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Maxwell's Restaurant - Pier Plaza - Surfing Museum Options
to.'Z •/— �ry 1 f�-.�` _L?5,,.. REQUEST FOR CITY COUNCIUPARKING AUTHORITY ACTION June 7, 1993 Submitud ttO: Honorable Mayor and City Counc' "— - Submitted by: Aket Michael Uberuaga, City Administrato Prepared by: Ron Hagan, Director, Community Services �QppROVED BY CITY COUN Subject: MAXWELL'SIPIER PLAZAISURFIIG MUSE 19 Consistent with CouneN FWky? I I Yee I I MW PONVV or 601pdon ` ' Not +enR of heats, PkewimmWoOm�, Funding Sourae,Alwnwahe Aotio o. STATEMENT OF ISSUE In 1992, the City Council approved the master plan for the south beach improvements and the north of the pier parking lot; however, the City Council has not yet approved a plan for the Pier Plaza, the parking lots north and south of the pier, the rebuilding of Maxwell's by the Sea, or an option for the Surfing Museum. Since all of these projects depend on the option chosen for Maxwell's, the City Council asked staff to prepare cost estimates for each option and provide an analysis of each. Once Council decides on a design option and funding alternative for Maxwell's, the city can begin phased development of the beach master plan contingent upon entitlement approvals and available funding. RECOMMENDATIONS 1. Approve Option 1 for the rebuilding of Maxwell's at its current location; 2. Approve the funding alternative whereby WPL Industries, Inc. pays for the construction of the new restaurant and the City pays for the Pier Plaza; 3. Direct staff to proceed with the entitlement process for the beach master plan as , presented in Option I; w/ . '"`- Pi z;; ¢&4ft ' 4- a-- -Cv4." rt -r& 40-- .ems. &S-4 4. Direct oo negotiate and return to the City Council for approval of a new agreement with WPL Industries, Inc. ; 5. Approve the use of$3 million of unallocated COPs for the Pier Plaza and parking lot improvements; 6. Appropriate $350,000 from the Parking Authority fund balance for the consultant contract for the beach master plan with Purkiss-Rose &Associates for preparation of entitlement documents (beach master plan), site plans, cost estimates, and meetings with required agencies; and Pi r k l ?' c41ha r I� REQUEST FOR CITY GUUNCIL ACTION June 7, 1993 Page two 7. Instruct staff to obtain an independent financial review of the revenue and cost estimates for design option I and the funding alternative recommended by staff. ANALYSIS BACKGROUND - The current structure housing Maxwell's by the Sea restaurant was built in 1932 and is in need of major building, fire and health code improvements. In analyzing what to do with Maxwells, staff originally presented City Council with three options, one being to try and upgrade the existing structure. The minimum cost for that approach is $2 million and it was felt that such option would not resolve the problems of aesthetics, public access and desired restaurant operations. The issues that staff is trying to resolve with the Maxwell's and Pier Plaza projects are: A. Public health and safety and seismic improvements; B. Provide a Pier Plaza entryway onto the pier that is both pedestrian friendly and aesthetically pleasing that can be used for all of the various special events hosted by the city at the pier; C. Resolve parking and vehicle access problems currently existing in the parking lots north and south of the pier; and D. Provide a restaurant facility with full service dining amenities that would maintain the city's current revenue base and increase city revenue to pay the debt service for the COPs used for Pier Plaza and parking lot improvements. The current lease with WPL Industries, Inc. was approved April 1, 1983, for a term of twenty-five years with an option to extend, if tenant were not in default of the agreement, for an additional fifteen year period, making the existing agreement a forty year lease. There are currently thirty years remaining on the agreement. The lease agreement with WPL is favorable to the city in terms of the market rates for percentage rents. WPL pays the city 8 percent of gross receipts for up to $4 million, and 10 percent of gross receipts over $4 million. A check of other restaurant leases in marinas reveals the market rate to be between 4 to 7 percent of gross receipts. Paul Wimmer (WPL Industries) submitted a plan to the city for a new, full-service Maxwell's which would include a dinner house, entertainment area, outdoor seating area, and complete banquet facilities. This concept would be constructed on the exact footprint of the existing building and would eliminate the concessions currently under the restaurant. Since Dwight's and Sunny's beach concessions can offer the same services as Maxwell's sublease concessions, staff is in favor of Maxwell's being a full-service restaurant per the design submitted by WPL. The income proforma shows the full service facility is estimated to produce consistently more revenue than the existing facility. (Exhibit A) t REQUEST FOR CITY WUNCIL ACTION June 7, 1993 Page three The proposed restaurant could be constructed under two options. Option 1 would be to build it in the existing location, and Option 2 would be to build it 150 feet south of its current location, using the former location for extra space for the Pier Plaza. (See attached site plans for both options). There are also two funding alternatives for Maxwell's which will be discussed later. OPTION 1 - Rebuilding Maxwell's in current location PRO CON a) Gives ability to design a restaurant a) Maxwell's would be out of business that would fit into and be compatible with approximately ten to twelve months while the Pier Plaza. demolition and rebuilding occur. b) Allows for the design of Maxwell's restaurant to enhance rather than detract from the Main Street view corridor. c) Provides public rest rooms and a public observation deck as part of Maxwell's. d) Does not require the expense of a special election under Measure C. OPTION 2 - Relocate Maxwell's approximately 150 feet south of its current location PRO CON a) Provides space for larger a) Puts Maxwell's adjacent to Dwight's development of Pier Plaza area. concession at the beach which would cause conflicts with parking and access for the two lessees. b) Greater cost because of larger Pier Plaza and bringing utilities to new location. REQUEST FOR CITY COUNCIL ACTION June 7, 1993 Page four c) Would require a new parking struc- ture on the beach parking lot to make up for the loss of parking taken up by the relocation and additional plaza space. d) Requires new Coastal Commission entitlements. e) Requires a vote of the people under Measure C. If not approved, City would have to do Option 1 or demolish or rehab existing building. Staff is recommending Option 1, rebuilding Maxwell's within its existing footprint. There are two funding alternatives for Option 1, the city could pay for the rebuilding as shown above, or WPL could pay for the rebuilding. GENERAL FUND ANNUAL REVENUE AND EXPENSE ESTIMATES FOR OPTION 1 FUNDING METHODS IFCITY PAYS IF WPL PAYS FOR MAXWELL'S FOR MAXWELL'S City Lease Revenue (1) $600,000 $300,000 Possessory Interest Tax(2) 40,000 40,000 Sales Tax(3) 60,000 60,000 Parking Revenue (4) 25,000 25,000 Total City Revenue $725,000 $425,000 Debt Service P & 1 440.000(6) 0 Net General Fund Revenue $285,000 $425,000 (1) Based upon 10 percent of$6 million gross if city pays for Maxwell's and a flat$300,000 if WPL pays. (2) Possessory interest tax is one percent of$4 million Maxwell's improvements. (3) One percent of$6 million food sales. (4) Parking revenue generated by Maxwell's dedicated parking only in parking lot south of pier. (5) If City pays for Maxwell's It will cost$4,400,000 of the unused COP'S REQUEST FOR CITY WUNCIL ACTION June 7, 1993 Page five If WPL pays for the rebuilding, the city would experience NO COST for a new Maxwell's and could use a portion of unappropriated COPS for the Pier Plaza project. C17Y'S ESTIMATED COSTS FOR PIER PLAZA CONSTRUCTION Plaza Improvements $1,500,000 Parking Improvements - South of Pier 500,000 - North of Pier 600,000 Engineering and Design 280,000 Beach Concession 150,000 Rest Rooms 150,000 Contingency 170,000 TOTAL ESTIMATED CITY COST FOR PIER PLAZA & PIER PARKING LOTS $3,350,000 The following chart shows the General Fund proforma for Maxwell's 1983 through 1992: YEAR GROSS REVENUE LEASE PAYMENTS 1983 $2,676,870 $214,150 1984 3,303,123 264,250 1985 3,567,637 306,177 1986 3,889,787 311,391 1987 3,990,037 319,830 1988 3,949,224 315,967 1989 4,107,092 331,363 1990 3,767,401 303,560 1991 3,137,378 258,170 1992 3,435,157 285,052 As shown, Maxwell's provides approximately $300,000 a year revenue to the city. A re- designed Maxwell's is estimated