HomeMy WebLinkAbout1/19/2000 - STAFF REPORTS (16) DATE: January 19, 2000
TO: City Council
FROM: Deputy Director of Aviation -Administration via Director of Aviation
TERMINAL CONCESSIONS DEVELOPMENT PROGRAM(TCDP)-ANTON AIRFOOD,INC.
RECOMMENDATION:
It is recommended that the City Council approve lease agreement revisions for a percentage
rental adjustment to the minimum ammaI guarantee for Anton Airfood, Inc., the Food and
Beverage Concession Operator at Palm Springs International Airport (PSP), during the
construction phase of the terminal concessions development program.
BACKGROUND:
On October 20, 1999 City Council approved minute order no. 6509 approving a lease
agreement between the City of Palm Springs and Anton Airfood, Inc. (AAI) for food and
beverage concessions at PSP. Due to extensive negotiations between both parties,the City
still does not have a signed and executed lease agreement. A Letter of Understanding is in
place where both parties agree to continue to work in good faith toward the development of
a final agreement for AAI to provide and construct improvements as required for the purpose
of operating Food & Beverage Concessions Facilities at PSP effective November 1, 1999
for aperiod up to six(6)months at the Airport's discretion. Airport staff,with the assistance
of the City Attorney, continues to work closely with AAI to resolve all issues related to the
execution of this agreement.
AAI has requested that the Airport allow a percentage rental adjustment to the minimum
annual guarantee of$72,000 a year during the renovation and construction period. The
justification for this adjustment is related to the reduced revenue expected when the main
restaurant and bar will be closed in order to renovate and reconstruct this leasehold area.
Similar consideration was adopted in the agreement with The Paradies Shops for retail
concessions for the same reason.
The proposed language revisions are as follows:
2. RENT. Tenant agrees to pay the following rents payable monthly in arrears on or
before the twentieth (20`h) day of the month. Tenant shall pay to City for each accounting
year the Minimum Annual Rent Guarantee or the Percentage Rent, whichever is greater
(collectively"Annual Rent"), except that beginning upon the Commencement Date and
continuing until the date in which the last new store opens for business, but no later
than August 1 2000, Tenant shall pay the Percentage Rent and the Minimum Annual
Rent Guarantee shall not apply.
2.1 Minimum Annual Rent Guarantee. Beginning upon the opening for business of
the last new store, but no later than August 1, 2000, the minimum Annual Rent for the
Lease Area shall be SIX THOUSAND AND 00/100 DOLLARS ($6,000.00)per month for
the first year of the Initial Tern ("Minimum Annual Rent Guarantee"). Thereafter, and
beginning on the first anniversary following the Corrnnencement Date, which
Commencement Date shall be November 1,1999,and each year thereafter,in accordance
with Section 3 entitled 'Revision of Rents", the minimum annual rent shall be adjusted
pursuant to said Section 3.
With the adoption of these revisions, it is expected that AAI will sign the agreement and
move forward with their proposed construction plans and improvements estimated at
approximately$2.2 million dollars. 15W
Palm Springs Int'l Airport
Anton Airfood, Inc. - TCDP
Page -2 /00�
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The Airport Commission,on their January 5,2000 meeting,unanimously recommended City
Council approval of these lease agreement revisions as indicated.
Approved:
B�IFRY FF �✓L IER�I;A-bDL
Deputy/Director of Aviation- Administration Director of Aviation
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Approved:
r�+ �--- City Manager
Attachment: (1) Minute Order
MINUTE ORDER NO. (�9
APPROVING LEASE AGREEMENT REVISIONS FOR A
PERCENTAGE RENTAL ADJUSTMENT TO THE MINIMUM
ANNUAL GUARANTEE FOR ANTON AIRFOOD, INC., THE FOOD
AND BEVERAGE CONCESSION OPERATOR AT PALM SPRINGS
INTERNATIONAL AIRPORT,DURING THE CONSTRUCTION PHASE
OF THE TERMINAL CONCESSIONS DEVELOPMENT PROGRAM.
I HEREBY CERTIFY that this Minute Order approving lease agreement revisions for a percentage rental
adjustment to the minimum annual guarantee for Anton Airfood, Inc., the food and beverage concession
operator at Palm Springs International Airport, during the construction phase of the terminal concessions
development program, was adopted by the City Council of the City of Palm Springs,California,in a meeting
thereof held on the 19th of December, 2000.
Patricia A. Sanders
City Clerk
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