HomeMy WebLinkAbout3/16/2011 - STAFF REPORTS - 5B Jay Thompson
From: Thomas Ledwith [thomas_m_ledwith@yahoo.com]
Sent: Thursday, March 17, 2011 8:57 AM
To: Ginny Foat; Rick Hutcheson; Rick Hutcheson; Lee Weigel; Chris Mills; Steve Pougnet
Cc: David Ready; Jay Thompson; mariecar.mendoza@thedesertsun.com.
Subject: City Council OK CASH to DT RESTARANTS!!
To All,
What is up with the City Council giving BIG HAND OUTS to
Restaurants To OPEN UP Sooner or later? I hope the CITY Council
needs to "RETHINK" this matter.
I hope to get a reply soon.
Thomas M Ledwith
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3/17/2011
-a -
Jay Thompson R E C E1 V E u
From: Roxann Ploss [riploss@gmail.com]
Sent: Monday, March 14, 2011 9:32 AM 2011 MAR 14 AM 9: 21
To: Steve Pougnet; Rick Hutcheson; ginny foat; Chris Mills; Lee Weigel; Jay Thompsg)6 H E S "r rt Q h is(. ref.
Subject: City Council agenda CITY CLERK
En re: this week's agenda
ITEM 5B. A REMODEL INCENTIVE AGREEMENT, GRANTING $100,000
TO RESTAURATEUR GERALD KELLER FOR THE REMODELING OF THE
FORMER ATLAS/COPYKATZ RESTAURANT AT 200 SOUTH PALM
CANYON
Gerald Keller, the owner of Acqua Pazza restaurant at The River in
Rancho Mirage is seeking a $100,000 grant from the City to help with the
transformation of the old Atlas nightclub space into "Lulu, A California
Bistro." The City's current incentive plan has a $25,000 maximum
allocation. The staff is recommending approval of the request. Although
the proposed resolution says the City will "not be obligated" to pay the
grant if the restaurant is not opened by May 31, 2011, the wording does
not prevent the funds from being disbursed in the event the desired
target date is not met.--
Given our current fiscal situation and the recent experience with DHS
(and their concert-that-never-was), it seems unconscionable to offer
Mr. Keller $100,000. Once upon a time, business people did not
open businesses unless and until they could afford to do so.
Nationwide, we have seen money flung about with great abandon only
to see it flushed down the drain. . . . .either through foreclosure,
bankruptcy or never getting off the ground at all.
$75,000 (the difference between the stated maximum and what the
staff is suggesting) is certainly the salary of one of those individuals
the City laid off this past year. $25,000 certainly should get him
started in his renovations (personally, I wouldn't even "grant" him
that amount); if not, then he cannot afford to open and, more
importantly, successfully RUN a new enterprise in that location.
Opening at the end of May almost ASSURES the owner of low income
1/14/2011
for the following four months. Can he cover that? Can he keep staff
employed throughout the summer? Or is he planning to do a "soft opening".
and keep minimal hours/staff for the summer?
I think $100,000 is an indefensible amount of money.
Roxann Ploss
3/14/2011
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CITY COUNCIL STAFF REPORT
DATE: March 16, 2011 NEW BUSINESS
SUBJECT: APPROVE A REMODEL INCENTIVE AGREEMENT WITH VENCE
VENTURES, LLC, ON BEHALF OF LULU CALIFORNIA BISTRO,
LOCATED AT 200 SOUTH PALM CANYON DRIVE, IN THE AMOUNT
OF $100,000
FROM: David H. Ready, City Manager
BY: Community & Economic Development Department
SUMMARY
The redevelopment of the property located at 200 South Palm Canyon, once the B.
Lewin Gallery and later Muriel's, then Atlas and later Copykatz, has been a priority of
the City for the past several years. While it is located on one of the busiest corners in
downtown, on a block with several of the most successful restaurants in the desert,
including Las Casuelas Terraza, Kaiser Grill, LG's Steakhouse, The Chop House and
Zin Bistro, the building has been in decline with businesses failing, and has remained
vacant for the past several years.
Gerald Keller, owner of Acqua Pazza in Rancho Mirage ("Owner"), is in the process of
purchasing and renovating the entire 22,000 s.f. building to develop a first quality
California Bistro. This Remodel Incentive Agreement ("Agreement") is intended to
provide an incentive for the Owner to expedite the build-out of the restaurant in order to
be open this Spring, rather than at the end of 2011. While the amount is at a level
higher than the $25,000 maximum established under the Interior Remodel Program, it is
commensurate with the significant scale of the remodel, the condition of the property
today, and the importance of the location and building.