to provide a minimum gross of$6 million a year, to start, eventually reaching $12 to $15 million over a period of eight to ten years. (Exhibit A) The above proforma for Option 1 where WPL pays for Maxwell's seems to be the best option for the city. It would keep the current city revenue flow of$300,000 per year for the first three years and then increase the revenue to the general fund in years after that. (Exhibit A). The new Maxwell's would also increase sales tax, possessory interest tax and parking revenues to the city. REQUEST FOR CITY COUNCIL ACTION June 7, 1993 Page six The existing lease with WPL is a tenant lease. The city owns the building and WPL owns the tenant improvements. The new lease with WPL would be a ground lease. WPL would own both the building and the tenant improvements until the end of the term of the lease. At that time, the city would own the building and all fixed assets in the building. The exact terms and conditions of the lease, the final sizing of Maxwell's on the existing footprint, and the term and percentage rent will be determined in negotiating with WPL and returned to Council with a proposed new agreement. Under this scenario, the city would receive possessory interest tax revenue based on the entire Maxwell's improvements including the building rather than just on the tenant improvements. With either Maxwell's option and funding method, the city must proceed with the Pier Plaza and the north and south of the pier parking lots simultaneously with the rebuilding of Maxwell's, as the new design of Maxwell's is dependent upon the new entry into the parking lots. INTERNATIONAL SURFING MUSEUM OPTIONS The beach master plan shows the H.B. International Surfing Museum being located within the north of the pier parking lot. As designed, the master plan could be implemented with or without the museum depending on the H.B. International Surfing Museum Foundation's ability to raise funds for the project. Although staff would recommend adopting the master plan showing the museum location and proceeding with entitlements under this master plan, if the foundation does not raise the required funding, the rest of the master plan improvements can be implemented and this space would simply become a beach conces- sion, rest room, and plaza area. Staff is working closely with the foundation to try to find a major sponsor to build the $5 million facility. FUNDING SOURCE Unused COPs that were sold for the canceled north of pier parking structure for the construction costs and Parking Authority Fund Balance for the Construction documents. ALTERNATIVE ACTIONS 1. Option 2 - Relocate Maxwell's approximately 150 feet south of its current location. 2. Option 1 - Rebuild Maxwell's in its current location at city expense. 3. Remove Maxwell's building from the pier area and do not rebuild. 4. Direct staff to redesign the beach master plan based upon new Council direction. REQUEST FOR COUNCIL r,%.'.TION June 7, 1993 Page seven ATTACHMENTS Exhibits B & A Site plans with Surfing Museum, and Options 1 and 2 Wimmer letter of 1/11/93 re maintenance expenditures Wimmer letter of 1/11/93 re WPL option for funding Wimmer letter of 7/8/92 re rebuilding plans WPL Preliminary floor plans for Maxwell's (4) Floor plans for H.B. International Surfing Museum (2) Letter from Purkiss-Rose-RSI FIS RH:cs Exhibit B GENERAL FUND IMPACT FOR PIER PLAZA AND PARKING LOTS OPTION 1 -WPL PAYS FOR MAXWELL'S/CITY PAYS FOR PIER PLAZA Estimated Revenue WPL (t)Parking (2)WPL WPL Possessory Parking Revenue Lease Sales Tax Interest Tax Revenue Total Year North of Pie Revenue Revenue Revenue South of Pier Revenue 1 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 2 $183,000 $300,000 $60,000 $40,000 $25,000 $608,000 3 $183,000 $300,000 $70,000 $40,000 $25,000 $618,000 4 $213,000 $300,000 $80,000 $40,000 $25,000 $658,000 5 $213,000 $350,000 $80,000 $40,000 $25,000 $708,000 6 $244,000 $450,000 $80,000 $40,000 $25,000 $839,000 7 $244,000 $510,000 $90,000 $40,000 $25,000 $909,000 (1) Current revenue for north of pier parking lot is$40,000. The design of this lot will produce 305 spaces at$600 per space annual income which equals$183,000 or a net increase of$143,000. (2) This figure assumes WPL pays for Option 1 for Maxwells. Estimated Expenses Net Revenue COP Debt Parking Maint.& Net Annual Accumulated Service for Operation General Fund General Fund Pier Plaza Expense Total Expenses Income Balance $270,000 $ 0 $270,000 ($ 270,000) ($ 270,000) $270,000 $66,000 $325,000 $ 283,000 $ 13,000 $270,000 $60,000 $330,000 $ 288,000 $ 301,000 $270,000 $65,000 $335,000 $ 323,000 $ 624,000 $270,000 $70,000 $340,000 $ 368,000 $ 992,000 $270,000 $75,000 $345,000 $ 494,000 $ 1,486,000 $270,000 $80,000 $360,000 $ 559,000 $ 2,045,000 Exhibit A MAXWELLS PRO FORMA & RENTS Figures provided by Paul Wimmer, WPL Industries, Inc. YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Maxwell's 3,000,000 4,000,000 4,500,000 5,000,000 6,000,000 Banquet 2,000,000 3,000,000 3,500,000 4,000,000 5,000,000 Entertainment 1,000,000 1,000,000 1,500,000 2,000,000 2,000,000 TOTAL SALES 6,000,000 8,000,000 9,500,000 11,000,000 13,000,000 Total Rental 520,000 720,000 870,000 1,020,000 1,220,000 City Portion 300,000 300,000 300,000 350,000 460,000 Balance Available 220,000 420,000 570,000 670,000 770,000 Interest 220,000 418,000 323,000 301,000 267,000 Principal (95,000) 2,000 247,000 369,000 503,000 LOAN PRINCIPAL 3,500,000 3,593,000 3,346,000 2,977,000 2,474,000 YEAR 6 YEAR 7 YEAR 8 YEAR 9 Maxwell's 7,000,000 7,000,000 7,000,000 7,000,000 Banquet 5,500,000 5,500,000 5,500,000 5,500,000 Entertainment 2,500,000 2,500,000 2,500,000 2,500,000 TOTAL SALES 15,000,000 15,000,000 15,000,000 15,000,000 Total Rental 1,420,000 1,420,000 1,420,000 1,420,000 City Portion 510,000 510,000 676,000 1,420,000 Balance Available 910,000 910,000 910,000 Interest 222,000 160,000 69,000 Principal 688,000 750,000 775,000 LOAN PRINCIPAL 1,786,000 775,000 0 �41e�enme fn ` THE CITY OF HUNTINGTON BEACH OVERSIZED DOCUMENT ON FILE WITH CITY CLERK �41e�enme fn ` THE CITY OF HUNTINGTON BEACH OVERSIZED DOCUMENT ON FILE WITH CITY CLERK �41e�enme fn ` THE CITY OF HUNTINGTON BEACH OVERSIZED DOCUMENT ON FILE WITH CITY CLERK January 11, 1993 Mr. Ron Hagan Director, Community Services City of Huntington Beach 2000 Main Street Huntington Beach, Ca 92648 Dear Ron: As per your request at our meeting of December 19, 1992, the following is a recap outlining the approximate ADDITIONAL expenditures for maintenance that was spent in the last two years on "bandaids" to keep the business going. Kitchen Flooring $51,000 Lighting 22,000 Electrical 8,200 Plumbing 17,000 Sprinkler 8,500 Booth & Carpeting 6,500 General Maintenance 12,000 TOTAL $125,200 These sums do not include normal maintenance for each of the two prior years which amount to approximately $50,000 per year. Our biggest problem area is in the kitchen where the flooring really needs to be replaced, a project that would close us down for 6 to 8 days with that resultant loss of business and a cost in exce�f$100,000 including electrical and plumbing rework of that area only. These figures also do not reflect the intangible loss of business when interruptions due to electrical and plumbing failures cause inconvenience or discomfort to our customers. Beyond that, these additional and unusual cost can only go up the longer the building remains in its' present condition. Sin ly`, PAUL E. WIMMER President MAXWU[r% BY THE SEA 317 Pacific Coast Highway• Huntington Beach, CA 92648 0 (714)536-2555 January 11, 1993 Mr. Ron Hagan Director, Community Services City of Huntington Beach 2000 Main Street Huntington Beach, Ca 92648 Dear Ron: In connection with our discussion of December 29, 1992 which included Don Watson, as it pertained to the Financial Proposal you sent to me, dated December 4, 1992, I would like to outline my thoughts at that meeting. Assuming that we will be able to find an entity that would advance the money necessary to re-build Maxwell's, there are certain things that will be necessary to satisfy some of the requirements of such a lender. Primarily, the ability to repay such sums including reasonable interest. For the purposes of my projections, I have taken a figure of$3.5 million as the high end as I believe that we should be able to bring the project, including business interruption, in for that amount. Rental payments to the City would cease after the closing and would resume one month after re-opening and the lease term would be suspended during closure. Potential lenders or investors seem to retain interest in a project only as long as the time line remains viable for them. In view of that fact, and based on the length of time