TITLE
Recommendation to authorize City Manager to execute a first amendment to Permit No. 27552 to change the permittee’s name from Dream Cruises, Inc., to Hornblower Yachts, Inc.; to adjust the permit fees, including annual minimum fees; and to extend the term through November 30, 2011. (District 2)
DISCUSSION
On November 6, 2001, the City Council authorized the execution of Permit No. 27552 (Permit) with Dream Cruises, Inc., (Dream Cruises) for commercial operations of harbor and dinner cruises, whale watching tours, and all charters, except scuba diving and sport fishing (Attachment A). The Permit was executed for a five-year term with three five-year options to renew, subject to approval by the City Manager.
In December 2004, Dream Cruises notified the Department of Parks, Recreation and Marine (PRM) of the sale of all interests and obligations to Hornblower Yachts, Inc.
(Hornblower). The new owners elected to continue operations under the name Dream Cruises for the duration of the initial five-year permit term.
The successor is now requesting to exercise the first five-year renewal option under the name Hornblower Yachts, Inc. The first amendment has been negotiated with the proposed major terms and conditions, as follows:
. Permit Term Extension: December 1, 2006, through November 30, 2011.
. Annual Minimum Permit Fee: $30,000. The annual minimum rate shall be adjusted using the U.S. Department of Labor, Bureau of Labor Statistics Consumer Price Index for Los Angeles-Riverside-Orange Counties in each succeeding year of the Permit.
. Permit Fees:
~ Year 1 (December 1, 2006, through November 30, 2007): The greater of $30,000, or 6
percent of gross receipts.
~ Year 2 (December 1, 2007, through November 30, 2008): The greater of annual
rate, or 7 percent of gross receipts.
~ Years 3 - 5 (December 1, 2008, through November 30, 2011): The greater of annual
minimum rate, or 8 percent of gross receipts.
. Dock fee: $14.00 per lineal foot per month, or other fee subsequently adopted by the City Council.
This matter was reviewed by Principal Deputy City Attorney Charles Parkin on March 14,2007, and Budget and Performance Management Bureau Manager David Wodynski on March 22,2007.
TIMING CONSIDERATIONS
City Council action is requested on April 3, 2007, to enable the execution of the first amendment.
FISCAL IMPACT
During FY06, $49,252 in fees was generated through this permit, based on 5 percent of gross revenue. Under the new terms of the requested amendment, permit and dock fees are projected to be a minimum of $55,200. All fees will be deposited into the Tidelands Operating Fund (TF) in the Department of Parks, Recreation and Marine (PR).
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
PHIL T. HESTER
DIRECTOR OF PARKS, RECREATION AND MARINE
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APPROVED: |
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GERALD R. MILLER |
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CITY MANAGER |