The Property has been vacant for more than two years and is in considerable disrepair,
and Owner proposes to spend over $1,000,000 in renovating and furnishing the
restaurant. The Owner has requested assistance from the City since last fall,
during the negotiation for the building, and has demonstrated to the City that the
additional costs of expediting the remodel of the Property by May 31 would be
nearly $300,000 above the baseline remodel costs to make interior improvements
to the Property by the end of the year.
The Agreement provides that, if the project is completed by the deadline date, the City
would reimburse the Owner for $100,000 of the additional costs incuried in expediting
ITEM NO. .G1L�
City Council Staff Report
March 16, 2011 -- Page 2
LULU California Bistro Agreement
the project. The Owner had actually requested significantly more funds last fall, with the
initial request, and was hoping to receive $150,000 through this agreement. The policy
objective of the City in entering this Agreement is to maintain the positive momentum in
downtown, as well as see the creation of the 100 or so jobs earlier in the year rather
than waiting until December. Opening sooner also gives the City six or seven months
worth of additional sales tax from the business. For the Owner, opening in April or May
is less appealing than the end of the year because of the additional labor and materials
costs, as well as the anticipated slower traffic throughout the summer, which means it
will take longer to recover the additional costs. The City would not be obligated to make
any payment if the Owner fails to complete the project and secure a certificate of
completion and be open for business and operating by the May 31, 2011 deadline.
RECOMMENDATION:
1. Adopt a Resolution authorizing the approval of a Remodel Incentive Agreement
with Vence Ventures, LLC for LULU California Bistro, located at 200 South Palm
Canyon Drive, in the amount of$100,000.
STAFF ANALYSIS:
Gerald Keller, owner of Acqua Pazza in Rancho Mirage, is in the process of purchasing
and renovating the building to develop a first quality California Bistro at the property
located at 200 South Palm Canyon, which was once the B. Lewin Gallery and later
Muriel's, then Atlas and later Copykatz. The property is located on one of the busiest
corners in downtown, but for much of the past nine years the building has been in
decline with failing businesses, and has remained vacant for the past several years.
The vacancy of the building became a touchstone in the image of downtown as being
rife with vacant stores.
This Remodel Incentive Agreement ("Agreement") is intended to provide an incentive for
the Owner to expedite the build-out of the restaurant in order to be open this spring,
rather than at the end of 2011. While the amount is at a level higher than the $25,000
maximum established under the Interior Remodel Program, it is commensurate with the
significant scale of the remodel, the condition of the property today, and the importance
of the location and building.
It also covers part of the cost of "fast-tracking" the project through the design, approval,
and construction process including the expedited ordering of special building materials
and furnishings, and pushing contractors to complete tasks quickly. Overall, expediting
the project would add 21% to the overall materials costs (which does not include
operating supplies) and 32% to the construction/labor expenditure.
The Agreement provides that, if the project is completed by the deadline date, the City
would reimburse the Owner for $100,000 of the additional costs incurred in expediting
the project. The Owner had actually requested significantly more funds last fall with the
F..
City Council Staff Report
March 16, 2011 -- Page 3
LULU California Bistro Agreement
initial request, and was hoping to receive $150,000 through this agreement. The policy
objective of the City in entering this Agreement is to maintain the positive momentum in
downtown, as well as see the creation of the 100 or so jobs earlier in the year rather
than waiting until December. While opening sooner will not be as profitable for the
Owner, they hope to have good sales through the off-season based on their current
experience in the desert, and it also gives the City six or seven months worth of
additional sales tax from the business. For the Owner, opening in April or May is less
appealing than the end of the year because of the additional labor and materials costs,
as well as the anticipated slower traffic throughout the summer, which means it will take
longer to recover the additional costs. Though the City is eager to get a high quality
restaurant on this prominent corner in downtown Palm Springs, it would not be obligated
to make any payment if the Owner fails to complete the project and secure a certificate
of completion by the May 31, 2011 deadline.
The concept of LULU California Bistro is based on the continuing success of Acqua
Pazza at The River in Rancho Mirage, another restaurant owned by Mr. Keller. The
same large value-priced menu and quality food and drinks provide the basis for another
very successful restaurant, especially in an area of downtown that is already an
established dining destination. Their experienced staff is looking forward to this new
opportunity. Despite the difficult financial times, Acqua Pazza, due to its menu, food,
drinks, service and value, has grown every year for the last six years.