usually necessary to secure a new lease, the changes I am proposing in this letter, plus an additional 10 year option period, could be handled in an addendum to the present lease, with all other provisions remaining in effect. After re-opening, a minimum rental payment of$300,000 per year should be made to the City. The excess, based on the lease terms, would be applied to interest and principal of the building costs, as fixed by final audit, payable to the entity that has advanced these costs. These payments, including interest of 9% would be made until that debt is retired. In order to make up the initial projected short fall, these would accelerate based on a formula that would be structured so that all rentals between the base of the $300,000 paid to the City, up to a maximum of those rents on $10 million, would go to that entity. Rentals on sales in excess of $10 million would be shared equally between the City and the lending entity. The rental structure would remain fixed as per the present terms, but new mimmu established each five years, base on 80% of the average of the past 5 years of busi Potential lenders/investors have expressed concern about the ambiguous language c the lease in connection with the parking dedicated to Maxwell's. In view of the s ape e ro'ect I believe that the addendum should also address this issue. M�►xw���s BY THE SEA 317 Pacific Coast Highway• Huntington Beach, CA 92648 • (714)536-2555 In view of what has happened, or more importantly, what has not happened, I think a project of this size and scope can only enhance the City's investment in Downtown and the Pier area. Our projected plans for a dramatic, upscale moderately priced restaurant with ample decking, a major entertainment complex and first class banquet/meeting room facilities, along with the City's plan for the Plaza and Surf Museum, would go a long way to completing a major statement of our City's heartbeat! To say nothing of the increased revenues from tax increments, real estate taxes and potential customer base for the new Downtown area!! Sincerely, i PAUL E. WIMMER President MAXW U-«s BY THE SEA 317 Pacific Coast Highway• Huntington Beach, CA 92648 • (714)536-2555 AAXWELUS 13Y TUE SEA 317 Pacific Coast Highway Huntington Beach, Ca 92648 July 8, 1992 TO: The Right Honorable Mayor and Members of the City Council. Staff Members of the City of Huntington Beach. In several meetings over the past few weeks with Mr.Ron Hagan,we have discussed the future of Maxwell's as it would be affected by the proposed Plaza. Mr. Hagan asked me to arrive at a preference as to which course to pursue from the three that seem to be the likeliest possibilities. We discussed and explored the relocation of Maxwell's to a spot just South of the present site, adjacent to the proposed new Plaza. The uncertainties and the length of the approval process,because of the conditions imposed by Measure C, make this a risky and costly undertaking at best. So a major portion of our time was spent in analyzing the other two alternatives, remodeling the existing structure or demolishing and rebuilding on the present site and approved footprint. What follows then is our preferences, observations and rationale for a course of action that seems to make the most sense. I am in favor of demolition and rebuilding for a number of reasons, prime among these being: 1. Shorter length of down time which helps both the City and ourselves financially. 2. Greater architectural freedom when starting with a 'blank sheet of paper" will enable the City to erect a building that will make a strong visual statement for the cornerstone of the new Downtown. 3. A more substantial return for all involved on the investment to accomplish this. In discussions with our architect and contractors regarding the merits of remodel versus rebuild, the following appraisals seemed to be unanimous. 1. The construction time in remodeling will be longer than new construction due to the need for selective demolition and extensive underground work. Partial demolition and remodeling always uncover expensive surprises. This is especially true with a building such as Maxwell's where no blueprints of the original structure exist. 2. The building height would need to be increased to hide the old trussed roof. 3. The bottom floor is very limited for its intended use as a banquet facility due to numerous columns (very expensive to replace) and the existing excavation limits use of the project footprint by one third. 4. The buildings age severely limits the layout of a "State of the.Art" facility. In connection with the choice of an architect, Mr. Jerry Yates has been associated with all the planning processes that have taken place over the past seven years for Maxwell's. His knowledge of the building and the engineering come from surveys that he performed for us at our expense. He has interfaced with many departments of the City and other developers as they have affected the various phases of this project and was involved with the recent study made for the City outlining the feasability of remodeling. In addition, Mr. Yates has become intimately familiar with our vision for the building and its' uses. We strongly recommend that he be selected as the building architect. You will see at this meeting the building we have designed and for the most part, it speaks for itself. I would, however, like to paint a small word picture which will better explain how we intend to maximize the use of the building and thus arrive at the greater return on this kind of investment for both of us. As I stated before,we have ahead of us the ability to turn this into a landmark to be proud of. A building that combines beauty with functionality, beckons to all and seems like "fun". My goal is to make such a strong statement with the building and its' beach appeal, that anyone who was going to drive by,would turn around and come back! We do this with a visually beautiful building that speaks of activity and expansive decking with bright colors that beckon to all to come and enjoy our beautiful beach and activities. Obviously, the uses for the areas are greatly expanded and I would hasten to add, present a greater use for our citizens than previously. With this renewal, it will be our goal to take Maxwell's out of the perceived special occasion restaurant, and make it a gathering place for all those seeking fun and dining adventures. THE OYSTER BAR AND LOUNGE. With an additional entrance directly from the Pier and large decking around it, this facility will attract a new customer to our oyster bar for less expensive dining in a more casual atmosphere. Our Jazz format will be maintained and expanded as we add a proper facility to accommodate such acts. We intend an active happy hour with piano music in the late afternoon. Friday afternoon "Tea Dances"with big bands are among the events we plan. Lastly, we would join with some of the other venues in the County in order to bring major entertainment on an irregular basis to Maxwell's, along the lines of The Crazy Horse in Santa Ana or the Coachhouse in San Juan Capistrano. DINING ROOM OPERATION. The dining areas will be light and airy with more room and a larger expanded terrace seating area. The appearance would be more informal and thus less intimidating with a wider menu range along with pricing range. It would still retain its ability to draw for those special occasions but also expand to draw a broader customer base. BANQUET FACILITIES. We have for years discussed the need for this with the City. The requests for parties and banquets that we cannot accommodate are countless. This will provide an opportunity for the community that should enable us to keep our people here in Huntington Beach rather than to have to seek elsewhere. Steve Bone and Diane Baker have seen these plans and are enthusiastic about the potential for increased opportunities for commercial applications. We would work closely with them and any other agencies to solicit convention and meeting business. The area is large enough for major functions and can be divided into smaller components. It is our intention to be very aggressive in the wedding market and our pricing structure and support facilities will make this very appealing. We intend to maximize the location on the sand,while creating a visual buffer between it and the building to encourage greater utilization of the area as a backdrop for special events, including actual wedding ceremonies. Mr. Hagan has also commented on the possibilities of a gazebo type building at the base of the contoured sloping access to the beach on the North side of the pier as the possible site for wedding ceremonies. The potential to capitalize on