TITLE
Recommendation to authorize City Manager, or designee, to execute any and all documents, including additional lease and capital funding provisions, necessary for an Amended and Restated Lease and Operations Agreement No. 22697 with Urban Commons, LLC, for the Queen Mary and adjacent properties; and
Authorize City Manager to proceed with funding up to $23 million in infrastructure repairs to the Queen Mary by using up to $5.8 million in total reserves designated for the Queen Mary and borrowing approximately $17.2 million to be repaid from Queen Mary related revenues. (District 2)
DISCUSSION
On November 17, 2015, the City Council authorized the City Manager to execute an Amended and Restated Lease and Operations Agreement No. 22697 (2015 Amended and Restated Lease) with Urban Commons, LLC (Urban Commons), as Successor Lessee to Garrison Investment Group, LLC (attached). The previous action also authorized the assignment of the 2015 Amended and Restated Lease from Garrison Investment Group, LLC to Urban Commons, LLC. Significant deal points of the 2015 Amended and Restated Lease included making capital improvements to the Queen Mary using City revenue from Carnival Corporation (Carnival) passenger fees. Another key deal point was the requirement for Urban Commons to sublease the entire dome to Carnival for expanded terminal operations to accommodate larger cruise ships, the first of which is expected to arrive in January 2018. The other major deal point was to ensure that Urban Commons had the financial capability to develop the land surrounding the Queen Mary.
Subsequent to the approval of the terms by the City Council on November 17, 2015, the negotiations between Urban Commons and Carnival to accomplish several of the deal points were more complicated, and more costly to implement than initially anticipated; therefore, the 2015 Amended and Restated Lease was not executed.
The City and Urban Commons have now agreed to changes in lease terms associate...
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