TITLE
Recommendation to authorize City Manager, or designee, to execute all documents necessary for the Fifth Amendment to Lease No. 23509 with Bancap Marina Center, Inc., a California corporation (Lessee), which provides for a three-year extension for the continued lease of City-owned property at 241-255 Marina Drive. (District 3)
DISCUSSION
On February 1, 1994, the City Council authorized the execution of Master Lease No. 23509 (Master Lease) between the City of Long Beach (Lessor) and Bancap Marina Center, Inc. (Lessee), for the remodeling, renovation, and management of City-owned property and improvements at the Alamitos Bay Marina Center (ABMC) located at 241-255 Marina Drive (Attachment A-Site Map). Following the completion of the renovations, the existing tenant leases at ABMC were assigned to the Lessee. ABMC is currently occupied by the following subtenants: Stan Miller Yachts (boat broker); Alan Andrews Yacht Design (custom yacht design); West Marine Products (marine retail sales); Scuba Duba (boat hull cleaning and maintenance service); Schooner or Later (restaurant); and the Seal Beach Yacht Club (social club). The Master Lease expires on June 30, 2019.
Under the Master Lease, the City receives base rent of $37,803 per month and a percentage rent of 70 percent of Net Operating Income (NOI) generated from ABMC’s cash flow (NOI less base rent and financing amortization). As part of the Lease, the Lessee receives a monthly property management fee equal to 6 percent of subtenant rents and 30 percent of NOI.
Staff anticipates adjustments to the local real estate market due to current and upcoming developments within the area, including the 2nd & PCH project that consists of over 200,000 square feet of contemporary retail and dining experiences. As the subtenants have been operating successfully at ABMC under the current Lease, and a Lease extension would allow the Lessee to extend the subtenant leases, staff proposes a limited three-year Lease ext...
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