident of Another Mountain View Neighborhood
on Feb 8, 2019 at 10:42 am

The rents due through the current lease would be nearer to $360,000.00
that the City have forgiven.
The City PAID the tenant $88,000.00 for the name and equipment even as they broke their lease.
The City has as recently as 2011 spent huge sums of taxpayers money to update the restaurant.
Now the City will spend $1,1000,000.00 on more upgrades.
The City has allocated $865,000.00 to pay labor and “ updates”
That’s $ 140,000.00 per month to run a restaurant that grossed $150,000.00 per month last year.
What’s going on with this deal?
Who knows who?
Whose scratching whose back?
Anyway you look at it the Farallis walk away in good shape, the taxpayers are screwed.
Whoever agreed this should face huge public scrutiny.

4 people like this
Posted by Victor
a resident of Another Mountain View Neighborhood
on Feb 8, 2019 at 10:47 am

Correction to previous
$1,716,200 GROSS income in 2017 not 2018.
That’s $ 143,915.00 GROSS per month.

11 people like this
Posted by Its fine
a resident of Another Mountain View Neighborhood
on Feb 8, 2019 at 11:17 am

I like going out there on a sunny day. It's quiet, pretty, parking is easy and it's a really nice place to relax a bit. If time allows it's also a great area to walk around some after your meal.

The food is fine. Nothing to rave about, but the main reason for going there is not the food. That said, the food is not bad. If it was the pretty setting could not make up for it, so I always find myself going back now and again.

2 people like this
Posted by MV Renter
a resident of Shoreline West
on Feb 8, 2019 at 1:18 pm


I kind of agree with you in principle; but I don't think we have a right to tell a company wnat benefits it gives to its employees. I would certainly encourage them to issue lunch vouchers to patronize local businesses; but I think it's deangerous to think we could/should compel them to.

Especially if they have some hard-to-beat sweet deal brokered with their caterers (which they probably do). We the taxpayers would probably end up paying for it anyway. We compel them to issue vouchers, they demand more tax breaks, etc etc etc. Nothing is free after all.

But I do wish they would do as you suggest. It'd be much better for our local businesses and our community at large for Google employees to really be part of the city, and develop more sensitivity for the community in which their workplace is situated.

I've thought of it as one of the downsides for corporate campuses for decades now. They become like an isolated state, sitting right within the borders of your community; which really isn't great.

7 people like this
Posted by Google is not part of the City
a resident of Another Mountain View Neighborhood
on Feb 8, 2019 at 3:35 pm

Google is never going to enourage employees to be part of the community. If you noticed, huge numbers of Google Employees are bussed in and out of Mountain View day and night, as if it was a bad neighborhood, they do not want to be part of the Mountain View community. I know that does not apply to everyone, but for the most part, that is true. Many of the Googlers who do live in Mtn View are renters, when they acquire enough wealth they will move to communities like Los Altos because they will not want to live in a city that caters to developers and tech companies rather than its residents. Google will suck up as much Mtn View property and City services as they can, if they get a better offerthey will leave,without looking back.

Like this comment
Posted by PA Resident
a resident of another community
on Feb 8, 2019 at 10:34 pm

I occasionally go there for lunch to meet friends, parking is easy and it is nice to feel away from the hustle and bustle, but I hope they have improved the food.

When it comes down to it, the food is what attracts customers and for me it is so so at best. I enjoy all the pros but the food is not one of them.

Like this comment
Posted by MV Renter
a resident of Shoreline West
on Feb 11, 2019 at 12:11 pm

@Google is not part of the City

I'm afraid it does appear to be as you say, based upon the Google employees who I know. The Mountain View resident Google employees that I know personally are all renters.

But I wish it weren't so.

18 people like this
Posted by Anecdotal Mis-leadings
a resident of Cuesta Park
on Feb 11, 2019 at 12:41 pm

Interesting. As you can see, replying on anecdotal information, and maybe some fertile imaginations, one can be lead in many directions.

Personally I know 12 families where at least one person works at google.
7 own homes, 4 are renting but trying to get into the neighborhood so their kids can remain at the same schools. The other is questioning staying in CA.
I can't speak for more than 6, but those 6 families are VERY involved in school volunteering and community efforts.

People are individuals. They don't suddenly behave differently because they went to work for a particular company.

Like this comment
Posted by realist
a resident of another community
on Feb 12, 2019 at 10:30 am

at the end of the day Google wants employees to work, they get more work out of them by providing free food so that employees do not have to leave campus. Free food is just an evolution of on-site cafeterias that employers have used for a long time to keep employees on campus. Google probably gets an extra 45-60 minutes of work/day from each employee who does not leave campus for lunch.

One could argue that the value of the free food should be taxable income to the employee which might encourage a few workers to go off campus for lunch.

Like this comment
Posted by MV Renter
a resident of Shoreline West
on Feb 12, 2019 at 7:00 pm

@Anecdotal Mis-leadings

I'm glad to know this. I think it's great.

I forgot to disclaim that the Google employees that I know don't have kids (yet).

2 people like this
Posted by Victor
a resident of North Bayshore
on Feb 13, 2019 at 2:38 pm

How did this conversation get away from the fact that the City of Mountain View is now in the restaurant business in direct competition with existing small business?

1 person likes this
Posted by I go for the place
a resident of Another Mountain View Neighborhood
on Feb 13, 2019 at 2:56 pm

I actually go to Michael's for the relaxing park-like atmosphere, not really for the food.
I know the food will be only decent and maybe marginal, but I have a few menu items I like and it's a perfect place to ride your bike to on a sunny day.
It's not perfection, but it's a great option if you're in the mood.

Like this comment
Posted by MV Renter
a resident of Shoreline West
on Feb 14, 2019 at 1:33 pm


I don't know about anyone else, but I guess I just don't see it that way. It's a city park and a city facility, in a low-density area of competition; so I don't see where it is really in competition with small businesses.

That plus the fact that the prior owners just got out of the business (which reminds me a bit of Hobee's), I don't really see it as competition. I see 32 jobs that got saved (again, like Hobee's except that the Hobee's employees were able to afford buying out the owners when they retired).

I wouldn't mind my perspective being corrected, but I honestly don't see it. The closest solution I could have seen in promoting small business was have been to court the Bierhaus proprietor to see if he would take it over; except it would have been a pain to revamp/add to the menu as golfer's breakfast fare is quite different. And he would never had had the foot traffic he had on Castro anyway.

Sorry, but further commenting on this topic has been closed.

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