all these elements is limitless. THE CROWS NEST LOUNGE. This area will feature our magnificent view and again terrace opportunities. We intend to make it possible to use for seminars or small meetings during the day. It will also provide an area for people when a major attraction is appearing in the main show lounge. ALL OF THESE ELEMENTS WILL BE ACCOMPLISHED WITH A LOWER OVERALL ROOF.LINE AND MORE ATTRACTIVE ARCHITECTURAL ELEMENTS!! The plans for the Plaza show that the entrance to all of this area will be located further South. Signage for Maxwells, the banquet area and the show lounge will be essential and must be taken into consideration as well as marked accessibility for Northbound traffic. The Green Burrito issue will need to be addressed and of course the down time costs for both of us. We obviously will not retain all of our personnel but key management and staff will have to be retained. Those contracts and leases of goods and or services that we cannot negotiate a moratorium on, will have to be included as well as loss of profits. We expect the City to erect the building, bringing the utilities to the point of hookup to our equipment. We will furnish, fixturize and finish the interiors and patios. The projected cost of this refurbishment is in excess of $2,000,000. If we are able to complete this projected rebuilding of Maxwell's, we anticipate a starting gross revenue of$7,000,000 per year. Our sales prior to the recession and closing of the Pier were close to $4,000,000 and we expect the increased lounge and entertainment activity, coupled with the entry from the pier, to increase those revenues by$1,000,000. In addition, the banquet facility is anticipated to add $2,000,000 in revenue in the first year of business. We will begin to market that facility as soon as we have final plans and can produce artists renderings as a sales tool. At the $7,000,000 level, the City would receive rent of $620,000 per year (based on 8% of the first $41A and 10% of the excess) not to mention the sales tax increment return. We expect in ensuing years that our gross sales will exceed $10M!! From a business standpoint alone, this course certainly would seem to make sense. If we were to pursue a course of remodeling the existing structure, the constraints of the building would limit our gross sales to the neighborhood of$5M. In addition, it would not give us any of the advantages previously discussed. At the date of this writing, I have not been able to discuss some of the aspects of these dealings with our attorney, Mr. Barry Ross. By the time we meet on Monday however, I will have met with him and will address any other issues he deems pertinent at that time. I will be more than happy to discuss any aspects of what we propose with any of you at any time. I am delighted that we stand on the threshold of being able to build a "landmark" together for years to come for many to enjoy!! Sincere , C PAUL E. WIMMER President YATES ASSOC Art hilectut eeft.rfom- .! 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O�� 1 O O O O CD patio C7Op O • _ I - OO O O 00 O Ox.h. level plan 0 8 16 32 i • i service area crows nest 850 of pch 5880 of banquet 7150 of total 13880 of building area 30168 of i YATES ASSOC. . t..t.lmne.• I� dress'g manager's office storage O ❑ZO� p _ y o p n^ --- - -- c..wr.._ O - w -- 0 FF [� d o e prow's nest p r^l a O 0 Ostia nn...r r ti third level plan 0 8 16 32 . b Q � f� Q p.c.h.elevation L g 0 8 16 l32 -. MA d Q C beach elevation Lj 0 8 16 32-. - �Q GALLERY �GtFT SHOP , v -_ LEVEL t:Xti I BIT-5 OPEN TO \ BELOW A iQUARIUM uP y THEATaP, ' � ,� o85�RVAT1oN D� Al -AcZ-�i 8Y EXH 181TS/TI DEMOLS hbMIN. MEETING DIRSel'foR OFF oFt io 0 AI11� `+v purkiss erose - rsi April 20, 1993 Ron Hagan Director of Community Services City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Subject: Fee Proposal to Provide Professional Design Services for the Pier Plaza Dear Ron: We are pleased to have this opportunity to present our fee proposal for the Pier Plaza and mov'p,,gn to the next phase. From all we,,hear, the opening of the new p*,,has proven to be successful. The new Pier Plaza will expand the usable space, provide a tremendous opportunity for programming of special events, and do wonders for the overall image of Huntington Beach. Enclosed please find our breakdown of professional fees as requested. Sincerely, Step se,)A.S.L. Landscape Architect Landscape Architecture Recreation and Park Planning 219 North Harbor Boulevard Fullerton,California 92632 FAX (714)871 1188 (714)871 3638 PROFESSIONAL FEES Task 1: Specific Plan ► Meeting with public agencies and task force for input and approvals ► Design process through Master Plan approval, prepare entitlement documents and specific plan $50,000.00 Task Two: Coastal Development Permit ► Meet with City staff IN. Prepare all CDP documents $ 3,000.00 Task Three: Design Development and Construction Document Phase ► Meetings with City staff for input, obtain approval and coordinate project $ 7,500.00 ► Design development to layout all specific elements, details and special features for City and state review and approval prior to starting working documents. $15,000.00 ► Develop a comprehensive set of construction docurr•en€s for implementation: * Planning and landscape architectural services: $87,000.00 Hrdscape, landscape, irrigation, site amenities * Civil engineering: $75,000.00 Grading, drainage, horizontal and vertical control, utility plan * Architectural: $28,000.00 Restroom, concession, kitchen design, mechanical, structural, plumbing * Electrical Engineering: $25,000.00 New services, site lighting, beach lighting, restroom and concession, communications and public address systems * Geo-Technical: $ 6,500.00 Foundation report, water table and field exploration * Structural Engineering: $ 2,500.00 Retaining walls * Agronomist: $ 500.00 Soil nutrient test ► Prepare construction cost estimates Inc. Task Four: Contract Administration ► Consult with City staff and contractor during the duration of the project. Approve submittals, approve quality of work and as-built drawings $50,000.00 Total Fee: $350,000.00 FLAM#& CITY OF HUNTINGTON BEACH Lo" INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: MICHAEL T. UBERUAGA FROM: ROBERT J. FRANZ, DEPUTY CITY ADMINISTRATOR SUBJECT: REQUESTED APPROPRIATION TO FUND THE REBUILDING OF MAXWELLS RESTAURANT, FIS 93-53 DATE: APRIL 14, 1993 As required by Resolution 4832, a Fiscal Impact Statement has been prepared for the proposed use of $3,500,000 to fund the design and rebuilding of Maxwell ' s Restaurant at its current location. Upon approval of the City Council , the balance of the undesignated, unreserved 1986 COP Fund would be reduced by $569,493 to $2,158,668 while that of the 1989 COP Fund would be reduced by $2,430,507 to $0. The final requested appropriation for $350,000 to fund design costs would reduce the balance of the unreserved, undesignated Parking Authority Fund $350,000 t $7,600. Robert J. ra z Deputy City Administrator RJF:sd WPADSERT:1389 from the desk of: q: y o KATE WHITNEY DEPUTY CITY CLERK (714) 536-5210 P.O. BOX 190 HUNTINGTON BEACH, CA 92648 BEQUEST rr"A CITY COUNCIL/PARKING ►►UTMORITY ACTION Date May 17, 1993 Submitted to: Honorable Mayor and City Council Submitted by: Michael Uberuaga, City Administrato Prepared by: Ron Hagan, Director, Community Services Robert Franz, Deputy City Admi�Istrator,Administrative Se Subject: Don Watson, City Treasurer .OG�'f/f/,ems►-' '- „ MAXWELL'S/PIER PLAZA/SURFING•MUSEUM OPTIONS— Consistent with Council Policy? [ ] Yes [ ] New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,AttachmaR,ts: STATEMENT OF ISSUE ow 5����3 eirnv4D 7D ? In 1992, the City Council approved the master plan for the south beach improvements and the north of the pier parking lot; however, the City Council has not yet approved a plan for the Pier Plaza, the parking lots north and south of the pier, the rebuilding of Maxwell's by the Sea, or an option for the Surfing Museum. Since all of these projects depend on the option chosen for Maxwell's, the City Council asked staff to prepare cost estimates for each option and provide an analysis of each. Once Council decides on an option for Maxwells, the city can begin phased development of the beach master plan contingent upon entitlement approvals and available funding. RECOMMENDATIONS Staff is not requesting action by the City Council at this time. Due to the importance of the Maxwell's/Pier Plaza/Surfing Museum projects, the Request for Council Action is quite lengthy and Council is, therefore, being provided the opportunity to discuss the projects prior to the June 7, 1993, Council meeting where Council will be asked to take