While the building is dilapidated from the transition from tenant to tenant, it needs very
few structural or system repairs. It has two complete cooling systems, swamp-cooling
or air conditioning, providing excellent savings on utility bills. Its layout offers
substantial street-side seating, a must on South Palm Canyon Drive, an impressive bar
visible from the street, and has the capacity to hold more than three hundred people.
The upstairs is perfect for private parties and could host bus tour groups going to the
Palm Springs Follies and other theatres, and the many varied events and conventions in
Palm Springs.
This design team has prepared plans for submittal to the City. Below is a list of the
team working to create LULU:
David Christian, architect and designer, was the original architect of the first
restaurant, Muriel's Nightclub, that went into this building approximately ten years
ago.
• Jeff Jurasky, interior designer, also designed the interior for Acqua Pazza and
will be responsible for the design of the new bar, tables, chairs, carpets and
overall feel and look of the restaurant.
City Council Staff Report
March 16, 2011 -- Page 4
LULU California Bistro Agreement
• Gary Wexler, advertising and graphic designer, conceived the name, LULU, and
has already developed graphics for it. He will be involved in signage, menus, and
promotion.
• Desert Habitat, built out Acqua Pazza and will be responsible for overseeing the
construction of all areas of LULU, including painting, building the new bar, interior
separation walls, booths, all electrical, plumbing, etc.
In terms of renovations, the restaurant will need a complete new kitchen as much of the
kitchen equipment has been removed by the previous tenants. The performance stage
will be removed and the downstairs bar, which was a focal point of Muriel's but later
removed, will be replaced in its original location. Many of the solid curved walls on the
second and third levels will be replaced with glass, increasing visibility throughout the
restaurant and "opening up" the space. The upstairs bar, which was added after
Muriel's, will be removed. Signage will be added to the building's exterior:
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.1FORNIA BISTRO
This Agreement is in the amount of $100,000, but is commensurate with the significant
scale of the remodel, the condition of the property today, and the importance of the
location and building. As an incentive payment, the City would not be obligated to
make any payment if the Owner fails to complete the project and secure a certificate of
completion and is open for business and operating by the May 31, 2011 deadline.
FISCAL IMPACT:
Funds are available in the Economic Recovery Fund in Economic Development.
�ohn a j nd, Director Tom Wilson A "sistant City Manager
tea---
David H. Ready, Esg. P I y Manager
Attachments: Resoution
Agreement
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, AUTHORIZING THE APPROVAL
OF A REMODEL INCENTIVE AGREEMENT WITH VENCE
VENTURES, LLC IN THE AMOUNT OF $100,000 FOR THE
REDEVELOPMENT OF A PROPERTY AT 200 SOUTH PALM
CANYON DRIVE, KNOWN AS LULU CALIFORNIA BISTRO
WHEREAS, the City of Palm Springs ("City") has established a number of Remodel
Grant Programs and other incentive programs for Owners and Tenants of commercial-
retail businesses in the City of Palm Springs to promote economic activity during the
recession and slow economic recovery; and
WHEREAS, the Vence Ventures, LLC ("Owner") is the purchaser and current tenant of
a real property located at 200 South Palm Canyon Drive, Palm Springs, ("Property"),
otherwise known as LULU California Bistro; and
WHEREAS, the Property has been vacant for more than two years and is in
considerable disrepair, and Owner proposes to spend over $1,000,000 in renovating
and furnishing the restaurant; and
WHEREAS, the Owner has demonstrated that the additional costs of expediting the
remodel of the Property by May 31 would be nearly $300,000 above the baseline
remodel costs to make interior improvements to the Property by the end of the year and
given the additional expense of expediting and the opening so close to the slower
summer season, there exists considerable disincentive to the Owner to move quickly at
increased expense to open the restaurant sooner; and
WHEREAS, the City desires to enter this Agreement is to maintain the positive
momentum in downtown, as well as see the creation of the 100 jobs earlier in the year,
rather than waiting until December. Opening sooner also gives the City an additional
six of new sales tax from the business which will offset a portion of the incentive
payment; and
WHEREAS, prior to any disbursement under the terms of the Agreement,
Owner/Tenant shall apply for and receive all necessary approvals from the City's
Planning, Building or Engineering Departments and other State and County agencies
and shall have completed work on the Property sufficient to receive a Certificate of
Occupancy, and be open and operating for business;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Palm
Springs, as follows:
SECTION 1. The Remodel Incentive Agreement between the City of Palm
Springs and Vence Ventures, LLC is hereby approved
Resolution No.
Page 2
SECTION 2. This Project is Categorically Exempt under Section 15301 of the
California Environmental Quality Act.
SECTION 3. The City Manager is authorized to execute all documents related to
this Agreement.
