REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Ashley Wysocki, Director of Community & Library Services
PREPARED BY: Chris Cole, Community & Library Services Manager
Subject:
title
Approve and authorize execution of Amendment No. 2 of the Lease Agreement between the City of Huntington Beach, Richard Alan Clapp, and Dwight’s and Jack’s Inc. for Dwight’s Beach Concession at 201 Pacific Coast Highway
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Statement of Issue:
The City Council is asked to approve Amendment No. 2 of the Lease Agreement with Richard Alan Clapp, and Dwight’s and Jack’s Inc. for Dwight’s Beach Concession at 201 Pacific Coast Highway for an additional ten (10) years and authorize a rent credit for costs for roof repairs.
Financial Impact:
The City will receive a base rent and/or a percentage of gross revenues generated at the facility. Rent revenues would be dedicated to the General Fund (Account Number 10000100.43090.)
Recommended Action:
recommendation
Approve and authorize the Mayor and City Clerk to execute “Amendment No. 2 of the Lease Agreement between the City of Huntington Beach, Richard Alan Clapp, and Dwight’s and Jack’s, Inc. for Dwight’s Beach Concession at 201 Pacific Coast Highway”.
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Alternative Action(s):
Do not approve the recommended action, and direct staff accordingly.
Analysis:
In January 2014, the City entered into a ten (10) year lease agreement with Dwight's and Jack's, Inc. for the operation of Dwight’s Beach Concession to expire on January 21, 2024. The term of this lease contained an option to extend the term for an additional five (5) year period upon mutual consent of City and Lessee as evidenced in writing. In November 2023, the lease term was extended for an additional five (5) years to expire on January 21, 2029.
The City and Lessee wish to further amend the Lease to extend the term and add additional provisions.
• Extend the term of the Lease for an additional ten (10) year period, to expire on January 21, 2039.
• Percentage Rent to increase by 0.5%.
• The minimum base rent would be adjusted annually according to the Consumer Price Index.
• The Lessee shall implement a new Point of Sale system with Z-report functionality for all food, beverage and retail operations.
• Due to the fire in the building on January 31, 2025, Lessee shall be entitled to rent credit from City of up to $17,420.00 for roof repairs, of the total roof repair cost of $41,570.00.
a) Rent Credit must be fully exhausted by January 21, 2029.
b) In the event Lessee receives an insurance payment for the roof repair, such funds shall be paid to the City to recover the value of the Rent Credit.
c) Lessee shall submit its paid invoices for roof repairs, based on competitive quotes, to the City for review and approval.
The City will receive a minimum base rent and percentage of gross sales, based upon the following schedule:
Season Monthly Base Rent Percentage Rent
Low - (Jan, Feb, Nov, Dec) $250.00 4.5%
Mid - (Mar, Apr, Sept, Oct) $750.00 10%
Peak - (May, Jun, Jul, Aug) $1.500.00 12%
Based upon Lessee’s qualifications and previous experience with the City, the Community & Library Services Department is recommending approval of the Lease.
Environmental Status:
Administrative Item:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. RCA Contract Agreement Summary Form
2. Amendment No. 2 to Lease Between the city of Huntington Beach, Richard Alan Clapp, and Dwight’s and Jack’s Inc. for Dwight’s Beach Concession at 201 Pacific Coast Highway