Loading...
SR-6-H (78) itiN 2 2 1C;.~:' ;.1 ,. (oH I CCS as JM F \CCSADMN\SHARE\BEACH\CONCESS\srlease wpd Council Meetmg June 22, 1999 Santa Monica, California TO Mayor and City Council FROM City Staff SUBJECT Recommendation to Authorize City Manager to Negotiate and Execute Beach Concession Agreement with Perry's Beach Cafe and Rentals Introduction This report recommends that the City Council authorize the City Manager to negotIate and execute a Lease and Concession Agreement with Chaos Enterprises d b a Perry's Beach Cafe and Rentals (Perry's) for operation of four beach concessions at Santa MOnfca State Beach Background The CIty of Santa MonIca leases a number of concessIons on the State Beach under the City's Operating Agreement with the State of Callforma The Concession Agreement With the current operator, Perry's Beach Cafe and Rentals, expired In 1993 OperatIon continued on a month to month basIs The City received approval from the State LegIslature for the solicitation of proposals for five beach conceSSIons, for a term of five years, With a mInimum rental requirement of 20% of gross sales This provided an opportumty for the CIty to test the market for a number of new amenities for the beach-going public A notice was published In both the Los Angeles Times and The Outlook on December 9 and December 16, 1996 A lOH 'UN 2 2 1".~n J I ~:-,.. . I total of 27 Interested parties received the Request for Proposals (RFP) A Pre-Proposal Conference and Tour was held on December 19, 1996 which was attended by representatives from 14 firms, proposals were due on January 14, 1997 Discussion The City received only one proposal, from the current operator, Chaos Enterprises d b a Perry's Beach Cafe and Rentals Staff followed up with prospective proposers and learned that the 20% rent requirement set by the State Legislature was seen as prohibitive for businesses that would need time to establish at the beach While 20% IS at the high end of the rent scale for thiS type of beach conceSSion, the current conceSSIonaire has been paYing thIS amount of rent since 1990 Staff recommends awarding the Concession Agreement to Perry's Beach Cafe and Rentals based on the proposal submissIon whIch satisfIes the criteria outlmed In the proposal abIlity to finance, strong credit record, Similar business experience, ability to perform, sound management and operatIon plan, and meetmg the percentage rent requirement Perry's has been operating the beach concessions since 1987 The success of their efforts to Improve the quality and vanety of food concessions and services IS seen In the continued growth In gross sales each year Since the time the State Legislature approved the proposed rental terms, there have been changes In the State concession gUidelines which proVide greater fleXibility In setting the term and rent requirement At the next concession lease opportunity. the 2 . City will be able to submit a proposal package for approval to the State Legislature which may have a lower rent requirement and/or a longer lease term and generate more competitive proposals The proposed lease term IS five years, effective July 1, 1999 Perry's proposal mcludes a minimum annual fIxed rent of $200,000 or 20% of gross sales for the four eXisting conceSSions, whichever IS higher The permItted uses Include food and non- alcoholic beverage sales, and rental and sales of beach equipment such as two- wheeled bicycles and skates The lease requires that 1 5% of annual gross receipts be used for repair and renovation of the concessions The State Department of Recreation and Parks has approved the proposed award of the Lease and ConcessIon Agreement to Perry's Beach Cafe and Rentals There are currently five concessIon locatIons Since 1993. only four have been In operation These four stands sell fast food such as hamburgers, hot dogs, and pizza. and rent and sell skates and bicycles The fifth, located at 1100 Pacific Coast Highway, has not been Viable economically primarily because of Its close proximity to the concession stand at 1200 PaCific Coast Highway However, given ItS location adjacent to the bike path and Within walking distance from the Santa Monica Pier, the site has potential as a casual Sit-down cafe ThiS use IS permitted under ProposItion S Perry's proposal also responded to the longer-term pOSSIbility of renovatIng the 1100 PaCIfic Coast Highway location as a casual restaurant/cafe Since thiS concept was Included In 3 . the competitive proposal process, staff will pursue negotIatIons with Perry's for the . rehabilitation and operation of this location subject to all State and local regulatory approvals, Includmg City CounCil approval Another concession amemty Included In the RFP IS a limited food service cart program A cart program to enliven public spaces was suggested by a number of Boards and Commissions dUring the public review penod of the beach portion of the Beach Improvement Group (B I G ) Project The proposed lease prOVides for the additIon of food service carts, the number and location of which must be approved by the City A concession amemty not contemplated In the RFP IS the Installation of two vending machines and lockers at each of the four locations The vending machInes Will be Installed by Coca Cola which Will proVide a bank of 35 lockers for day use by the public The lockers Will be housed between the two vending machines In an enclosure consIsting of a surfboard shaped roof and two Sides The vending machines Will have a beach activity graphiC and the Coca Cola name only The lockers Will be secured by a roll-up metal door dunng the hours the concessions are closed The key operated lockers Will be available for hourly or dally rental dunng Perry's bUSiness hours, the procedures Will be the same as those used for skate and bike rentals which requIre a license or passport be left as secunty until the patron returns The locker program will help meet the many requests received over the years from the publiC for a place to store valuables and shoes while enJoYing beach actlvltles Staff IS recommending that 4 " . the vendmg machme and locker program be Implemented on a pIlot basIs . Budget/Fiscal Impact The proposed FY 1999-00 Budget Includes projected revenue of $280,000, the same as the estimated actual for FY 1998/99 No additional budget action IS necessary Recommendation Staff recommends that the City Council authonze the City Manager to negotiate and execute a Lease and Concession Agreement with Chaos Enterpnses d b a Perry's Beach Cafe and Rentals for four beach conceSSions, limited food service carts, and a pilot vending machine and locker program Prepared by Barbara Stinchfield, Director JudIth MeIster, Beach Manager Department of Commumty and Cultural Services 5