TITLE
Recommendation to authorize City Manager to execute the Third Amendment to Lease No. 25092 between the City of Long Beach and James J. Choura, dba El Dorado Food Service, for a food and beverage operation at the El Dorado Golf Course Restaurant, located at
2400 Studebaker Road, for a term extending through March 31, 2012. (District 5)
DISCUSSION
On April 8, 1997, the City Council authorized the execution of a lease agreement with Mr. James J. Choura for the food and beverage operation at the EI Dorado Golf Course Restaurant, for a two-year term, with one three-year and three five-year options for renewal (Attachment 1). Under the provisions of the original lease, Mr. Choura was required to make facility improvements to comply with the Americans with Disabilities Act of 1990 (ADA) prior to receiving authorization for the initial three-year extension. All improvements were completed in compliance with the ADA.
On August 24, 1999, the City Council authorized the execution of the First Amendment to the Lease to extend the term through March 31, 2002 (Attachment 2). In addition to extending the term, the First Amendment included a requirement for the completion of six additional facility improvement projects before authorization would be granted to execute the next term extension. The completion of the six projects extended beyond a three-year term, concluding in December 2002. Following the March 31, 2002, expiration of the First Amendment, Mr. Choura continued to operate on a month-tomonth lease.
In June 2003, Parks, Recreation and Marine staff completed the final inspection and approval of all of the projects. On July 8, 2003, the City Council authorized the Second Amendment to the Lease to extend the term through March 31,2007 (Attachment 3).
In accordance with the lease requirements, Mr. Choura has requested authorization to exercise the second five-year renewal option to extend the lease term through March 31,2012. One five-year renewal option remains.
The lease includes a provision to adjust the minimum rent every five years. The adjustment shall be 75 percent of the average annual total rent paid during the previous five years. If this amount is less than the minimum already in place, the minimum will remain the same. Should Mr. Choura elect to exercise the last five-year renewal option, the rent analysis will include payments from November 2006 through October 2011.
Rent for the term extending through March 31, 2012, shall be 8 percent of gross monthly receipts, or $7,400, whichever is greater, for an annual minimum rent of $88,800.
This item was reviewed by Principal Deputy City Attorney Charles Parkin on January 18,2007, and Budget Management Officer David Wodynski on January 23,2007.
TIMING CONSIDERATIONS
City Council action is requested on February 6, 2007, to authorize the execution of the Third Amendment to Lease No. 25092.
FISCAL IMPACT
During the term of the Third Amendment, the minimum annual lease revenue will be $88,800. All revenue will be deposited into the General Fund (GP) in the Department of Parks, Recreation and Marine (PR).
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
NAME PHIL T. HESTER |
APPROVED: |
TITLE DIRECTOR OF PARKS, RECREATION AND MARINE |
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GERALD R. MILLER |
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CITY MANAGER |