TITLE
Recommendation to authorize City Manager to execute any and all documents necessary for the Third Amendment to Lease No. 23509 with BANCAP Marina Center, Inc., a California corporation, for City-owned property at 241-255 Marina Drive, to decrease the monthly base rent from $37,803 to $34,803, for a two-year period, commensurate with an equivalent two-year reduction in the monthly rent paid to BANCAP by the Seal Beach Yacht Club. (District 3)
DISCUSSION
On February 1, 1994, the City Council authorized the execution of Master Lease No. 23509 (Master Lease) with BANCAP Marina Center, Inc. (BANCAP), for the remodeling, renovation, and management of City-owned property and improvements located at 241255 Marina Drive (Premises). The Master Lease provides for a 25-year term and shall expire on June 30, 2019. The Premises are fully occupied with the following subtenants: Stan Miller Yachts (boat broker); Stoll Engine (marine engine sales); Alan Andrews Yacht Design (custom yacht design); West Marine Products (marine hardware sales); Scuba Duba (boat hull cleaning and maintenance service); Schooner or Later (restaurant); and the Seal Beach Yacht Club (social club). A vicinity map is attached.
In 1995, BAN CAP completed the remodeling and renovation of the Premises at a cost of approximately $1,850,000. The Master Lease allowed these costs to be recovered by BANCAP in the form of a rent credit until such amount was fully amortized, which occurred in October 2005. At this time, the annual base rent increased from $100,000 to $400,000 and is currently at $453,636 per annum ($37,803 per month). BANCAP is also required to make percentage rental payments equal to 70 percent of its Net Operating Income (NO I). Despite the success of the project over the years, the current negative economic environment has placed significant financial strain on one of the major subtenants, the Seal Beach Yacht Club (SBYC).
In February 1994, the City executed a lease with the SBYC and ...
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