Raleigh may extend lease of Bolt, its downtown restaurant tenant

Eight years ago, downtown Raleigh was becoming a more lively place, with some nightlife that gave people a reason to stick around after work and visit on weekends.

But its core around Fayetteville Street was struggling to find the same success as areas such as Glenwood South. So Raleigh spent $1 million to renovate its ground-floor property at One Exchange Plaza and lured The Mint, a white-tablecloth eatery that took downtown dining options to a new level.

The Mint is long gone and downtown Raleigh, including the Fayetteville Street corridor, is now home to a wide variety of restaurants, nationally recognized chefs and a nightlife scene that’s so active some residents complain about it being too noisy.

But the city doesn’t appear ready to get out of the restaurant business.

Raleigh leaders are in talks to extend the lease of Bolt Bistro & Bar, which has operated out of the city-owned Fayetteville Street space since 2012. Bolt’s presence there hasn’t been controversial, but some local restaurateurs remain uneasy about the city’s involvement in the local dining scene.

“Government should not be landlords to private, small businesses,” said Ron Hines, co-owner of Cafe Carolina and Bakery, which has a location a block away from Bolt in the Wells Fargo building.

“It could give (the city’s tenant) an economically unfair advantage if they’re giving lower lease rates than everyone else,” Hines said, adding that he doesn’t begrudge Bolt for contracting with the city. “If you can get that deal, good for you. You’re lucky.”

Bolt pays $18.89 per square foot each month – less than the $21.65 per square foot rate The Mint paid before it closed. Average commercial rental rates in downtown Raleigh are in the mid-$20s per square foot, according to Moss Withers, a broker with NAI Carolantic Realty.

The city in 2003 bought the 10-story building at One Exchange Plaza for $8 million because it needed more space for government offices.

The Mint opened in summer 2008 but closed about four years into its 10-year lease. Many believe the restaurant, which the city required to serve food in a “white tablecloth” style, failed because of its expensive menu.

In 2012, after The Mint closed, Raleigh signed Bolt to a 10-year lease and required the new tenant to serve more affordable food, including bistro-style options and tapas.

Now four years in, Bolt is ready to embed itself deeper into the city property.

David Sadeghi, Bolt’s co-owner, recently made the city an extension offer. Sadeghi says he will pay for $100,000 in building renovations if Raleigh extends his lease to 2032, waives nine to 12 months of rent payments and allows Bolt to have greater menu flexibility, according to a May 20 memo published by City Manager Ruffin Hall.

Bolt pays about $14,500 a month for its 9,193-square-foot space.

Sadeghi, who is on vacation out of the country, said in an email that he hopes to change the appearance of Bolt’s outer walls but declined to comment further on other renovation or menu ideas.

Amir Sadeghi, David’s son and owner of Cold off the Press juice bar next to Bolt, said his father wants to install larger, retractable windows that would allow people to see in and out of the restaurant. The goal is to attract more customers now that Raleigh recently remodeled Exchange Plaza, which Bolt faces.

“It’s harder to get people to come in if they can’t see what’s inside,” Amir Sadeghi said. “The end goal is really just to create an open, more inviting and enjoyable space.”

Raleigh staff recommends the City Council extend Bolt’s lease, waive four months of rent in exchange for building renovations and lift all restrictions on Bolt’s menu.

“He’s been a good tenant,” said Jim Greene, Raleigh’s assistant city manager for economic development. “And the restaurant overall has done well.”

It’s unclear whether the City Council will approve a lease extension. A lot has changed for the city since it became a restaurant landlord nearly a decade ago.

Apart from the rejuvenated dining scene, city leaders have also changed their strategy for acquiring office space. City Council members recently endorsed a multiyear plan to sell off many of the city’s downtown properties and consolidate government operations into a new campus on Hargett Street.

Extending Bolt’s lease wouldn’t affect city plans to someday sell One Exchange Plaza, Greene said.

Council members reached for comment said they generally support extending Bolt’s lease and want to see menu changes, but withheld further comment until Bolt and city staff agree on an extension proposal.

“Generally, I don’t think the city should be a landlord,” said council member Bonner Gaylord. “However, we do own the building so I’m OK with a restaurant.”

Gaylord said he thinks the city’s contract with Bolt as it pertains to the menu is “overly restrictive and ambiguous.”

Council member Mary-Ann Baldwin said Bolt’s owner has already spent money upgrading a building he doesn’t own.

Amir Sadeghi estimated that his father and co-owner Adalius Thomas, who played for the Baltimore Ravens and New England Patriots, have spent more than $400,000 on renovations since Bolt opened.

Extending Bolt’s contract “would be the right thing to do considering the investment (Sadeghi) has made in the property,” Baldwin said.

At least one downtown restaurant owner agreed with the city’s approach.

“I would hope that if a struggling downtown business needed help that we would come together as a community and help them,” said Sean Degnan, owner of bu-ku global street food on East Davie Street.

“We have been very fortunate since we opened in 2010 and we wish only the best for the other businesses downtown,” Degnan said. “We have worked as a community to create a destination location for diners in the Triangle, and I wouldn't want to say or do anything to jeopardize that good fortune.”

This story was originally published June 3, 2016 at 3:54 PM with the headline "Raleigh may extend lease of Bolt, its downtown restaurant tenant."