The Annapolis Market House lease controversy
By Michael Phillips
“This deal is just putting lipstick on a pig.”
— Critics of the Market House lease
The 30-Second Take
In its final meeting before Election Day, Annapolis’s all-Democrat City Council pushed through a decades-long lease extension for the city-owned Market House—the 19th-century landmark anchoring City Dock—to New Market House LLC, a company tied to outgoing Mayor Gavin Buckley’s longtime business partner, Jody Danek.
The deal begins in 2033 (after the current lease expires), runs an initial five years, and includes three automatic five-year renewals—potentially locking in tenants until 2053, long after today’s officials are gone.
Base rent rises modestly, but the City’s share of sales is cut in half, and tenants can erase those payments with $100,000-per-term “improvement credits.”
No rebid. No competition. No dissent.
Why the Rush?
October 27, 2025 — The final meeting of Annapolis’s “Gang of 9,” an all-Democratic City Council known for near-total unanimity.
With Mayor Buckley recused and one alderman absent, the remaining members voted 7–0 to pass Ordinance O-33-25 — what critics call a “lame-duck lock-in.”
The lease doesn’t even start until July 2033, but the council approved it eight years early—binding future administrations for up to a quarter-century.
View Ordinance O-33-25 on the Legistar.
The Lease at a Glance
| Lease Element | Current (to 2033) | New Deal (starts 2033) | What it means |
| Base rent | $8,464/mo (~$19/sf) | $11,000/mo (+10% every 5 years) | Small bump below market value |
| Performance rent | 2% of gross over $1.5M | 1% of sales over $2.0 M + $100 K credit per term | Rate cut + higher threshold = deeper loss |
| Subleasing | Allowed | Unlimited; City receives no share of profit | Tenant pockets the spread |
| Term | Through 2033 | 5 yrs + 3×5-yr renewals (to 2053) | No rebid for decades |
Note: According to the ordinance package, the new terms begin in 2033, not immediately.
The Numbers: $3.54 Million Lost Over 20 Years
Revised city documents confirm a far steeper taxpayer loss—roughly $3.55 million over the lease’s 20-year term—driven by a reduced rate (2%→1%), a higher baseline ($1.5M→$2.0M), and generous offset provisions that let tenants apply up to $100,000 every five years for required ‘capital improvements,’ reducing or even wiping out the City’s share in those years.
| Category | 20-Yr Loss | NPV (2033 $) |
| Base Rent Shortfall | $900,000 | $650,000 |
| Performance Rent Cut (1% vs 2%) | $750,000 | $550,000 |
| $100 K Capital-Improvement Offsets (every 5 yrs) | $400,000 | $300,000 |
| Sublease Premium (no City share) | $1,500,000 | $1,100,000 |
| Total Loss to City | $3.55 million | $2.6 million |
Sources: Fiscal Impact Note, Revised October 2025 Lease, Staff Report Summary of Changes.
City Records Confirm Softer Terms
Newly released City documents—including the Fiscal Impact Note, Staff Report, and the Revised October 2025 Lease—show that the City’s revenue share has been weakened even more than originally reported.
The performance-rent threshold was raised from $1.5 million to $2 million, while the City’s share was cut in half—from 2 percent to 1 percent.
Tenants can also apply up to $100,000 in capital-improvement credits every five years to offset what they owe, effectively reducing the City’s take to zero in strong-sales years.
Despite those concessions, the Fiscal Impact Note still labels the deal “budget neutral.”
It even acknowledges that “this will decrease the performance rent portion that the City receives; however, the amount is unknown.”
That “unknown” isn’t a rounding error—it’s $3.55 million in lost taxpayer value hiding in plain sight.
What Changed Since 2018
| Lease Element | 2018 Lease (Original) | 2025 Revision (O-33-25) | Impact on City |
| Start Date | Active 2018–2033 | Begins 2033; extends to 2053 | No new income for 8 years |
| Base Rent | $8,464/mo (~$19/sf) | $11,000/mo (+10% every 5 yrs) | Modest rise, still below market |
| Performance Rent | 2% of sales over $1.5M | 1% of sales over $2.0M | City share cut in half |
| Capital Improvements | Optional | Required $100K per term, deductible | Reduces real revenue |
| Subleasing Rights | Limited oversight | Broadly allowed | Tenant keeps profit spread |
| Fiscal Impact Note | Not published | Declared “budget neutral” | Admits loss, masks it as neutral |
In plain terms: the City gave away the upside while inflation eats the rest.
How the Performance-Rent Offsets Work
Under the new formula, the tenant can reinvest performance rent into its own “capital improvements.”
Each five-year term requires at least $100,000 in upgrades, and those costs can be deducted from what the tenant owes.
If a $100,000 renovation matches the City’s share for that period, the City gets zero dollars that year.
That’s not modernization — that’s a shell game.
The Sublease Spread — The Big Enchilada
New Market House LLC pays roughly $19 per square foot under the current lease, rising to about $25 in 2033. But comparable downtown waterfront retail space commands $50–$70 per square foot.
Because the city allows unlimited subleasing, the tenant can sublet stalls to coffee shops and vendors like Rise Up Coffee at full market rate—and keep the difference.
That’s free money for the middleman, not the taxpayer.
Commercial landlords typically claim the premium. Annapolis’s deal lets the tenant pocket it.
At roughly $45 per square foot in potential spread, that’s $230,000 a year—none of it shared with the City.
