MILLSBORO — Big Fish Restaurant Group has proposed significant investments, including an event venue at the Indian River Marina, as part of its contract with the Delaware Department of Natural Resources and Control (DNREC). Big Fish was awarded a 10-year contract with the state for concession services at the marina at the Delaware Seashore State
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The Big Fish Restaurant Group will take over the Indian River Marina bar and restaurant after winning a new 10-year state contract. | PHOTO COURTESY OF DNREC
MILLSBORO — Big Fish Restaurant Group has proposed significant investments, including an event venue at the Indian River Marina, as part of its contract with the Delaware Department of Natural Resources and Control (DNREC).
Big Fish was awarded a 10-year contract with the state for concession services at the marina at the Delaware Seashore State Park earlier this month, signaling the end of Hammerheads Dockside at the location. The announcement came amid a flurry of outcry from Hammerheads fans on social media and criticism directed at DNREC.
“We are incredibly proud of our Indian River Marina and the work that has been put into it over the years. It’s a place where I take our counterparts from other states, and they’re just amazed at what’s been done there over the years,” DNREC Division of Parks and Recreation Director Ray Bivens said.
“The fact that we had two competitive bids is a testament to how strong the location is, and our process,” Bivens added. “The business side of concessions goes a long way to our mission of stewardship of our natural resources.”
Big Fish’s vision
Bid documents and contracts signed between DNREC and Big Fish Restaurant Group give a glimpse of what lies in store for the marina once Big Fish’s contract starts on March 1.
Over the first five years, Big Fish anticipates spending around $1.1 million in capital expenses, which includes furniture, fixtures, equipment, outdoor shading and other items to renovate the restaurant. Stipulations in the contract with Second String LLC, the entity that runs Hammerheads at the marina, remove much of the equipment and decor.
It is anticipated that between $500,000 and $750,000 would be spent in the first year, according to Big Fish’s proposal.
In addition, Big Fish plans on investing $950,000 in an event space to host weddings and other parties over the course of five years. Rough plans include air-conditioned tents that could host up to 200 people, as well as a mobile kitchen facility, pavilion and a stage.
“Developing a space for us to host events is a large part to increase our revenue. We feel the event business is a huge opportunity,” the Big Fish proposal reads.
Big Fish would also offer a breakfast menu at the marina, which is something that DNREC was seeking.
“That is something we always hoped to offer because we do have people coming in early to go out and fish,” Bivens said.
Delivery of the entire menu would be offered within the state park area and campgrounds, with specials on party platters offered for people on boats docked at the marina. Big Fish plans on deploying an app for orders and deliveries.
The contract requires delivery service to start no later than the start of the 2024 season, and any capital improvements must be made before April 2024. All plans for improvements must be filed and approved by the DNREC Division of Parks and Recreation before construction.
Hammerheads’s proposal
Hammerheads, filing its proposal under Second String LLC — which included longstanding partner George Bendler and new partner John Trader — outlined a vision for a year-round operation that would have involved building a major addition to the restaurant.
While the proposal filed with DNREC did not outline expenses for the project, it did call for expanding the current restaurant, with the intent to have permits ready by mid-summer 2023. The goal was an April 2024 target reopening, which may have required closing the restaurant after Labor Day this year.
Conceptual plans would have added a two-story addition and increased the dining space to 200 seats. The first floor would have included a bar, lounge area, acoustic stage, retail area and kitchen, while the second floor was “still a conversation,” according to the bid proposal.
Hammerheads also proposed a delivery program, first starting with a prefixed family style menu in the evening. The goal was to offer delivery seven days a week for all meals.
Finally, Dockside also proposed an outdoor kitchen as a showpiece, with a grill and raw bar. An event space with a small pavilion and hard landscaping was also proposed for wedding events.
In exchange for a 25-year contract, Hammerheads offered a $30,000 annual contract fee as well as to pay 6.5% of gross receipts. However, it also requested to cap the fee at $350,000 per year.
Big Fish offered an annual contract fee of $35,000 and offered to pay 7% of gross receipts if restaurant sales exceeded $2.5 million. In the third and fourth year of the 10-year contract, Big Fish agreed to pay 7% of gross receipts of special events, and to raise it to 10% after five years.
The process
For evaluating bids, DNREC had a panel of five state employees weigh in on the proposals for quality. A separate panel of two state employees evaluated finances, per a formula.
Eighty percent of the total score included quality and diversity of the menu; past performance; the vendor’s action plan; vendor’s financial stability; creativity in planning; and designing and delivering a successful establishment. Revenue paid to the state equated 20% of the total score.
Big Fish scored 390 out of 400, according to DNREC officials Hammerheads scored 357.4.
One major point that set Big Fish apart was that it offered concrete information about renovation expenses and timeline, while Hammerheads did not, said Becky Lovin, chief of business services for the parks division.
“There was no dollar amount associated with it, and one reviewer noted that there was no concrete plan on when it could be done,” she added.
A cap of $350,000 until 2048 despite performance also weighed on the bid performance, according to DNREC officials. If successful for the entire length of the contract, the state would have received $8.7 million over 25 years.
In 2021, Hammerheads’s revenue was more than $1.93 million. The gross receipts proposed in its bid would generate about $125,800 for the state on top of the proposed $30,000 annual fee.
DNREC’s request for proposal (RFP) process for non-professional contracts is 90 days, and Lovin said that the contract was awarded in roughly 60 days: Jan. 31. A formal announcement on awarding the contract was made by DNREC on Feb. 10.
Hammerheads Dockside owner George Bendler took to social media to announce the restaurant would close and Big Fish would apparently take over on Jan. 31. The contract was set to end on Feb. 28, and had no word from the state on negotiations.
DNREC policy is to offer negotiations in the event of two close bids, which Lovin said this bid did not fit the case.
“This was a clear cut, and it’s our responsibility to look out for the best of the state,” she said.
The contract Hammerheads signed with the state in 2013 stated the expiration was February 2023. DNREC did renew the contract for a five-year term in 2018, and noted that no additional renewal terms were remaining.
The original 2013 contract Hammerheads signed has a stipulation that Hammerheads would notify DNREC in writing within six months of expiration of the contract of its intent to continue operations. DRNEC would follow up within five months of the expiration of this contract with its intent to renew, discontinue or re-bid.
This clause applies for any expiration of any contract, and there is no requirement for any repeated notice, according to Lovin and DNREC officials.
DNREC Division of Parks and Recreation sent the notice of contract expiration twice to Bendler and his partner Cohen Sade in an email and mail. One notice was sent on June 8 and another on June 28.
Hammerheads Dockside had been at the Indian River Marina for a decade and invested at least $200,000 in renovations Bendler previously told DBT.
Before the COVID-19 pandemic, Hammerheads had 90 employees, although due to post-COVID labor shortage, that was scaled down to 50 employees.