REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Chair and Board Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Kellee Fritzal, Deputy Director of Economic Development
Subject:
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Approve and authorize execution of Lease Agreements for two concession buildings at the Huntington Beach Pier with Kite Connection and Surf City Store
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Statement of Issue:
The City Council is requested to approve lease agreements for two of the concession buildings located on the Huntington Beach Pier with 1) DBA Kite Connection International Incorporated; and 2) Surf City Store.
Financial Impact:
Kite Connection
The Kite Connection currently pays $790.13/month in base rent which will be increased to $950.00/month. The current Percentage Rent is 10% of gross sales that exceed $790.13/month. The Percentage Rent will be increased to 10.5% of sales that exceed $950.00/month at the commencement of the new lease and increase to 11% in year 6.
Surf City Store
The Surf City Store currently pays $790.13/month in base rent which will be increased to $950/month. The current Percentage Rent is 10% of gross sales (of non "Surf City" merchandise) that exceeds $790.13/month. The difference in base rent amounts between the concessionaires is due to the Surf City Store trademark license agreement which provides a revenue share of an additional 5% of all gross sales at the Surf City Store. The Percentage Rent will be increased to 10.5% of gross sales that exceeds $950.00/month at the commencement of the new lease and increase to 11% in year 6.
Revenue from the leases will be deposited into the General Fund (1000100.43095) Beach Concessions.
Recommended Action:
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A) Approve and authorize the Mayor, City Clerk, and City Manager to execute "Lease Between the City of Huntington Beach and Dave Shenkman, Doing Business As Kite Connection International Incorporated;" and,
B) Approve and authorize the Mayor, City Clerk, and City Manager to execute...
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