TITLE
Recommendation to authorize City Manager to execute the First Amendment to Lease No. 29961 with Beach Ventures, Inc., for the operation of the Belmont Veterans Memorial Pier, to retroactively reduce the minimum rent, retroactively increase certain percentage rents, add an annual in-kind consideration for City of Long Beach use, and assign the lease to Beach Ventures International, Inc., successor in interest to Beach Ventures, Inc. (District 3)
DISCUSSION
On April 18, 2006, the City Council authorized the City Manager to execute Lease No. 29961 (Lease) with Beach Ventures, Inc. (BVI), for the operation of the Belmont Veterans Memorial Pier (Pier), for a term of ten years, through August 31, 2016, with two, five-year extensions at the sole discretion of the City Manager. The Lease was awarded to BVI after it was the sole respondent to a Request for Qualifications (RFQ) issued by the Department of Parks, Recreation and Marine (PRM). In its response, BVI proposed significant improvements to and activities on the Pier, such as additional moorings, dinghy docks, boat rentals, and expansions of the existing meeting and eating spaces (Proposed Enhancements), which necessitated approvals from the California Coastal Commission.
Based on the Proposed Enhancements, the Lease included a monthly percentage rent consisting of a percentage of gross sales in nine different categories, or an annual minimum rent of $13,500, whichever was greater. The annual minimum rent was also scheduled to increase every five years to mirror increases to the Consumer Price Index, and is currently at $14,310 for the Lease year that ended on August 31, 2015.
For various reasons, many of the Proposed Enhancements were never implemented at the Pier. This, combined with, and exacerbated by, the recession that began in 2008, resulted in BVI never meeting its $13,500 annual minimum rent, and only paying the realized percentage rents, which resulted in BVI being in arrears with the Cit...
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