Annapolis has inked a deal with the current operators of the historic Market House that will extend their management through 2038.

The City Council voted Monday to enter into a new lease that will take effect in 2033, when the current lease expires. It will run for five years, with optional extensions.

When the new agreement takes effect, the monthly base rent will increase to $11,000 from $8,400.

It will also change performance rent requirements: Market House will pay the city 1% of gross revenue greater than $2 million. Currently, Market House pays 2% of gross revenue over $1.5 million.

The market is managed by a partnership of three people: Michele Bouchard, Joe Lyon and Jody Danek.

Danek is Mayor Gavin Buckley’s partner on other ventures in the city. But the mayor, who is leaving office when his term expires later this year, recused himself from votes related to Market House and is not a partner in it.

Buckley left the City Council chambers Monday night during the council’s discussion of the lease and vote on it. The remaining aldermen largely spoke in favor of continuing the lease, ultimately voting unanimously to approve the future one.

“Since this vendor has taken over, it [The Market House] has been open, it has been flourishing, it is a place where people go and gather. I do believe the continuation of the business is a good thing for the city,” said Alderwoman Karma O’Neill, a Democrat who represents Ward 2.

Opened in the 19th century as a marketplace for watermen, the Market House has had a complicated — and contentious — history.

When the new partners won the Market House lease in 2018, the outgoing company stripped the building to its walls. The new operators invested at least $500,000 to reimagine the space.

Council members said it has been good to have a tenant in place that has operated the space successfully. That rings especially true as the city pursues plans to renovate City Dock, some council members said.

“It is thriving,” said Alderwoman Sheila Finlayson, a Democrat representing Ward 4. “My concern is that we do something to interrupt that. We should be doing something to perpetuate it, not interrupt it.”

Danek said he and his partners are glad to have the future lease in place, saying it gives them the confidence to invest in Market House.

“It’s just going to allow us to have a little bit of clarity about our future,” Danek said.

In addition to recent improvements to the floors and tile, Danek said the group has plans to renovate the bathrooms in 2026.

Also Monday night, the council tabled a proposal that would bring ranked-choice voting to municipal elections in Annapolis.

With the council not meeting again before the November elections, the move effectively kills the proposal. It will be up to the new slate of aldermen to decide whether to consider the idea in the future.