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Home My WebLink About10/20/1999 - STAFF REPORTS (13) DATE: October 20, 1999 TO: City Council FROM: Director of Aviation RECOMMENDATION: That the City Council approve a Lease Agreement by and between the CITY OF PALM SPRINGS, a municipal corporation ("City"), and Anton Airfood, Inc., a Food & Beverage Concessions Operator, ("Tenant")for Food&Beverage Concessions atthePalm Springs International Airport("Airport"or"PSP"). BACKGROUND: As a component of the overall Phase IIA Terminal Expansion Plan,the Airport sought qualified food& beverage operators to operate several new concession spaces and existing food &beverage spaces both landside and airside. As part ofthe Airport's Terminal Concession Development Program(TCDP),Request for Proposals (RFP 08-99) were solicited, followed by a request to interested parties to make a formal presentation to a selection committee formed by the City Manager. At its September 15, 1999 meeting, the City Council authorized staff to enter negotiations with Anton Airfood,Inc.for food&beverage concessions. Staff met with representatives from Anton Airfood,Inc.and discussed store concepts,architectural layouts,proposed menus,fixtures and equipment for store numbers 2,3, 11;14 and 17. Anton Airfood, Inc., founded in 1989, as a small food and beverage concession operating at Reagan WashingtonNational Airport(DCA),has become one of the premier airport food and beverage operators in the airport industry. With criteria such as high regard for customer service, quality products, innovative concepts,and strong management,Anton Airfood,Inc.was voted Best Airport Food and Beverage Operator 1998/1999 by airport executives, consultants,Road Warrior-Frequent Flyers,and even their competition. This is the third time Anton Airfood,Inc.has won this prestigious award In 10 years,Anton Airfood has grown from a single location at DCA to a total of 42 airport restaurants, presently in operation or under development. Anton Airfood,Inc.is now the third largest operator of airport food and beverage concessions in the United States. Anton Airfood,Inc.'s marketing concept for Palm Springs International Airport includes,but is not limited to the following: Seattle's Best Coffee/Freshens Premium Yogurt(space# 14,17)offering rich gourmet coffee blends, fresh baked pastries,bagels,yogurt smoothies and hand-dipped ice cream; Palm Springs Brewing Company (space # 2) a local brand name, offering award winning beer, ales and creative microbrews;Celebrity Bistro(space#3)a frill service restaurant reflecting the glamour,history and panache ofPalm Springs. Memorabilia,photos and artifacts pay tribute to the many stars who have helped create the Pahn Springs mystique;The Desert Classic Grille(space# 11)is a Euro style restaurant and bar featuring an upscale quick service station that offers fast food with a flair. The design intent of this golf-themed multi- faceted restaurant is to create a tasteful tribute to two legendary desert tournaments:The Bob Hope Desert Classic and the Dinah Shore LPGA event. Menu selections have been named depicting desert golf history. The open kitchen is visible behind the back bar and is highlighted with a rounded copper hood. Cherry wood veneers and granite bar tops reflect the warmth and classic styling of an upscale clubhouse. A concessions agreement drafted by the City Attorney's office for the operations and maintenance of certain food&beverage locations and related facilities has been successfully negotiated with Anton Airfood,Inc. and includes the following: 1) Minimum Leasehold Investment-$2,067,889($342 per sq.ft.) 2) Lease Term- 10 years,plus a 5 year option 3) Minimum Annual Guarantee(MAG)-$25.00 per sq.ft.or$72,000 whichever is greater in the first year. • Adjusted Annually at 80%thereafter • MAG begins when last new store opens for business 4) Percentage Rentals 0-800.000 Ennlanements 800,001 +Env hmements 1104 • Palm Springs Brewing Co. 5% 7.5% • Celebrity Bistro 5% 7.5% I I Ws - �. • Desert Classic Grille 5% 7.5% • Seattle's Best Coffee/Freshens 5% 7.5% • If Airport Enplanements exceed 800,000 in the fiscal year, tenant will pay the City the difference in the percentage;and 5) Hours ofBusiness shall be one(l)hour prior to the first scheduled departure and closing one half('h)hour after last departure,seven days a week,365 days a year. There are several Operational Requirements included in the proposed lease agreement for Quality of Service Standards, Pricing, Uniforms, etc. The proposed lease agreement shall be effective November 1, 1999 at OOO1L. The selection committee and the Airport Commission unanimously supported and recommended the City Council's approval of the proposed Lease Agreement with Anton Airfood,Inc.for Food&Beverage Concessions