action on the following recommendations: O Approve Option 1 for the rebuilding of Maxwell's at its current location with WPL Industries, Inc. paying for the construction of the new restaurant; © Direct staff to proceed with the entitlement process for the beach master plan as presented; © Direct staff to negotiate and return to the City Council for approval of a new agreement with WPL Industries, Inc. pursuant to Option 1; O Approve the use of$3 million of unallocated COPs for the Pier Plaza and parking lot improvements; 6 PIO 5/85 REQUEST FOR CITY 6'NUNCIL ACTION May 17, 1993 Page two © Appropriate $350,000 from the Parking Authority fund balance for the consultant contract for the beach master plan with Purkiss-Rose &Associates for preparation of entitlement documents (beach master plan), site plans, cost estimates, and meetings with required agencies; and 4 Instruct staff to obtain an independent financial review of the revenue and cost estimates included in this RCA. ANALYSIS BACKGROUND - The current structure housing Maxwell's by the Sea restaurant was built in 1932 and is in need of major building, fire and health code improvements. In analyzing what to do with Maxwell's, staff originally presented City Council with three options, one being to try and upgrade the existing structure. The minimum cost for this approach is $2 million and it was felt that such approach would not resolve the problems of aesthetics, public access and desired restaurant operations. The issues that staff is trying to resolve with the Maxwell's and Pier Plaza projects are: A. Public health and safety and seismic improvements. B. Provide a Pier Plaza entryway onto the pier that is both pedestrian friendly and aesthetically pleasing that can be used for all of the various special events hosted by the city at the pier. C. Resolve parking and vehicle access problems currently existing in the parking lots north and south of the pier. D. Provide a restaurant facility with full service dining amenities that would maintain the city's current revenue base and increase city revenue to pay the debt service for the COPs used for Pier Plaza and parking lot improvements. The current lease with WPL Industries, Inc. was approved April 1, 1983, for a term of 25 years with an option to extend, if tenant were not in default of the agreement, for an additional 15 year period, making the existing agreement a 40 year lease. There are currently 30 years left on the agreement. The lease agreement with WPL is favorable to the city in terms of the market rates for percentage rents. WPL pays the city 8 percent of gross receipts for up to $4 million, and 10 percent of gross receipts over$4 million. A check of other restaurant leases in marinas reveals the market rate to be between 4 to 7 percent of gross receipts. Paul Wimmer (WPL Industries) submitted a plan to the city for a new, full-service Maxwell's which would include a dinner house, entertainment area, outdoor seating area, and complete banquet facilities. This concept would be constructed on the exact footprint of the existing building and would eliminate the concessions currently under the restaurant. Since REQUEST FOR CITY COUNCIL ACTION May 17, 1993 Page three Dwight's and Sunny's beach concessions can offer the same services as Maxwell's sublease concessions, staff is in favor of Maxwell's being a full-service restaurant per the design submitted by WPL. The income proforma shows the full service facility is estimated to produce consistently more revenue than the existing facility. (Exhibit A) Council rejected the option of renovating the existing structure because it would not address the previously noted issues. After Council reviewed the design, it felt that the proposed restaurant could be constructed under two options. Option 1 would be to build it in the existing location, and Option 2 would be to build it 150 feet south of its current location, using the former location for extra space for the Pier Plaza. (See attached site plans for both options). There are also two funding alternatives for Maxwell's which will be discussed below. OPTION 1 - Rebuilding Maxwell's in current location COST ESTIMATE AND ANALYSIS FOR OPTION 1 IF CITY PAYS FOR MAXWELL'S Maxwell's Construction Demolition $400,000 Utilities 125,000 New Building 2,500,000 Plans & Specification 250,000 Engineering & Inspection 50,000 SUBTOTAL $3,325,000 Associated Costs Business Interruption $280,000 Loss of Lease Revenue 300,000 Loss of Parking Revenue* 25,000 Buyout of Subleases & Loss of Sales Tax 80.000 SUBTOTAL $685,000 TOTAL ESTIMATED COST OF OPTION I $4,010,000 *Staff estimates that 25 percent of annual parking revenue in Lot A is attributed to Maxwell's. REQUEST FOR COUNCIL ACTION May 17, 1993 Page four PRO CON a) Gives ability to design a restaurant a) Maxwell's would be out of business that would fit into and be compatible with approximately ten to twelve months while the Pier Plaza. demolition and rebuilding occur. b) Allows for the design of Maxwell's b) There would have to be a cost of restaurant to enhance rather than detract business interruption and loss of revenue from the Main Street view corridor. to the city factored into the project cost as shown. c) Provides public rest rooms and a public observation deck as part of Maxwell's. d) Does not require the expense of a special election under Measure C. OPTION 2 - Relocate Maxwell's approximately 150 feet south of its current location COST ESTIMATE AND ANALYSIS FOR OPTION 2 IF CITY PAYS FOR MAXWELL'S Maxwell's Construction Demolition $550,000* Utilities 300,000** New Building 2,500,000 Plans & Specification 250,000 Engineering & Inspection 50,000 SUBTOTAL $3,650,000 Associated Costs Business Interruption $0 Loss of Lease Revenue 0 Loss of Parking Revenue 25,000 Buyout of Subleases & Loss of Sales Tax 80,000 Measure "C" 150,000 Additional Pier Plaza Costs 1,005,000 SUBTOTAL $1,260,000 TOTAL ESTIMATED COST OF OPTION 2 $4,910,000 'Demolition is more expensive under Option 2 because the old building and parking have to be demolished to construct the new building south of its current location. *"Utilities are more expensive under Option 2 because they have to be brought to the new location. REQUEST FOR CITY COUNCIL ACTION May 17, 1993 Page five PRO CON a) Moves Maxwell's out of the Main a) Puts Maxwell's adjacent to Dwight's Street view corridor. concession at the beach which would cause conflicts with parking and access for the two lessees. b) Provides space for larger development of Pier Plaza area. b) Greater cost because of larger Pier Plaza and bringing utilities to new location. c) Avoids downtime for Maxwell's restaurant operations. c) Would require a new parking structure on the beach parking lot to make up for the loss of parking taken up by the relocation and additional plaza space. d) Requires new Coastal Commission entitlements. e) Requires a vote of the people under Measure C. If not approved, City would have to do Option 1 or demolish or rehab existing building. Staff is recommending Option 1, rebuilding Maxwell's within its existing footprint. There are two funding alternatives for Option 1, the city could pay for the rebuilding as shown above, or WPL could pay for the rebuilding. The following chart shows the General Fund proforma for Maxwell's 1983 through 1992: YEAR GROSS REVENUE LEASE PAYMENTS 1983 $2,676,870 $214,150 1984 3,303,123 264,250 1985 3,567,637 306,177 1986 3,889,787 311,391 1987 3,990,037 319,830 1988 3,949,224 315,967 1989 4,107,092 331,363 1990 3,767,401 303,560 1991 3,137,378 258,170 1992 3,435,157 285,052 REQUEST FOR CITY GtUNCIL ACTION May 17, 1993 Page six As shown, Maxwell's provides approximately $300,000 a year revenue to the city. A re- designed Maxwell's is estimated to provide a minimum gross of$6 million a year, to start, eventually reaching $12 to $15 million over a period of eight to ten years. (Exhibit A) The above proforma for Option 1 where WPL pays for Maxwell's seems to be the best option for the city. It would keep the current city revenue flow of$300,000 per year for the first three years and then increase the revenue to the general fund in years after that. (Exhibit A). The new Maxwell's would also increase sales tax, possessory interest tax and parking revenues to the city. GENERAL FUND ANNUAL REVENUE AND EXPENSE ESTIMATES FOR OPTION 1 FUNDING METHODS CITY PAYS WPL PAYS FOR MAXWELL'S FOR MAXWELL'S City Lease Revenue (1) $600,000 $300,000 Possessory Interest Tax (2) 40,000 40,000 Sales Tax (3) 60,000 60,000 Parking Revenue (4) 25,000 25.000 Total City Revenue $725,000 $425,000 Debt Service P & 1 440,000 0 Net General Fund Revenue $285,000 $425,000 (1) Based upon 10 percent of$6 million gross if