ADOPTED THIS T" DAY OF MARCH, 2011.
David H. Ready, City Manager
ATTEST:
James Thompson, City Clerk
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. is a full, true and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on April 7, 2010, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
A L M sA�
CITY OF PALM SPRINGS
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REMODEL INCENTIVE AGREEMENT
THIS INCENTIVE GRANT AGREEMENT (the "Agreement") is made and entered into
this day of , by and between the City of Palm Springs, ("City"), and Vence
Ventures, LLC the ("Owner"). Collectively the City and Owner are referred to as the
Parties.
RECITALS
A. City has established a number of Remodel Grant Programs and other incentive
programs for Owners and Tenants of commercial-retail businesses in the City of
Palm Springs to promote economic activity during the recession and slow
economic recovery.
B. Owner is the purchaser and current tenant of a real property/business located
within the eligible area at 200 South Palm Canyon Drive, Palm Springs,
("Property"), otherwise known as LULU California Bistro.
C. The Property has been vacant for more than two years and is in considerable
disrepair, and Owner proposes to spend over $1,000,000 in renovating and
furnishing the restaurant.
D. Owner has demonstrated that the additional costs of expediting the remodel
of the Property by May 31 would be nearly $300,000 above the baseline
remodel costs to make interior improvements to the Property as described in
Exhibit "B," Scope of Work, by the end of the year.
E. Given the additional expense of expediting and the opening so close to the
slower summer season, there exists considerable disincentive to move
quickly at increased expense to open the restaurant sooner.
F. The City desires to enter this Agreement is to maintain the positive momentum
in downtown, as well as see the creation of the 100 jobs earlier in the year,
rather than waiting until December. Opening sooner also gives the City an
additional six of new sales tax from the business which will offset a portion of the
incentive payment.
G. Prior to any disbursement under the terms of this Agreement, Owner shall apply
for and receive all necessary approvals from the City's Planning, Building or
Engineering Departments, which are shown in Exhibit "C", Evidence of Approval,
and shall have completed work on the Property sufficient to receive a Certificate
of Occupancy. The business shall be open and operating.
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H. The City has reviewed the project scope, the evidence of financial participation
by Owner, the location of the Property, and the approvals, and has approved the
Application.
NOW, THEREFORE, in consideration of the promises and mutual agreements
contained herein, City agrees to grant to Owner the amount of $100,000 and Owner
agrees to undertake the approved improvements, under the following terms and
conditions:
AGREEMENT
1 . Property Ownership/Right to Undertake Work. Owner represents that it is
the Owner of the Property or holds Tenancy in the Property which entitles it
to undertake interior physical improvements to the Property.
2. Schedule. The Parties agree that all interior improvements shall be completed
within 90 days of the date of this Agreement, but no later than May 31, 2011.
The City would not be obligated to make any payment if the Owner fails to
complete the project and secure a certificate of completion and be open for
business and operating by the May 31, 2011 deadline.
3. Contractor. The Parties agree that Owner has sole responsibility for
choosing and hiring the contractor, which shall be shown in Exhibit "D",
Contractor/Vendor Agreements, and the acceptance of the material used and
the work performed is Owner's responsibility, and the City is not a party to any
agreement with the vendor or contractor and does not guarantee the quality of
workmanship of the property improvements, nor have any liability whatsoever
therefor. At all times hereunder, the Contractor shall have a valid City of Palm
Springs Business License.
4. Design Approval and Permits. The Parties agree that Owner has sole
responsibility for obtaining design approval and evidence of required permit
approvals from the City of Palm Springs as shown in Exhibit C, and ensuring
the compliance with those permits.
5. Grant Limitations. The maximum City matching grant shall not exceed
$100,000.
6. Evidence of Completion and Operation. The Parties agree that the City will
release the Grant funds upon the completion of the work by the Owner or his
contractor. Evidence of completion shall include but is not limited to:
photographs of the finished work; a final inspection by a representative of the
Remodel Incentive Program
Page 2
City of Palm Springs; and, a copy of the final invoice for the work completed and
proof of payment to the contractor. The business must also be open and
operating.
7. Release of Liens. The Parties Agree that the Owner is responsible for obtaining
the release of any Mechanics Liens or other liens placed upon Owner's property
by any contractor or subcontractor hired under this program.
