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Home My WebLink AboutSS3 - Newport Pier Study - PowerPointiTi i ►� : - , • • i ILV Newport Pier: Economic Evaluation & Highest /Best Use Presented to City Council November �I 26, 2013 0 s, aTITSTON 1 NEWPORT PIER K 6 4? yst� �.•„ ! _ ' {tot Noltl• �_ �MIIiK.iJ t• Dntions to Considv Remodel Replace Remove Assessment of building and systems identified major utility, accessibility, and refurbishment work is required prior to re- tenanting building Anticipated ±$400,000. repair costs Tenant Improvement Cost, Approx $150,000. :me "s 1r �I Malceiling tein kitchan •l2[• Engaged GRC Assoc. to Survey piers in California. Comparison of business uses and revenue. Determine highest and best use. vnvr 1 -8 i Crux `Wool, 'Salinas ,54awfiery ss ® N.. 4 .,n•o u. tM NammoN \ - M i,l NwcM ,t '�� \os \cols C�n, Ntlee rl.p;e o+ 1 llsnonn P:. AOMPOC a�W 'Q Visalia ' LIFORNIA ` CALIFORNIA PIERS SURVEYED \ Noun Ai, Fort. Ran& newda Its 1 SF Pier 47 sae 2 SF Pier 43/45 3 SF Pier 39 4 SF Pier 15/17 Death Valley (0) `r 5 SF Pier National Park 6 SF Pier Po 7 SF Pier 28 -.� 8 SF Pier 14 9 Pacifica 10 Santa Cruz 11 Sea CI'rff (Aptos) ,Rdlgest 12 Monterey Otr. n Bakersfield Q 13 Old Fisherman's Wharf camom. (Monterey) .Taft ',Ory 14 San Simeon anawq ^ -- .©j IS Los Cayucos I sJ�ar��t 16 Hanford Pier Lancaste 17 Cal Poly (Avila Beach) Palmdale / 18 Avila so Santa Victornlle a •Aa' tlarita 19 Pismo Beach T. 20 Goleta A "Ie5 Ont .Pal 21 Stem's (Santa Barbara) IVerside TO "a 22 Ventura Co. Vann 23 Port Hueneme Santa Ana ,Nome Ind. 24 paradise Cove (Malibu) ss Poe 25 Malibu Una Temecula Oµ N�Que 26 Santa Monica s 27 Venice Oc anside C, 28 Manhattan Beach • r condido 29 Hermosa Beach ppp BC 30 Redondo Beach Saf�l DIEgO 31 Cabrillo (San Pedro) North 32 Belmont (Long Beach) 33 Seal Beach 34 Huntington Beach 35 Newport 36 Balboa 37 Dana Harbor 38 San Clemente 39 Oceanside 40 Scripps (La Jolla) 41 Crystal (San Diego) 42 Ocean Beach (San Diego) 43 Imperial NnN� O Pier Uses include: Recreation (fishing /pedestrian) Restaurants (snack shop, fast food, full - service) Entertainment and Retail (bait, other retail) Research, aquarium, museum, education Industrial Commercial fishing Rental cottages Use of Piers by Primary Category 2% 38% 5%2% WAquarium N Dining /Shopping /Entertaining u Fishing /Pedestrian ■ Hotel W Industrial - Commercial Fishing u Research /University —' Restaurant (38 %) Restaurant is most common type of business located on pier Vacancy at piers is rare, 4 spaces since November 2012: Newport Pier — lease expired Seal Beach Pier — lease dispute with Ruby's Diner, closed after 25 years Malibu Pier — Ruby's Diner closed, lease with new tenant pending Harford Pier — cafe closed after summer season -el 1 -111 • , , "@I HE T Selection of 13 piers with comparable demographic data (including population, race - ethnicity, median age, median household income, and average household size) Newport Pier Balboa Pier Huntington Beach Pier Seal Beach Pier San Clemente Pier Manhattan Beach Pier Malibu Pier Santa Monica Pier Oceanside Pier Ocean Beach Pier Imperial Beach Pier Pismo Beach Pier Pacifica Municipal Pier :I i:r: U0 Restaurants have highest annual taxable sales per store (within one - quarter mile radius