city pays for Maxwell's and a flat$300,000 if WPL pays. (2) Possessory interest tax is one percent of$4 million Maxwell's improvements. (3) One percent of$6 million food sales. (4) Parking revenue generated by Maxwell's dedicated parking only in parking lot south of pier. If WPL pays for the rebuilding, the city would experience NO COST for a new Maxwell's and could use a portion of unappropriated COPs for the Pier Plaza project. CITY'S ESTIMATED COSTS FOR PIER PLAZA CONSTRUCTION Plaza Improvements $1,500,000 Parking Improvements - South of Pier 500,000 - North of Pier 600,000 Engineering and Design 280,000 Contingency 120,000 TOTAL ESTIMATED CITY COST FOR PIER PLAZA & PIER PARKING LOTS $3,000,000 GENERAL FUND IMPACT FOR PIER PLAZA AND PARKING LOTS r: OPTION I -WPL PAYS FOR MAXWELL'S ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE v? YEAR (1)PARKING (2) WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MA1NT. & EXPENSES GENERAL GENERAL C' NO. OF REVENUE REVENUE TAX REVENUE FOR PIER OPERATION FUND FUND PIER REVENUE SO. OF PIER PLAZA EXPENSE INCOME BALANCE 1 s0 SO s0 s0 SO $O $270,000 $O $270,000 ($270,000) (S270,000) K 2 $183,000 $300,000 $60,000 $40,000 $25,000 $608,000 $270,000 $55,000 $325,000 $283,000 $13,000 �'' 3 $183,000 $300,000 $70,000 $40,000 $25,000 $618,000 $270,000 $60,000 S330,000 S288,000 $301,000 4 $213,000 $300,000 $80,000 S40,000 $25,000 S658,000 $270,000 $65,000 $335,000 $323,000 S624,000 (^, 5 $213,000 $350,000 $80,000 $40,000 $25,000 $708,000 $270,000 $70,000 $340,000 $368,000 S992,000 6 $244,000 $450,000 $80,000 $40,000 $25,000 $839,000 $270,000 $75,000 $345,000 $494,000 $1,486,000 Y 7 $244,000 $510,000 $90,000 $40,000 $25,000 $909,000 $270,000 $80,000 $350,000 $559,000 $2,045,000 fi (1) Current revenue for north of pier parking lot is$40,000. The redesign of this lot will produce 305 spaces at$600 per space p annual income which equals$183,000,or a net increase of$143,000. tz (2) This figure assumes WPL pays for Option 1 for Maxwell's. GENERAL FUND IMPACT FOR PIER PLAZA AND PARKING LOTS OPTION I - CITY PAYS FOR MAXWELL'S ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE YEAR (1)PARKING WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. & EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE FOR PIER OPERATION FUND FUND PIER REVENUE SO. OF PIER PLAZA EXPENSE INCOME BALANCE 1 SO $O s0 SO SO $O $710,000 $O $710,000 ($710,000) (S710,000) 2 $183,000 $600,000 S60,000 $40,000 $25,000 $908,000 $710,000 $55,000 $765,000 $143,000 (S567,000) 3 $183,000 $600,000 $70,000 $40,000 $25,000 $918,000 $710,000 $60,000 $770,000 $148,000 ($419,000) 4 $213,000 $600,000 $80,000 $40,000 $25,000 $958,000 $710,000 $65,000 $775,000 $183,000 (S236,000) 3 5 $213,000 S650,000 S80,000 S40,000 $25,000 S1,008,000 S710,000 S70,000 S780,000 S228,000 (S8,000) W 6 $244,000 $750,000 $80,000 $40,000 $25,000 $1,139,000 $710,000 $75,000 $785,000 $354,000 $346,000 0 7 $244,000 $810,000 S90,000 $40,000 $25,000 $1,209,000 $710,000 $80,000 $790,000 $419,000 $765,000 V ,(U 10 0W l'� \ GENERAL FUND IMPACT IF CITY PAYS FOR PIER PLAZA ,O AND NO IMPROVEMENTS ARE DONE TO MAXWELLS* � Cn ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE . 's7 YEAR PARKING WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED 0 REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. & EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE FOR PIER MAXWELL'S FUND FUND F-1 PIER REVENUE SO. OF PIER PLAZA REPAIR INCOME BALANCE n 1 $0 $300,000 $30,000 $7,000 $25,000 $362,000 $270,000 $120,000 $390,000 ($28,000) ($28,000) O 2 $183,000 $300,000 $30,000 $7,000 $25,000 $545,000 $270,000 $135,000 $405,000 $140,000 $112,000 rC'y 3 $183,000 $300,000 $30,000 $7,000 $25,000 $545,000 $270,000 $150,000 $420,000 $125,000 $237,000 4 $213,000 $300,000 $30,000 $7,000 $25,000 $575,000 $270,000 $165,000 $435,000 $140,000 $377,000 C' 5 $213,000 $300,000 $30,000 $7,000 $25,000 $575,000 $270,000 $180,000 $450,000 $125,000 $502,000 y 6 $244,000 $300,000 $30,000 $7,000 $25,000 $606,000 $270,000 $195,000 S465,000 $141,000 $643,000 Cl) H 7 $244,000 $300,000 $30,000 $7,000 $25,000 $606,000 $270,000 $210,000 f480,400 $126,000 $769,000 O Z *assumes Health and/or Building Departments don't close Maxwells. GENERAL FUND IMPACT IF NEITHER MAXWELL'S NOR PIER PLAZA IS DONE* ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE YEAR PARKING WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL MAXWELL'S PARKING TOTAL NET ANNUAL ACCUMULATED REVENUE LEASE SALES TAX INTEREST PARKING REVENUE ANNUAL MAINT. & EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE REPAIR OPERATION FUND FUND PIER REVENUE SO. OF PIER COSTS EXPENSE INCOME BALANCE 1 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $70,000 $50,000 $120,000 $282,000 $282,000 2 f40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $80,000 $55,000 $135,000 $267,000 $549,000 3 3 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $90,000 $60,000 $150,000 $252,000 $801,000 4 f40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $100,000 $65,000 $165,000 $237,000 $1,038,000 5 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $110,000 $70,000 $180,000 $222,000 $1,260,000 ,b v 6 $40,000 $300,000 $30,000 $T 000 $25,000 $402,000 $120,000 $75 000 $195 000 $207 000 f1 46T 000 7 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $130,000 $80,000 $210,000 $192,000 $1,659,000 M *assumes Health and/or Building Departments don't close Maxwell's. r• Z OQ w rt GENERAL FUND IMPACT IF WPL PAYS FOR OPTION I MAXWELL'S _� NO IMPROVEMENTS TO PIER PLAZA ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE YEAR PARKING WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED O 7d REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. & EXPENSES GENERAL GENERAL C7 NO. OF REVENUE REVENUE TAX REVENUE FOR PIER OPERATION FUND FUND ►� PIER REVENUE SO. OF PIER PLAZA EXPENSE INCOME BALANCE y rC (7 1 $40,000 SO SO SO SO $40,000 SO $100,000 $100,000 ($60,000) ($60,000) O 2 $40,000 $300,000 $60,000 $40,000 $25,000 $465,000 $O $155,000 $155,000 $310,000 $250,000 3 $40,000 S300,000 $70,000 $40,000 $25,000 $475,000 - $O $160,000 S160,000 $315,000 $565,000 4 S40,000 $300,000 $80,000 S40,000 S25,000 $485,000 $O $165,000 $165,000 $320,000 $885,000 5 $40,000 $350,000 $80,000 $40,000 $25,000 $535,000 $O $170,000 $170,000 $365,000 $1,250,000 y 6 $40,000 $450,000 S80,000 $40,000 $25,000 $635,000 $O $175,000 $175,000 $460,000 S1,710,000 Cj 7 $40,000 $510,000 $90,000 $40,000 $25,000 $705,000 $O $180,000 $180,000 $525,000 $2,235,000 O z GENERAL FUND IMPACT IF CITY PAYS FOR PIER PLAZA AND MAXWELL'S IS REMOVED FROM THE BEACH ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE YEAR PARKING WPL MAXWELL'S POSSESSORY NEW TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. & EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE FOR PIER OPERATIONS FUND FUND PIER REVENUE SO. OF PIER PLAZA INCOME BALANCE 1 $O $O $O $O SO $O $3700000 $O $370,000 ($370,000) ($370,000) 2 $183,000 SO $O $O $25,000 $208,000 $370,000 $55,000 $425,000 ($217,000) (S587,000) 3 $183,000 $O SO SO $25,000 $208,000 $370,000 $60,000 $430,000 ($222,000) (S809,000) 4 $213,000 $O SO SO $25,000 $238,000 $370,000 $65,000 $435,000 (S197,000)($1,006,000) 5 $213,000 SO SO SO $25,000 $238,000 $370,000 $70,000 S440,000 (S202,000)($1,208,000) 0rA C 6 S244,000 SO $O $O S25,000 S269,000 $370,000 S75,000 $445,000 ($176,000)($1,384,000) (0 7 $244,000 $O $O $O $25,000 $269,000 $370,000 $80,000 $450,000 ($181,000)($1,565,000) :jy F, �F� fD�p �O W ,a. REQUEST FOR CITY COUNCIL ACTION May 17 , 1993 Page ten With either Maxwell's option and funding method, the city must proceed with the Pier Plaza and the north and south of the pier parking lots simultaneously with the rebuilding of Maxwells, as the new design of Maxwell's is dependent upon the new entry into the parking lots. INTERNATIONAL SURFING MUSEUM OPTIONS The beach master plan shows the H.B. International Surfing Museum being located within the north of the pier parking lot. As designed, the master plan could be implemented with or without the museum depending on the H.B. International Surfing Museum Foundation's ability to raise funds for the project. Although staff would recommend adopting the master plan showing the museum location and proceeding with entitlements under this master plan, if the foundation does not raise the required funding, the rest of the master plan improvements can be implemented and this space would simply become a beach conces- sion, rest room, and plaza area. Staff is working closely with the foundation to try to find a major sponsor to build the $5 million facility. FUNDING SOURCE Unused COPs that were sold for the canceled north of pier parking structure. ALTERNATIVE ACTIONS 1. Option 2 - Relocate Maxwell's approximately 150 feet south of its current location. 