TITLE
Recommendation to authorize City Manager to execute all documents necessary for the assignment of the lease for City-owned property at 600 Queensway Drive from Long Beach Group Inc., a California Corporation, to LBH Land Holding Company, LLC, a California limited liability company, and to execute an Amended and Restated Lease between LBH Land Holding Company, LLC, and the City of Long Beach for development of a 152-room hotel. (District 2)
DISCUSSION
In April 1987, the Board of Harbor Commissioners entered into a lease with Quiet
Cannon Long Beach, Inc., for the operation of a restaurant with a banquet room and
cocktail lounge at 600 Queensway Drive (see Exhibit “A). Subsequently, a number of
lease assignments ensued and in 1994, the Lease was assigned to the current lessee,
Long Beach Group Inc., DBA Naga Restaurant. Per the Lease terms, the City receives
an annual base rent of $32,196 and percentage rent based on gross sales above the
annual base rent. Over the past eight years, the Lease has generated only the
minimum base rental as the restaurant has not achieved the success anticipated. The
Department of Community Development currently administers the Lease.
Long Beach Group has requested the City’s consent to the assignment of the Lease to
LBH Land Holding Company, LLC, a California limited liability company (LBH). It is
LBH’s intention to enter into an Amended and Restated Lease for the removal of the
existing improvements and the development of a hotel. The proposed hotel, of the
caliber of a Residence Inn by Marriott, will be the only extended stay hotel located on
the waterfront in the Queensway Bay area.
Staff , with the assistance of real estate consulting firms Keyser Marston Associates
(KMA), have reviewed LBH’s financial background for assignment of the Lease and for
the development and operation of the proposed hotel. KMA has concluded that LBH
has the financial capability and sufficient background and experience as a hotel
developer and ...
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