of selected comparable piers) Summary of fvlajor Retail Categories One-Quarter Mile RadiLIS of the 13 Selected Piers Restaurants 305 $911,092 Food Stores 42 $727,036 General Merchandise 5 $511,280 Apparel 166 $371,163 Other Retail 543 $169,571 Furniture and Appliances 68 $75,2231 Total Retail 1,129 $432,398 Source: 6RCAssociates, Inc.,, Septemher20I3 Average Annual Taxable Sales Per Restaurant One - Quarter Mile Radius of the 13 Selected Piers Santa Monica Pier 7 $3,480,171 Manhattan Beach Pier 51 $1,304,125 Newport Pier 20 $1,246,750 Huntington Beach Pier 43 $1,151,772 Pismo Beach Pier 16 $1,068,863 San Clemente Pier 16 $938,950 Seal Beach Pier 19 $635,895 Oceanside Pier 27 $626,715 Malibu Pier 7 $611,029 Ocean Beach Pier 52 $600,360 Balboa Pier 30 $408,317 Imperial Beach Pier 11 $259,818 Pacifica Pier 6 $136,450 Average $826,637 Source: Se a dary infarmation compiled by GRC Associates, Inc., September 2013 [Restaurant size, type, and concentration of alcohol licenses within one - quarter mile radius of pier contributes to the variation between Newport and Balboa Piers' average annual taxable sales.] ■r. J c *VA IAm Summary of Per Capita Taxable Retail Sales - 2011 Motor Vehicle and Parts Dealers $1,419 $1,896 $5,863 Food Services and Drinking Places 1,457 1,788 4,619 Clothing and Clothing Accessories Stores 788 1,039 2,752 General Merchandise Stores 1,283 1,566 1,987 Gasoline Stations 1,470 1,584 1,557 Food and Beverage Stores 628 653 1,174 Bldg. Matrl. and Garden Equip. and Supplies 694 744 533 Furniture and Home Furnishings Stores 247 298 505 Electronics and Appliance Stores 381 761 Health and Personal Care Stores 274 293 ` Sporting Goods, Hobby, Book, and Music Stores 282 361 ` Miscellaneous Store Retailers 457 544 ' Nonstore Retailers 82 151 " Total Per Capita Retail Sales $9,453 $11,679 $20,785 • Data riot available due tosmali sample size and confidentiality- Source: State Barad of Equolizot +on, August 2013 0101611 MOM MLTr.i 19 roil to Highest /Best use based is a RESTAURANT. A full service restaurant at the pier location would have an annual taxable sales of $1.2M to $1.6M, or $300 to $400 sf /year. With rent at 7% of gross sales or $2.25 sf /month, estimated revenue to the City is $102,000 to $112,000 /year. Mr. iAie ire Adel NO • Solicit proposals from qualified restaurant tenants. Contribute funds to the proje contribution to approximately or a high of $300,000. ct. Limit the City's 50% of project cost 3, Selection of tenant will be based on: a) Qualification /Experience b) Credit Worthiness c) City's Contribution d) Theme /Menu I ' 11 • Total Revenue (10- Year): Net Present Value (NPR): Return on Investment (ROI): Internal Rate of Return (IRR): $1,067,480 $747,940 256% 30% $1,067,480 $847,940 434% 45% $1,067,480 $947,940 967% LOOM MDr. Approx. Cost to Replace ................$1,800,000 Challenges Coastal Commission Approval. Lost revenue until building is built. 10- Years: NPV (519,000); ROI -28 %; IRR -5% Benefits Opportunity for pier maintenance. Approx. Cost to Remove ................$50,000 Challenges Coastal Commission Approval Benefits Larger pier area for fishermen Possible use of gourmet food More room for special events; and the public; trucks; Opportunity for pier maintenance. Options 1. Questions?