2. Option 1 - Rebuild Maxwell's in its current location at city expense. 3. Remove Maxwell's building from the pier area and do not rebuild. 4. Direct staff to redesign the beach master plan based upon new Council direction. ATTACHMENTS Exhibit A Site plans with Surfing Museum, and Options 1 and 2 Wimmer letter of 1/11/93 re maintenance expenditures Wimmer letter of 1/11/93 re WPL option for funding Wimmer letter of 7/8/92 re rebuilding plans WPL Preliminary floor plans for Maxwell's (4) Floor plans for H.B. International Surfing Museum (2) Letter from Purkiss-Rose RSI FIS RH:cs RECEIVED . MADE A INTERNATIONAL PART OF THE RECORD AT HUIN l TEsyi tw..�----- ETING �.F.FICE OF THE CITY CLERK mu Ell CONNIE BROCKWAY 111111161111 HUN SURFING MUSEUM PIER PR8, JECT If L FEBU;ARY 24 . 1 '99 E Mailing-P.O. Box 782 Huntington Beach,CA 92648 Telephone(714) 960-3483 Fax(714) 536-7875 Location-411 Olive Street Huntington Beach, CA 92648 INTRODUCTION PRO Drawing Power: "The Surfing Museum would act as a cultural anchor increasing Pierside's visitation levels in the winter months." Phase 1: Retail Market Analysis Main St Redevelopment Area, Halccon Ltd. International Appeal: Within the first month of its opening, the museum was host to travelers from 37 states and 16 countries. Growth Attraction: 'During the 1990's the arts will gradually replace sports as society's primary leisure activity...Since 1965 American Museum attendance has increased from 200 million to 500 million annually." Megatrends 2000, by John Naisbitt& Patricia Aburdene, p.62. Size of Culture Represented: "there is an estimated 1,000,000 surfers in California the vast majority of which live in the southern part of the state." Huntington Beach Surfing Museum Feasibility Analysis, State Department of Recreation, p.11. Appropriateness: Home to U.S. Surfing Championships and the celebrated O.P. Pro, Huntington Beach is rated "the most heavily surfed beach on the West Coast" by Surfer's Almanac, and terms it "the unofficial surf capital of the world." Cultural Heritage: "The Surfing Museum planned for the west side of the pier will be an excellent cultural use that will help guarantee that surfing's heritage will continue to be represented in Huntington Beach." Phase l: Retail Market Analysis Main St. Redevelopment Area, Halcyon Ltd. Media Attention: "It has been featured in Street Rodder, Sunset and Playboy magazines and has captured the attention of 'Late Night with David Letterman," Los Angeles Times, 4/28/91. Revenue Potential: "The most spectacular profits come form a first-class museum shop...What is a more beautiful setting for your organization's next gala affair...?" Megatrends 2000, John Naisbitt & Patricia Aburdene, p. 81-2. I DOCUMENT _ State of California-The Resources Agency DEPARTMENT OF PARKS AND RECREATION Huntington Beach Surfing Museum, 'A Site Analysis', April 1988. p11. 9. Does the project have potential for commercial success? The proponents have expressed a high degree of confidence in their ability to raise adequate funding to set up and operate the museum. They intend to tap both general business and surfing-specific industries for financial contributions and corporate sponsorships as well as donations of exhibit and archival materials. They also plan to charge an admission fee of $2 to $3 as a means of generating additional operating capital. While "willingness-to-tpay" will depend in part on the scale and caliber of the facility, most visitors would probably be receptive to a fee in this range (Demetrak)*. They have also indicated that j they hope to entice 3-5% of all annual visitors to Southern g California into visiting the surfing museum. A more realistic projection, again depending on the size and qualify of the museum, would be 300,000-500,000 annual visitors I (Demetrak)t. Assuming these figures are practical,admission fees could generate roughly $1.25 million in annual revenue. In addition, the proponents wish to operate a gift shop on the premises where visitors may purchase books, videos, posters, postcards, and other educational and/or memorabilia items. Profits form this operation would also become part of the museum's operating capital. In addition to employing some key managerial and professional staff, the proponents hope to make intensive use of volunteers--as docents, salespeople, historians, restoration, restoration specialist, and the like. While not without cost, j volunteer programs can certainly enhance the viability of a museum project. However, it would be unrealistic to assume that a facility of the size proposed can be operated without a considerable investment in both paid and volunteer staff. 0 �Demetrak, Keith, Chief, Office of Interpretive Services, DPR. Personal Interview- March 13,1988. I t i i E , I _ j PROJECTION INTERNATIONAL SURFING MUSEUM H UNTI NGTON BEACH OPERATING INCOME & EXPENSES JANUARY 4, 1992 INCOME ---------------------- Number of Annual Visitors 300,000 500, 000 Ticket Price $3 . 00 -$3 . 00 ------- ------- Income from Visitors 900,000 77 . 3% 1, 500, 000 77 . 9% Gift Shop 8 .0%of Visitor $10 . 00 240,000 20 . 6% 400, 000 20 . 8% Income Sponsor TBD 0 . 0% TBD 0 . 0% Other : Donations Fundraisers 25, 000 2 . 1`k 25, 000 1. 3% Interest Income TBD 0 . 0% TBD 0 . 0% --------- ----- --------- ----- TOTAL INCOME 1,165, 000 100 . 0% 1,925, 000 100 . 0% OPERATING EXPENSES ---------------------- Payroll 285,000 24 . 5% 310, 000 16 . 1% Insurance 12, 000 1.0% 19, 000 1.0% Utilities 5, 400 0 . 5% 6,600 0 . 3% Professional Services 7,000 0 . 6% 12, 000 0 . 6% Office Expenses 5, 000 0 . 4% 8, 000 0 . 4% Advertsing 48,000 4 .1% 60, 000 3 .1% Equipment Maintenance 8, 000 0 . 7% 13, 000 0 . 7% F.F.& E. Replacement/Renewal 6, 000 0 . 5% 10, 000 0 . 5% Exhibit change-overs 12, 000 1 .0% 19,000 1. 0% Acquisitions 17, 000 1. 5% 29, 000 1. 5% Set-Aside for New films 40,000 3 . 4% 200,000 10 . 4% Gift Shop Products 96,000 8 . 2% 160, 000 8 . 3% Surfing Hall of Fame 17, 000 1 . 5% 29, 000 1 . 5% ------- ----- ------- ----- TOTAL OPERATING EXPENSES 558, 400 47 . 9% 875, 600 45 . 5% -------- ----- -------- ----- NET OPERATING INCOME $606,600 52. 1% $1, 049, 400 54 . 5% DEBT SERVICE ---------------------- Loan payments ** Princple 5,000,000 Interest 7. 3% 413,000 413,000 Term 30 Years -------- ----- -------- ----- NET CASH INCOME/(LOSS) $193,600 16 . 6% $636, 400 33 . 1% Amount and related data shown herein are all conjecture based upon assumed building areas proposed. =1 _. Ca r Special Feahms —The . . �s _ W stronglystand out as the most important physical image in the Village District. We!hat the ocean view from Main Street be keptopen Rather,the Surfing,Museum and ,eating where appropHate. proposed restaurants should be used to reinforce the plaza with entrances,outdoor exhibits and �'� ,..?f..\4 •iy/�ryi�lr - ` d '..igrr�lwW�WM41W+1"P'r i 0 CD 2. + • �� / • • �� .. r5 its o • • i - rM / i per r C/ _ S i J • WAP Pa 23 �► / - �- /� i / ' 'j mow► V767AWA, r . \► �+MAW all dim aJEENt�� son 1■■■■■ • Uw- i 1 goo -` 1 CONCEPTS H A L L OF F A M E �jg�rA :FE I � r i $Ro nrzF �l-A6v EI i v SLvI-.�7ve E'rj i 1-� 4! C0NCEPT3 SURF THEATER 0 o 0 0 Imagine 360 DONOR OPPORTONITIEl Donors who have contributed$20,000 or more wile have a variety of naming opportunities available to them. To assist In selecting a naming opportunity most reAealhw of individual or corporate intered and g1t Intention,the following roster has been sstablished.• sego y Subject outer Corttributlon EXHIBITS 1. History Beginning to present $125,000 Huntington Beach surf history 2. Personalities Hall of Fame $10,000 ea. Biographies $ 7,500 ea 3. Movies Surf movie library and $75,000 reviewing room 4. Music Music history and library $75,000 5. Art Permanent collection for tour $100,000 Commissioned art 6. Design Surfboards& related equipment Engineering principals and manufacturing. Transportation design Clothing &fashion trends Artifacts-collectables Inventions $250,000 PERMANENT EXHIBITS Imagine 360... 70mm film frame to 1. Surf theater reproduce Its unique seamless 360-degree image with 6-channel surround sound system. 50foot diameter screen. $850,000 Film and production $2,500,000 2. Aquarium/tide pools Six tank aquarium and live tide pool supported with environmental and exhibits $500,000 3. Gift shop and fine arts gallery Showcase for surf items and art $125,000 DOCUMENTATION Archival material on video Documenting surfing from A to Z $1000. per minute with 10 -20 minute videos Huntington beach Art Center Capital Campaign REQUEST FOrc CITY COUNCIUPARKING r%UTHORITY ACTION 1)671r e40571) oN S//7/9� 7) 3/ � G?3 Date May 993 Submitted to: onorable Mayor and City Council Submitted b �� Mich I Uberuaga, City Administrato Prepared by: Ron Hagan, Director, Community ServicesO Robert Franz, Deputy City Admielstrator,Administrative Se Subject: Don Watson, City Treasurer -i MAXWELL'S/PIER PLAZA/SURFING MUSEUM OPTIONSr— jC.