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SR-04-24-2012-3DIdma City of it Council Report Santa Aionica City Council Meeting: April 24, 2012 Agenda Item: 3 -17 To: Mayor and City Council From: Andy Agle, Director of Housing and Economic Development Karen Ginsberg, Director of Community and Cultural Services Subject: Park - Oriented Restaurant Adjacent to Palisades Garden Walk Recommended Action Staff recommends that the City Council authorize the issuance of a Request for Proposals (RFP) for a restaurant operator to lease and remodel or construct a restaurant on the City -owned property located at 1657 Ocean Avenue, in accordance with the criteria and recruitment approach outlined in this report. Executive Summary The City -owned property located at 1657 Ocean Avenue (the Site), is leased to Jay's Tavern, and operated as Chez Jay restaurant at this time. Palisades Garden Walk, currently under construction, will surround the Site and create an opportunity for the existing restaurant to be upgraded to better serve patrons of the new park. This report recommends that the Council authorize the issuance of an RFP for a restaurant operator to lease and remodel or construct a restaurant on the Site. The RFP would indicate a preference for a casual dining restaurant, with or without alcohol, since that meets the objectives of the Civic Center Specific Plan (CCSP) and is designed and oriented to serve Palisades Garden Walk (PGW). Background ' In April 2000, the former Santa Monica Redevelopment Agency (Agency) purchased 11.3 acres of land from the RAND Corporation (RAND) to implement the Agency's Five - Year Implementation Plan and the City's 1993 Civic Center Specific Plan (updated on June 28, 2005). As part of the purchase, the Agency acquired the parcel that included Chez Jay restaurant. Chez Jay is located on a 7,500- sq.ft. parcel located at 1657 Ocean Avenue (Attachment A). The City's original lease was authorized October 26, 1999, with Jay Fiondella, sole owner. Mr. Fiondella died in 2008. Jay's Tavern Inc., current lessee, is controlled by Anita Fiondella Eck, Mr. Fiondella's daughter, and Michael Anderson. Chez Jay has been operating on a month -to -month lease since June 2003. 1 Chez Jay has operated as a steak house since 1959 and has a storied history as a gathering place of various celebrities. The existing restaurant is currently located on the western edge of Palisades Garden Walk (PGW). The CCSP calls for a park- oriented restaurant in this location (Attachment B). Extensive efforts to implement the CCSP have been made since its adoption in 2005. On June 14, 2011, Council approved the design development plans for PGW with the understanding that staff would return with recommendations to address the park- oriented restaurant at a future date. On March 9, 2011, the Agency transferred ownership of the property to the City. Discussion The proposed leasehold includes the 7,500 - sq.ft. parcel located. at 1657 Ocean Avenue, a portion of the vacated alley to the north, and the southern 20 feet of the parcel located adjacent to and south of 1657 Ocean Avenue, for a total square footage of approximately 12,500, as shown in Attachment C. The CCSP specifies design parameters for the restaurant and park- oriented building(s) to include "pavilion -like structures that allow for the generous flow of activities from interior to exterior spaces ", a maximum floor area of 15,000 sq. ft., a maximum footprint of 10,000- sq.ft., and a height limit of two floors and 25 feet. The CCSP encourages the use of verandas, terraces, patios, and other intermediary space in the design of the restaurant. In addition, the CCSP conceived of the "park- related" restaurant and buildings as "complementary with the design and activity program for the park." The existing restaurant is oriented toward Ocean Avenue, with no outdoor seating areas or take -out food windows and nominal landscaping, and provides lunch, dinner and alcohol service. Through extensive community input, PGW's dynamic design will feature topography that includes creative water elements and public gathering spaces, ADA- accessible amenities, and a major work of public art, "Weather Field ", viewable from many vantage points in the park (Attachment D). 2 To achieve the goals of the CCSP and complement the PGW project, staff recommends that the City issue an RFP for a restaurant operator to lease the Site and upgrade the restaurant, either through remodeling or reconstruction, in accordance with the following preferred criteria: • The operator must demonstrate the ability to upgrade the improvements, either through remodeling or new construction, in a manner that offers excellent architectural merit in keeping with the CCSP design parameters. • The operator will be required to provide all construction and operational financing, with a rent credit to be negotiated. While real estate commissions are usually the landlord's obligation, a rent credit may be negotiated should the restaurant be selected through efforts of the tenant's restaurant broker. • The operator must be financially and operationally capable of providing quality food and beverage offerings. • The restaurant should offer casual dining, preferably with food service to be available throughout the day, in a facility which provides a unique aesthetic and ambiance that relates to the PGW experience by providing outdoor dining and visitor - serving amenities, catering to patrons of PGW and adjacent uses. Alcohol may be served on the premises. • The restaurant should incorporate sustainable materials and practices into its building and operations. In addition, the RFP will advise respondents of the City's other municipal code and propriety requirements specific to restaurants and City leases including the Healthy Foods Initiative, ban on smoking and plastic bags, labor peace and local hiring preferences. Recruitment Process Staff intends to advertise the availability of this restaurant opportunity on the City's web - site, in local newspapers, in the Los Angeles Business Journal and on the California Restaurant Association electronic newsletter. In addition, staff will advise the incumbent restaurant operator of this upcoming opportunity. Next Steps Following authorization from Council, staff will issue the RFP. Depending on the number and quality of submissions received, staff will either return to Council to seek 3 negotiating instructions for a lease with the recommended operator, or return to council for authorization to seek additional information from a short list of finalists. If the latter approach is taken, .staff will return to Council to seek authorization to negotiate and execute a lease with the finalist from the short -list process. The goal is to select a lessee and negotiate a lease by the end of 2012 so that the planning and construction of the restaurant can be completed as close to the opening of PGW as possible, which is scheduled for December 2013. Financial Impacts & Budget Actions There are no budget impacts as a result of the issuance of this RFP. The City would receive revenue from the new lessee in accordance with lease terms to be negotiated. Prepared by: Elsa Trujillo, Senior Development Analyst Andy­Agle, Director Housing and Economic Development Approved: l Karen Ginsberg, Community and Attachments: Forwarded to Council: Rod Gould, City Manager Attachment A — Existing Site Plan Attachment B — CCSP Site Plan Attachment C — Premises Attachment D — PGW Site Plan (Rendering) 1657 OCEAN AVENUE D D n m z R J D 1 D n S m z --i W ATTACHMENT C CO]U =10�14MPiIA :3W --I" Connective Elements: J �r N I ^( mR i1P ]6)11 trma canopq Planting lawn circulation is brays and furniture waWrfoawra hu, cl� D D n S m z W