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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