HomeMy WebLinkAboutS15 - Civic Center Concession Agreement w/24 Carrotsor
CITY OF
NEWPORT REACH
FOB'' City Council Staff Report
Agenda Item No. S15
April 23, 2013
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, City Manager
949 - 644 -3002, dkiff @newportbeachca.gov
PREPARED BY: Tara Finnigan, Public Information Manager
APPROVED: lk-Anl
" V
TITLE: Civic Center Concession Agreement With 24 Carrots, LLC
ABSTRACT:
The City of Newport Beach (City) issued a request for proposals (RFP) for food services
operations at the new Civic Center in November 2012. Four proposals were received by
the City. After a thorough review and selection process, staff is recommending approval
of a concession agreement with 24 Carrots, LLC to operate 'Bistro 24 Express" and
provide catering services at the Newport Beach Civic Center.
RECOMMENDATION:
1. Select 24 Carrots, LLC as the food services operator at, and caterer for, the
Newport Beach Civic Center.
2. Waive City Council Policy F -7 and authorize the City Manager to negotiate and
execute a Civic Center Concession Agreement based upon the key provisions
outlined in this staff report.
FUNDING REQUIREMENTS:
The concession is expected to bring in a base rent of $24,000 in year one with the
possibility of additional revenue through percentage rent. The base rent is scheduled to
increase every year Bistro 24 Express is in operation.
Civic Center Concession Agreement With 24 Carrots, LLC
April 23, 2013
Page 2
DISCUSSION:
Background
The Newport Beach Civic Center project included the addition of 17,000 square feet of
space to the Central Library. Within that additional space is a 757- square -foot; "grab
and go" cafe designed to serve library patrons, City Hall and park visitors, and
employees assigned to work at the new Civic Center.
Request for Proposals
On November 21, 2012 the City published RFP No. 13 -19 soliciting proposals for a food
services operator for the cafe space. Prior to the submittal deadline of January 9, 2013,
the City received proposals from the following: 24 Carrots (operating as Bistro 24
Express), The Coffee Connection, Mustard Cafe and Subway.
Selection Process
Staff members from the City Manager's Office, Finance Department and Community
Development Department evaluated each of the proposals through a multi -step
process. First, each member of the panel individually reviewed and evaluated each
proposal based upon an established set of technical criteria. Then, the panel
interviewed representatives from each of the proposing firms. During the interviews, the
proposers were asked to elaborate on their experience in food service operations, menu
offerings, catering abilities, and administrative structure. Three of the four proposers
emphasized the importance of the catering operation to the cafe site's viability and
expressed a strong desire in obtaining exclusive catering rights to the Civic Center
complex.
The panelists submitted separate scores for each proposal, based upon the established
criteria and interviews. The scores were combined, averaged and the vendors were
ranked accordingly. 24 Carrots received the highest score. Mustard Cafe was ranked
second.
Since there was only a 5% differential between the top two proposers (24 Carrots and
Mustard Cafe), the panel went on unannounced site visits to the nearest 24 Carrots and
Mustard Cafe locations to anonymously sample their food offerings and observe their
operations. This final step helped the panel distinguish the top two firms and affirmed
the determination that 24 Carrots is the most qualified firm to operate the cafe at the
new Civic Center.
Civic Center Concession Agreement With 24 Carrots, LLC
April 23, 2013
Page 3
Recommendation
24 Carrots, LLC possesses the qualifications and experience necessary to operate the
caf6 space and provide catering services to the variety of meetings and events that will
be held at the Civic Center. The panel believes 24 Carrots' Bistro 24 Express concept
offers menu items and price points that will be attractive to library patrons, Civic Center
and park visitors, event organizers and City employees. Finally, the experience and
support resources possessed by 24 Carrots will minimize the lead time needed to open
the cafe.
Proposed Agreement Provisions
The key provisions of the agreement are as follows:
Term - Five years, with two, five -year extension options
Rent (Years 1 through 5) - The greater of Base Rent or Percentage Rent as detailed
below.
Percentage Rent* Base Rent **
Year 1
8%
$24,000.00
Year 2
8%
$25,200.00
Year 3
8%
$26,460.00
Year 4
8%
$27,783.00
Year 5
8 %
$29,172.15
*Monthly rent, percentage of gross sales.
* *Upon each successive anniversary of the Effective Date of
the agreement, the Base Rent shall be increased five
percent (5 %).
Rent (Years 6 through 10) - The greater of Base Rent or Percentage Rent as detailed
below.
Percentage Rent
Year
10%
Year 7
10%
Year 8
10%
Year 9
10%
Year 10
10%
Base Rent (5% annual
increases
$30,630.75
$32,162.29
$33,770.40
$35,458.92
$37,231.87
Civic Center Concession Agreement With 24 Carrots, LLC
April 23, 2013
Page 4
Rent (Years 11 through 15) -The greater of Base Rent or Percentage Rent as detailed
below.
Percentage Rent
Year 11
10%
Year 12
10 %
Year 13
10%
Year 14
10%
Year 15
10%
Base Rent (5% annual
increases
$39,093.46
$41,048.14
$43,100.54
$45,255.57
$47,518.35
Catering Revenue - 13% for food and beverage and 5% for equipment rentals.
Based on gross sales.
Land Use Restrictions - 24 Carrots will adhere to the Special Land Use Restrictions
agreed upon by the City and The Irvine Company for the
Civic Center property as they pertain to the operation and
marketing of the cafe space. The City Manager will consult
with The Irvine Company prior to executing the concession
agreement to ensure compliance with the restrictions.
Hours of Operation - Monday through Thursday 7:00 a.m. to 8:00 p.m.
Friday 7:00 a.m. to 6:00 p.m.
Saturday 8:00 a.m. to 6:00 p.m.
Sunday 12:00 p.m. to 5:00 p.m.
(Hours subject to change with City consent based upon
business conditions.)
Catering - Subject to certain limitations (e.g., City Council meetings,
etc.), 24 Carrots shall have exclusive catering rights for
events held within the Civic Center.
Alcohol sales and service would be permissible at catered
events only with the City's prior written approval and the
applicable Alcohol Beverage Control license. Alcohol sales
are not permitted as part of the normal business operations
of the cafe space.
There was some initial concern at the staff level about the exclusive catering rights
provision. However, this vendor and others stressed that the viability of the business
activity is in question without site exclusivity. Additionally, using a single catering source
allows the City staff members who coordinate room reservations and event planning to
have a longer -term relationship with key catering personnel to help make events go
smoothly.
Civic Center Concession Agreement With 24 Carrots, LLC
April 23, 2013
Page 5
The staff review included evaluating various vendors' ability to effectively and flexibly
deliver a variety of catering services and menus, and staff believes that 24 Carrots is a
top quality respondent in that regard.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action was previously analyzed under the
Environmental Impact Report prepared for the Civic Center Project pursuant to the
California Environmental Quality Act ( "CEQA "). In either event, staff recommends the
City Council find this action qualifies for a Class 1 categorical exemption under CEQA
Regulation Section 15301 because it involves the leasing of interior space within an
existing public structure with negligible or no expansion of use beyond that existing at
the time of this determination.
NOTICING:
This agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers this item).
Submitted by:
Tara Finnigan
Public Information Manager