REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Ashley Wysocki, Director of Community & Library Services
PREPARED BY: Chris Cole, Community & Library Services Manager
Subject:
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Approve and authorize execution of a Lease Agreement between the City of Huntington Beach and HBSC Partners, LLC, for operation of two food concessions at the Huntington Beach Sports Complex located at 19260 Goldenwest Street and 7300 Talbert Avenue
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Statement of Issue:
The City Council is asked to approve a five-year Lease Agreement, between the City of Huntington Beach and HBSC Partners, LLC, for operation of two concession buildings located at the Huntington Beach Sports Complex, with an option to extend for up to two additional five-year terms.
Financial Impact:
Monthly, the City will receive a minimum base rent, or a percentage of gross revenues generated at the facility, whichever is greater. Commencing on the first anniversary of the lease, and each anniversary thereafter, the minimum base rent will be adjusted by an annual three percent (3%). The percentage rent will also increase from eight percent (8%) in Year 1 to fifteen percent (15%) in Years 4 and 5.
Minimum Monthly Base Rent
Percentage Rent
Year 1
$2,000
OR
8% of Gross Sales
Year 2
Plus 3%
OR
10% of Gross Sales
Year 3
Plus 3%
OR
12% of Gross Sales
Year 4
Plus 3%
OR
15% of Gross Sales
Year 5
Plus 3%
OR
15% of Gross Sales
While estimated annual revenues under the new operating scenario are unknown, prior annual revenues ranged from $34,000 to $43,000.
Recommended Action:
recommendation
Approve and authorize the Mayor and City Clerk to execute the "Lease Agreement Between the City of Huntington Beach and HBSC Partners, LLC, for Operation of Food Concessions at the Huntington Beach Sports Complex."
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Alternative Action(s):
Do not approve the recommended action, and direct staff accordingly.
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