at Palm Springs International Airport. An Airport Key Plan,depicting the proposed store layouts,is attached for your review. A Minute Order is attached for City Council consideration. JERI .RIDDLE Director of Avian n APPROVED City er ATTACHMEUIM: 1. Minute Order 2. Airport Rey Plan 1 MIR _ 0 &I if vil sm ZVOt Ls3aAs3iuv�5 is3es3iuvh I' 9 Iva I: I \` / JNVO ?i�a .CIJ l�1_W_1 1 Owid Ae]j #JodA IV a a r Palm Springs AAI, Inc. Subsidiary of Anton Airfood Lease Agr for Concessions AGREEMENT #4158 M06509, 10-20-99 related LEASE AGREEMENT FOR CONCESSi.» - - - - -AT THE PALM SPRINGS INTERNATIONAL AIRPORT THIS LEASE AGREEMENT FOR CONCESSIONS AT THE PALM SPRINGS INTERNATIONAL AIRPORT (herein "Lease") is made and entered into this 1st day of November, 1999 ("Effective Date"), by and between the CITY OF PALM SPRINGS, a municipal corporation("City"), and PALM SPRINGS AAI, INC., a wholly owed subsidiary of Anton Airfood ("Tenant"). RECITALS A. City is the owner of the Palm Springs International Airport (the "Airport"), and operates thereon the Palm Springs Airport Terminal building ("Terminal"), which Terminal is specifically depicted at Exhibit "A". B. City and Tenant wish to enter into this Lease for the operation and maintenance of certain restaurants, alcohol beverage facilities, food stands and related facilities at those locations within those areas in the Terminal depicted at Exhibit "B" ("Lease Area"), and to more clearly set forth the respective obligations of each party relating thereto. C. City and Tenant have executed that certain Option Agreement granting Tenant the option to lease the Lease Area upon the terms set forth in this Lease, and upon the City's approval of Tenant's preliminary construction plans, construction contract documents and proof of financing for Tenant's development of the Lease Area, as further set forth in the Option Agreement. A copy of the Option Agreement is attached hereto as Exhibit "C". D. By executing this Lease, the parties acknowledge that Tenant has satisfied those conditions in the Option Agreement required therein prior to the execution of this Lease. E. City's decision to enter into this Lease with Tenant is based upon Tenant's experience, Proposal and inspection of the Terminal and acceptance thereof. COVENANTS In consideration of the foregoing Recitals and the mutual covenants and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Services of Tenant and Use of Park. 1.1 Tenant &M of Services. City's primary purpose for entering into this Lease is to promote the development of food and beverage concessions to serve the public at the Terminal. In compliance with all terms and conditions of this Lease, Tenant shall provide certain services at the Lease Area to serve the public at the Airport, which services shall generally include the operation, management, and maintenance of pre-packaged food facilities ("Snack Shops") restaurants serving a variety of high quality foods prepared fresh and made to =101404-ora3 OMU aM40 -1- O� PALM City of Palm Springs Office of the City Clerk Cq[/Fo It 3200 Uhqu Cawpn Way•Palm spnW.Cahfmw 92262 TEL•(760)323-8204•TDD:(760)864-9527 January 27, 2" Palm Springs AAI-Main Terminal Reagan National Airport Washington D.C. 20001 Dear Ms. Anton: Attached is one executed copy of the agreement regarding the Palm Springs Airport Food Concessio AAI and the City of Palm Springs, approved by the City Council ctober 20, 1999, b Minute Order No. 6509. Agreement#4158. Certificates of Insurance should be provided, naming the City of Palm Springs as an additional insured, for General Liability for$1,000,000 CSL; Automobile Liability for $5W,000 CSL; and Worker Compensation in California Statutory requirements. Additionally, the contract does require a Security Deposit in the amount of$18,000 to be provided. Further, the cancellation clause shall state as follows: Should any of the above-described policies be canceled before the expiration date thereof, the issuing company will mail 30 days written notice to the certificate holder named to the left. Should you have any questions, please let me know. Sincerely, PATRICIA A. SANDERS, CMC City Clerk cc: Airport w/agreement Finance w/agreement Post Office Box 2743 0 Palm Springs, California 92263-2743 MINUTE ORDER NO. Wo / APPROVINGALEASEAGREEMENTBETWEENTHE CITY OF PALM SPRINGS AND ANTON AIRFOOD, INC.FORFOOD AND BEVERAGE CONCESSIONS AT THE PALM SPRINGS INTERNATIONAL AIRPORT. I HEREBY CERTIFY that this Minute Order,approving a Lease Agreement between the City ofPahn Springs and Anton Airfood,Inc.for food and beverage concessions at the Palm Springs International Airport,was adopted by the City Council of the City of Palm Springs, California,in a meeting thereof held on the 20"day of October 1999. PATRICIA A. SANDERS City Clerk I I I