8. Maintenance. Owner agrees and covenants that, after the City issues its
Certificate of Completion, Owner shall be responsible for maintenance of all
improvements that may exist at the Property from time to time, including without
limitation buildings, parking lots, lighting, signs, and walls in first-class condition
and repair, and shall keep the Property free from any accumulation of debris or
waste materials. Owner shall also maintain all landscaping required pursuant to
Property's approved landscaping plan, if any, in a healthy condition, including
replacement of any dead or diseased plants with plants of a maturity similar to
those being replaced. Owner hereby waives any notice, public hearing, and
other requirements of the public nuisance laws and ordinances of the City that
would otherwise apply.
MISCELLANEOUS PROVISIONS
9. Covenant Against Discrimination. Owner covenants that, by and for itself, its
heirs, executors, assigns, and all persons claiming under or through them, that
there shall be no discrimination or segregation in the performance of or in
connection with this Agreement regarding any person or group of persons on
account of race, color, creed, religion, sex, marital status, disability, sexual
orientation, national origin, or ancestry.
10. Notice. Any notice, demand, request, consent, approval, or communication
either party desires or is required to give to the other party or any other person
shall be in writing and either served personally or sent by pre-paid, first-class
mail to the address set forth below. Either party may change its address by
notifying the other party of the change of address in writing. Notice shall be
deemed communicated seventy-two (72) hours from the time of mailing if mailed
as provided in this Section.
To City: City of Palm Springs
Economic Development Administrator
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
Remodel Incentive Program
Page 3
To Owner: Gerald Keller
LULU Caifornia Bistro
200 South Palm Canyon Drive
Palm Springs, CA 92262
11. Integrated Agreement. This Agreement contains all of the agreements of the
parties and cannot be amended or modified except by written agreement.
12. Amendment. This Agreement may be amended at any time by the mutual
consent of the parties by an instrument in writing.
13. Severability. In the event that any one or more of the phrases, sentences,
clauses, paragraphs, or sections contained in this Agreement shall be declared
invalid or unenforceable by valid judgment or decree of a court of competent
jurisdiction, such invalidity or unenforceability shall not affect any of the
remaining phrases, sentences, clauses, paragraphs, or sections of this
Agreement, which shall be interpreted to carry out the intent of the parties
hereunder.
14. Indemnification. Owner shall indemnify and hold harmless, the City of Palm
Springs ("City") and the City, the City Council, the Agency Board of Directors, its
officers, agents, employees and independent contractors free and harmless from
any liability whatsoever based and asserted upon any act or omission of the City
for property damage, bodily injury, or death or any other element of damage of
any kind or nature, relating to or in any way connected with participation in the
Program.
15. Authority. The persons executing this Agreement on behalf of the parties
hereto warrant that they are duly authorized to execute this Agreement on behalf
of said parties and that by so executing this Agreement the parties hereto are
formally bound to the provisions of this Agreement. Owner certifies that the
above statements are true and accurate to the best of Owner's belief. Failure
to meet any of the terms of this Agreement shall result in the forfeiture of
any Grant funds from the City for this program.
Remodel Incentive Program
Page 4
i 6�
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates stated below.
"City"
City of Palm Springs
Date: By:
Community & Economic Development
Date: By:
Director, Community& Economic Development
Date: By:
David H. Ready, Esq., PhD.
City Manager
ATTEST: APPROVED AS TO FORM:
By: By:
James Thompson Douglas C. Holland
City Clerk City Attorney
"OWNER"
Date: By :
Date:
Remodel Incentive Program
Page 5
1�.
EXHIBIT "B"
SCOPE OF WORK
LULU Build-Out Items
Carpet--main upper floor & stairs 6,000 square feet
Floor Tile 4,500 square feet
Insulation-ceiling-
Square feet--egg crate & wedges 5,550 square feet
Wall tile--pearlescent glass 1,500 square feet
Insulation-wall
Glass partition to bar
Glass Walls upstairs
Ceiling-acrylic confetti clouds
Drapes- 460 yards
Drapes--valances, tracks, bases
Lit "dot' acrylic seating
Signs
Sprinklers
Lighting
Chandeliers & Wraps Ceiling; Wall; Drapery; Banquet Room; Below bar, etc.
Point of Sale System
Security Camera System
Telephone System/computers
Alarm/Security System
Televisions
Kitchen
Plans through health dept
Equipment
Special Flooring
Dishes, Cutlery, Glassware, etc.
Chairs
Bar chairs
Tables
Bar Tables
Banquettes & booths
Welcome desk
Remodel Incentive Program
Page 7
Construction
Bathrooms (4)
Mirrored Banquet Wall
New Staircase; move wall;
dining levels; ramp; bar; kitchen "trench"
Architect
Interior & Exterior Design
Art & Graphic Design
Electrical
Plumbing
HVAC
Remodel Incentive Program
Page 8
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