The Buckley–Danek Web
For two decades, Gavin Buckley and Jody Danek have co-owned some of West Street’s most successful restaurants:
- Tsunami (2003) — fusion pioneer and nightlife anchor
- Metropolitan Kitchen & Lounge (2004) — brunch and rooftop favorite
- Lemongrass (2005, with later expansions) — Thai-fusion hit
- Sailor Oyster Bar — seafood draw near Main Street
They helped found the Inner West Street Association, organizing street festivals, lighting installations, and “Dining Under the Stars” events that turned West Street into Annapolis’s entertainment district.
Supporters call them civic entrepreneurs.
Critics call them a two-man machine whose private ventures and public policies blur together.
Buckley, elected mayor in 2017, promised to divest from his businesses. He never did.
Danek, meanwhile, kept expanding—often with city zoning waivers, parking exemptions, and event permits that coincidentally benefited his establishments.
The 161 West Street redevelopment (2023) drew controversy for its rapid approval after a parking waiver and a partial zoning exemption.
Monday’s Market House lease vote was their culmination: a publicly owned waterfront crown jewel, locked up for decades in the hands of the mayor’s partner.
“Rubber Stamp” Government
The Gang of 9 nickname isn’t just snark—it’s earned. The council votes in near-total unity on almost every issue.
October 27th was no different: unanimous approval, no dissenting questions, and a shrug toward concerns of favoritism or fiscal fairness.
Even reform initiatives are quashed the same way.
The same night the Market House deal passed, the council quietly tabled a ranked-choice voting proposal, killing an election reform measure that could have given independents and fiscal conservatives a fairer shot.
One-party rule has consequences.
This was the latest—and most expensive—example.
Campaign Fire: Enter Bob O’Shea
Mayoral candidate Bob O’Shea said the Market House vote illustrates what he calls “a broken system of cronyism, where friends of friends run City Hall.”
He linked the decision to outgoing Mayor Gavin Buckley’s inner circle and criticized the council’s action as emblematic of insider politics.
(The official record shows the measure passed 7 yes, 0 no, 1 absent, and 1 recusal.)
“When the Buckley gang votes unanimously to give Buckley’s friend a [25]-year, sole-source lease to one of the most historic buildings in Annapolis so that friend can profit with no competition, we have an issue.”
O’Shea said his campaign aims to “fix City Hall — zoning, permits, inspections, and parking — and bring accountability back.”
His November 1, 2025 remarks show how the Market House deal has already become a central issue in the mayoral race.
City Hall’s Double Standard
During COVID, Market House tenants reportedly received rent deferrals and reductions while other small businesses were told to pay in full. City documents show that for part of 2020, New Market House LLC paid as little as $2,500 a month, far below its contracted rate.
Meanwhile, other downtown restaurateurs—McGarvey’s, Middleton Tavern, and Federal House—were paying market rent and full property taxes.
Because the Market House sits on city-owned land, its tenants pay no property tax at all.
That’s a structural advantage worth tens of thousands annually—another quiet subsidy on top of below-market rent.
The Bookends of an Era
In January 2018, one of Buckley’s first official acts as mayor was the approval of the Market House lease.
Eight years later, his final legislative act before leaving office was extending it—for his own business partner.
Beginning and ending with the same deal tells the story: Annapolis politics never left the dock.
Conservative Takeaways
- No rebid: Extension approved eight years early, locking out competition.
- Weaker terms: Lower revenue rate, higher threshold, rent offsets.
- Conflicted relationships: Mayor’s partner directly benefits from city assets.
- Rubber-stamp council: Zero dissent in a one-party city.
- Budget fiction: “Neutral” on paper, millions lost in practice.
The Gang of 9 acted like a private boardroom, not a public body.
What Comes Next
Annapolis residents don’t need another petition—they need accountable leadership.
The Market House lease should be reopened to public scrutiny after the election, with full disclosure of rent data, sublease terms, and performance thresholds.
If this deal truly benefits the City, there should be no hesitation to reexamine it in 2026.
What Reformers Want Next
- Ethics review: The Maryland State Ethics Commission should examine recusals, donations, and communications tied to O-33-25.
- Post-election resolution: Revisit lease terms in 2026 and commission a market-rate audit to assess taxpayer impact
- Public reporting: Require the City to post quarterly performance-rent data online.
- Competitive rebid rule: Mandate either a rebid or a supermajority council vote for any lease exceeding ten years.
Conservative Principle at Stake
Government’s first fiscal duty is to protect taxpayers—through transparency, competition, and accountability.
The Market House vote failed on all counts.
No one begrudges successful entrepreneurs.
But public property is not a private playground.
Annapolis’s leaders should serve its residents, not its restaurant empires.
The swamp isn’t just in D.C.
It’s on City Dock.
Sources
- Capital Gazette — lease coverage and meeting reports
- Baltimore Banner — background reporting
- Eye on Annapolis — public reaction, op-eds
- Legistar (O-33-25) — ordinance and attachments
- O-33-25 Fiscal Impact Note
- O-33-25 Revised Lease — October 2025
- O-33-25 Summary of Changes (Staff Report)
MDBayNews analyzed publicly available documents including the Fiscal Impact Note, Staff Report, and October 2025 Lease Revision (O-33-25). Figures are estimates based on city-supplied rent and rate data.
About MDBayNews
The MDBayNews Editorial Desk tracks waste, cronyism, and reform in Maryland’s capital region.
Tips: editor@mdbaynews.com
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