Title
Introduction of Ordinance Approving a Lease and Authorizing the Acting City Manager to Execute Documents Necessary to Implement the Terms of the Lease with Play House, LLC for Ten Years with One Five-Year Renewal Option in the Historic Alameda Theatre, Located at 2319 Central Avenue. [In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under the CEQA Guidelines Section 15301(c) - Existing Facilities.] [Requires Four Affirmative Votes] (Community Development 227)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Acting City Manager
Re: Introduction of Ordinance Approving a Lease and Authorizing the Acting City Manager to Execute Documents Necessary to Implement the Terms of the Lease with Play House, LLC for Ten Years with One Five-Year Renewal Option in the Historic Alameda Theatre, Located at 2319 Central Avenue
BACKGROUND
Burgermeister Management, Inc. (Burgermeister) had occupied a portion of the Alameda Historic Theatre (the Theatre) since 2007, under a lease with the City which was set to expire May 31, 2018. Burgermeister has decided to discontinue its operations at the Theatre and has opted to terminate its lease.
Play House LLC, dba Director’s Cut (Director’s Cut) is a California limited liability company and proposes to operate a family-friendly, sit-down restaurant. Director’s Cut anticipates occupying the premises vacated by Burgermeister under a license agreement, which will terminate once this lease commences (estimated June 1, 2018).
DISCUSSION
In July 2006, the former Community Improvement Commission of the City of Alameda acquired the Historic Alameda Theater, a 1930s movie palace with approximately 2,550 square feet of leasable retail space. Burgermeister occupied approximately 1,851 square feet of that leasable retail space since 2007, operating a gourmet hamburger business. In late 2017, Burgermeister contacted the City to discuss its lease and different options regarding business terms and the possibility of opting out of its lease. As of January 2018, Burgermeister ceased operations at its Alameda location and informed the City that Director’s Cut was interested in occupying the space it was vacating.
Director’s Cut will operate a family-friendly, sit-down restaurant serving nutritious kids’ dishes and all natural food, free of nitrates, phosphates or preservatives, antibiotics and hormones. The owners of Director’s Cut have restaurants in San Francisco, including Cup A Joe Coffeehouse, Hcafe, and Acme Burgerhauss.
The proposed lease is for ten years with one five-year option to renew. Under the proposed lease the base rent will begin at $6,530.50 per month. Director’s Cut will also be required to provide a security deposit in the amount of $13,061 and the two members of Play House, LLC will be required to sign a personal guaranty of the lease. The new lease agreement contains the standard insurance, indemnity, assignment and termination clauses the City of Alameda requires in all its leases.
Key terms are summarized below:
|
Terms |
Alameda Historic Theatre |
|
Square Footage |
Approximately 1,851 |
|
Uses |
Restaurant with service of alcoholic beverages to persons over 21 years of age. |
|
Length of Term |
120 months |
|
Renewals |
One (1) 5-year extension option |
|
Security Deposit |
$13,061.00 |
|
Monthly Base Rent |
$ 6,530.50 - $8,272.64 |
|
1-12 |
$6,530.50 |
|
13-24 |
$6,726.42 |
|
25-36 |
$6,928.21 |
|
37-48 |
$7,136.05 |
|
49-60 |
$7,350.14 |
|
61-72 |
$7,570.64 |
|
73-84 |
$7,797.76 |
|
85-96 |
$8,031.69 |
|
97-108 |
$8,272.64 |
|
109-120 |
$8,520.82 |
FINANCIAL IMPACT
Revenues from the leases will be deposited into the Commercial Revitalization Fund (Fund 227).
ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under the CEQA Guidelines Section 15301(c) - Existing Facilities.
RECOMMENDATION
Introduce an Ordinance approving a ten-year lease with one five-year renewal option with Playhouse, LLC, a California Limited Liability Company, dba Director’s Cut for a portion of the Historic Alameda Theatre located at 2319 Central Avenue and authorizing the Acting City Manager to execute documents necessary to implement the terms of the lease.
Respectfully submitted,
Debbie Potter, Community Development Director
By,
Nanette Mocanu, Assistant Community Development Director
Financial Impact section reviewed,
Edwin Gato, Acting Finance Director
Exhibits:
1. Aerial Map of Premises
2. Premises
3. Lease