REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Jennifer Villasenor, Director of Community Development
PREPARED BY: Kriss Casanova, Economic Development Manager
Subject:
title
Approve and authorize execution and recordation of a Lease Agreement with Surf City Partners, LLC for 21 and 22 Main Street at the Huntington Beach Pier and Approve Building Fee Waivers
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Statement of Issue:
The City Council is asked to approve a Lease Agreement with Surf City Partners, LLC ("Lessee") for concession space at 21 and 22 Main Street on the Huntington Beach Pier. The lease would extend through June 2043, with a monthly base rent of $5,500, plus 3% of any gross sales over $2 million annually. The base rent will increase by 3% each year. The Lessee plans to invest over $1 million to turn the retail space into a restaurant with outdoor seating and related amenities. The project will also include expanding and remodeling public restrooms and building a new bait shop. Additionally, the Lessee is requesting that the City Council waive plan check and inspection fees, and provide a $300,000 rent credit to help with the restroom and bait shop construction costs.
Financial Impact:
The starting base rent is $66,000 per year ($5,500 per month) with annual 3% increases. Additionally, the City may receive percentage rent, which is 3% of gross sales above $2 million annually. If the City Council approves the requested rent credit of $300,000, the City is expected to begin receiving rent payments in year five of the lease, after the rent credit is fully applied.
Recommended Action:
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A) Approve and authorize the Mayor and City Clerk to execute the "Lease Between the City of Huntington Beach and Surf City Partners, LLC;" and,
B) Direct the City Clerk to record lease agreement with the Orange County Clerk Recorder; and
C) Approve the waiver of up to $50,000 ...
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