Elizabeth's Pizza is not coming to the city's renovated Union Station building after all, after the council member for East Ward voiced her opposition to the lease the city was poised to enter into with the restaurant.

Acceptance of the lease was on the agenda for Tuesday night's meeting of the Winston-Salem City Council, but instead the council was notified that Elizabeth's Pizza had decided to bow out of the deal.

Annette Scippio, the council member representing the East Ward district that contains Union Station, said Wednesday that she had told other members of the council that she opposed the proposed lease.

"I thought the rental rate was too low," Scippio said, adding that she also didn't like it that the city would be buying furniture, dishes and cutlery for the restaurant.

Lou Baldwin, of Baldwin Properties, represented Elizabeth's Pizza in the negotiations. He said his client, owner Frank Paponte, "made a business decision to pursue other opportunities" after considering that opposition to the proposed lease would lead to further delays.

"My client was interested in the space, but nearly three years have gone by since we started this process," Baldwin said, adding that Paponte didn't want to comment and had authorized him to speak for the business.

Elizabeth Pizza serves pizza and other Italian food. At Union Station, it would have occupied space on the top floor which, because of the building's design, is actually the main floor of the structure: The other two floors go below the main floor to the level of the train tracks below.

Under the proposed lease, Elizabeth's Pizza would have paid the city $14,160 per year during the first two years, with the rent rising to $42,480 by year four.

The city was also agreeing to spend about $350,000 to get space in the building ready for the restaurant. The total included $125,400 for basic restaurant equipment, and $120,000 for furniture, glassware and other items that the city would own. 

"We didn't need to buy the china and glassware," Scippio said. "I was also looking at the restaurants and food businesses on the east side who started up without support from the city. I can't see us having to give such large concessions."

The Elizabeth's Pizza deal was a long time coming together and emerged when Scippio's predecessor, Derwin Montgomery, represented East Ward on the council. Scippio took office last November after Montgomery resigned to take a seat in the N.C. General Assembly.

The council authorized leasing 3,000 square feet of space in Union Station on May 21, 2018 with a starting rate for the first year of $12,000. Further negotiations followed over the leasing of an additional 992 square feet.

The proposed Elizabeth's Pizza lease would have actually been a sublease: In 2015, the city approved the Simon G. Atkins Community Development Corp. to serve as the main leaseholder in charge of subleasing space to retail businesses. Tuesday's action by the council does not affect that arrangement, with the Atkins CDC still in charge of the main lease.

Under the arrangement with Atkins, the city would have remitted to Atkins 15% of the money Elizabeth's Pizza paid to the city. That would have amounted to $2,125 in the first year.

Scippio has questioned Atkins' role in another city project, the plan to improve what's being called East End in the area between U.S. 52 and Martin Luther King Jr. Drive. But Scippio said Wednesday that she has no problem with Atkins CDC's role at Union Station.

Scippio said she hopes another restaurant comes forward, but would prefer one that had a broader menu:

"I really wanted to have a full-service restaurant that had breakfast, lunch and dinner, because we don't have a place on the east side of town where you can have a breakfast meeting," Scippio said. "We need that in our neighborhood because we have a lot of people who are single or retired who love to go out to eat."

Damon Dequenne, assistant city manager, said the city will entertain any offers it gets from others who might want to open a restaurant or some other business in the restored Union Station.

"It is the largest space we have to lease on the top floor," Dequenne said. "We know that the top floor is the most historic and where most of the historic elements are. We have to preserve the history of the building. We can't add or remove walls."

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