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HomeMy WebLinkAbout2006-06-21 STAFF REPORTS 2K OF PALM TA U c"qU FO R�\Pn City Council Staff Report DATE: June 21, 2006 Consent Calendar SUBJECT: BATTING CAGE/CONCESSION LEASE AT DEMUTH PARK FROM: David H. Ready, City Manager BY: Department of Parks and Recreation SUMMARY A Request For Proposal for the operation of the DeMuth Park batting cages and concession was sent out to 12 prospective bidders in March, with a due date for the proposals of April 11 . A nonmandatory site visit and walk-through were held on Tuesday, March 28, with three prospective bidders in attendance. The only bid received in Procurement and Contracting was from Palm Springs Batting Range, LLP (hereinafter "PSBR"). RECOMMENDATION: 1) Adopt Minute Order No. authorizing the City Manager to negotiate a lease agreement in a form acceptable to the City Attorney with Palm Springs Batting Range, LLP forthe operation of the batting cages and concession located at fields #7 and #8 in DeMuth Park. STAFF ANALYSIS: 'The batting cage facility at DeMuth Park has not been in operation since October 2004 when the City evicted the previous tenant for nonpayment of rent. Since that time, several attempts to secure an operator have been made through the Request For Proposal (RFP) process. Each of these attempts has been unsuccessful due to the condition of the facility and a general lack of interest on behalf of prospective operators in responding to the City's solicitations. The previous operator modified the main structure and constructed several buildings and other on-site improvements without proper permits. After eviction of the tenant, the City learned that the majority of these improvements were not constructed to code. This situation caused the City to modify the original RFP and seek operators willing to demolish the non-permitted improvements or, at least, bring them up to code. Item No. 2 . K . City Council Staff Report June 21, 2006 — Page 2 BATTING CAGE/CONCESSION LEASE AT DEMUTH PARK PSBR has estimated a business development expense of $211,700 to demolish certain existing non-compliant improvements and refurbish some of the existing site improvements for operation of the business at the site. PSBR will be installing mostly new equipment from the original manufacturer and will bring the remaining site fixtures and cage facility up to code through repairs to the monopole batting cage and installation of new pitching machines, along with landscaping and appearance upgrades to the site. The agreement also allows for improvements to the concession building at fields #7 and #8 within the first two years of the agreement to allow for on-site food preparation at the softball fields. The contractor's pro-forma indicates an investment of roughly$155,000 to the facility is needed to become operational ,with an additional $56,700 to cover other costs for the purchase of materials and supplies to operate the business. Staff has negotiated with PSBR for the facility's fixed rental rate and the cost of the improvements and is proposing the following: 1 . Contractor will bring the facility up to code and make all of the necessary repairs to have the batting cage and concession stand at fields #7 and #8 operational within six months. Staff expects these improvements to be completed much sooner, but the agreement will provide the operator ample time to complete the remodel in the event unforeseen challenges arise. Additionally, the agreement will require the operator to install the concession vent hood and grease handling units for the concession stand within the first two years of the agreement at the operator's estimated expense of$12,000. 2. The rental amount being proposed is $500 per month for the batting cage and concession facility beginning in year three of the agreement. Each year thereafter, beginning in January, the monthly rental amount will increase by$50. In comparison, the previous operator paid $350 per year to the City. :3. The term of the proposed lease agreement will be five years with two five-year extension options at the discretion of the City Manager. Because the City requires some modifications to the concession facility that total an estimated $12,000, staff has negotiated with PSBR to waive lease payments forthe first two years of the agreement in exchange for PSBR completing the upgrades. This enables the City to lease the batting cages facility, bring the concession stand up to code and do so without any direct out-of-pocket expense. City Council Staff Report June 21, 2006 — Page 3 BATTING CAGE/CONCESSION LEASE AT DEMUTH PARK Finance Director Approval FISCAL IMPACT: The City will receive rent in the amount of $500 per month or $6,000 per year beginning in year three of the contract. Thereafter, lease payments will be adjusted annually by$50 per month each January through the entire term of the agreement. ,A6�ott Mikesell, Director t TrAY Ntzlaff,, s ant City Manager Department of Parks and Recreation AdrNnJative e i es David H. Ready, City M�r� Attachments: Minute Order MINUTE ORDER NO, AUTHORIZING THE CITY MANAGER TO NEGOTIATE A LEASE AGREEMENT IN A FORM ACCEPTABLE TO THE CITY ATTORNEY WITH PALM SPRINGS BATTING RANGE, LLP FOR THE OPERATION OF THE BATTING CAGES AND CONCESSION LOCATED IN DEMUTH PARK AT FIELDS #7 AND #8. I, James Thompson, City Clerk of the City of Palm Springs, hereby certify that this Minute Order, authorizing the City Manager to negotiate a lease agreement in a form acceptable to the City Attorney with Palm Springs Batting Range, LLP for the operation of the batting cages and concession located in DeMuth Park at fields #7 and #8, was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 21st day of June, 2006. James Thompson, City Clerk