�n Consistent with Council Policy? [ ] Yes [ ] New Policy or Exception �; =.�r,n, Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: f cv - STATEMENT OF ISSUE In 1992, the City Council approved the master plan for the south beach improvements and the north of the pier parking lot; however, the City Council has not yet approved a plan for the Pier Plaza, the parking lots north and south of the pier, the rebuilding of Maxwell's by the Sea, or an option for the Surfing Museum. Since all of these projects depend on the option chosen for Maxwell's, the City Council asked staff to prepare cost estimates for each option and provide an analysis of each. Once Council decides on an option for Maxwell's, the city can begin phased development of the beach master plan contingent upon entitlement approvals and available funding. RECOMMENDATIONS Staff is not requesting action by the City Council at this time. Due to the importance of the Maxwell's/Pier Plaza/Surfing Museum projects, the Request for Council Action is quite lengthy and Council is, therefore, being provided the opportunity to discuss the projects prior to the June 7, 1993, Council meeting where Council will be asked to take action on the following recommendations: O Approve Option 1 for the rebuilding of Maxwell's at its current location with WPL Industries, Inc. paying for the construction of the new restaurant; © Direct staff to proceed with the entitlement process for the beach master plan as presented; © Direct staff to negotiate and return to the City Council for approval of a new agreement with WPL Industries, Inc. pursuant to Option 1; O Approve the use of$3 million of unallocated COPs for the Pier Plaza and parking lot improvements; -P,qR K I N c,��'tl ° R T`' PIO 5/85 REQUEST FOR CITY &JNCIL ACTION May 17, 1993 ` Page two © Appropriate $350,000 from the Parking Authority fund balance for the consultant contract for the beach master plan with Purkiss-Rose & Associates for preparation of entitlement documents (beach master plan), site plans, cost estimates, and meetings with required agencies; and © Instruct staff to obtain an independent financial review of the revenue and cost estimates included in this RCA. ANALYSIS BACKGROUND - The current structure housing Maxwell's by the Sea restaurant was built in 1932 and is in need of major building, fire and health code improvements. In analyzing what to do with Maxwell's, staff originally presented City Council with three options, one being to try and upgrade the existing structure. The minimum cost for this approach is $2 million and it was felt that such approach would not resolve the problems of aesthetics, public access and desired restaurant operations. The issues that staff is trying to resolve with the Maxwell's and Pier Plaza projects are: A. Public health and safety and seismic improvements. B. Provide a Pier Plaza entryway onto the pier that is both pedestrian friendly and aesthetically pleasing that can be used for all of the various special events hosted by the city at the pier. C. Resolve parking and vehicle access problems currently existing in the parking lots north and south of the pier. D. Provide a restaurant facility with full service dining amenities that would maintain the city's current revenue base and increase city revenue to pay the debt service for the COPs used for Pier Plaza and parking lot improvements. The current lease with WPL Industries, Inc. was approved April 1, 1983, for a term of 25 years with an option to extend, if tenant were not in default of the agreement, for an additional 15 year period, making the existing agreement a 40 year lease. There are currently 30 years left on the agreement. The lease agreement with WPL is favorable to the city in terms of the market rates for percentage rents. WPL pays the city 8 percent of gross receipts for up to $4 million, and 10 percent of gross receipts over $4 million. A check of other restaurant leases in marinas reveals the market rate to be between 4 to 7 percent of gross receipts. Paul Wimmer (WPL Industries) submitted a plan to the city for a new, full-service Maxwell's which would include a dinner house, entertainment area, outdoor seating area, and complete banquet facilities. This concept would be constructed on the exact footprint of the -^ existing building and would eliminate the concessions currently under the restaurant. Since ' REQUEST FOR CITY Cu JNCIL ACTION May 17, 1993 Page three Dwight's and Sunny's beach concessions can offer the same services as Maxwell's sublease concessions, staff is in favor of Maxwell's being a full-service restaurant per the design submitted by WPL. The income proforma shows the full service facility is estimated to produce consistently more revenue than the existing facility. (Exhibit A) Council rejected the option of renovating the existing structure because it would not address the previously noted issues. After Council reviewed the design, it felt that the proposed restaurant could be constructed under two options. Option 1 would be to build it in the existing location, and Option 2 would be to build it 150 feet south of its current location, using the former location for extra space for the Pier Plaza. (See attached site plans for both options). There are also two funding alternatives for Maxwell's which will be discussed below. OPTION 1 - Rebuilding Maxwell's in current location COST ESTIMATE AND ANALYSIS FOR OPTION 1 IF CITY PAYS FOR MAXWELL'S Maxwell's Construction Demolition $400,000 Utilities 125,000 New Building 2,500,000 Plans & Specification 250,000 Engineering & Inspection 50,000 SUBTOTAL $3,325,000 Associated Costs Business Interruption $280,000 Loss of Lease Revenue 300,000 Loss of Parking Revenue* 25,000 Buyout of Subleases & Loss of Sales Tax 80,000 SUBTOTAL $685,000 TOTAL ESTIMATED COST OF OPTION 1 $4,010,000 *Staff estimates that 25 percent of annual parking revenue in Lot A is attributed to Maxwell's. OOW REQUEST FOR COUNT.- ACTION May 17, 1993 ' Page four PRO CON a) Gives ability to design a restaurant a) Maxwell's would be out of business that would fit into and be compatible with approximately ten to twelve months while the Pier Plaza. demolition and rebuilding occur. b) Allows for the design of Maxwell's b) There would have to be a cost of restaurant to enhance rather than detract business interruption and loss of revenue from the Main Street view corridor. to the city factored into the project cost as shown. c) Provides public rest rooms and a public observation deck as part of Maxwell's. d) Does not require the expense of a special election under Measure C. OPTION 2 - Relocate Maxwell's approximately 150 feet south of its current location COST ESTIMATE AND ANALYSIS FOR OPTION 2 IF CITY PAYS FOR MAXWELL'S Maxwell's Construction Demolition $550,000* Utilities 300,000** New Building 2,500,000 Plans & Specification 250,000 Engineering & Inspection 50,000 SUBTOTAL $3,650,000 Associated Costs Business Interruption $0 Loss of Lease Revenue 0 Loss of Parking Revenue 25,000 Buyout of Subleases & Loss of Sales Tax 80,000 Measure "C" 150,000 Additional Pier Plaza Costs 1,005,000 SUBTOTAL $1,260,000 TOTAL ESTIMATED COST OF OPTION 2 $4,910,000 'Demolition is more expensive under Option 2 because the old building and parking have to be demolished to construct the new building south of its current location. "Utilities are more expensive under Option 2 because they have to be brought to the new location. REQUEST FOR CITY COUNCIL ACTION May 17, 1993 Page five PRO CON a) Moves Maxwell's out of the Main a) Puts Maxwell's adjacent to Dwight's Street view corridor. concession at the beach which would cause conflicts with parking and access for the two lessees. b) Provides space for larger development of Pier Plaza area. b) Greater cost because of larger Pier Plaza and bringing utilities to new location. c) Avoids downtime for Maxwell's restaurant operations. c) Would require a new parking structure on the beach parking lot to make up for the loss of parking taken up by the relocation and additional plaza space. d) Requires new Coastal Commission entitlements. e) Requires a vote of the people under Measure C. If not approved, City would have to do Option 1 or demolish or rehab existing building. Staff is recommending Option 1, rebuilding Maxwell's within its existing footprint. There are two funding alternatives for Option 1, the city could pay for the rebuilding as shown above, or WPL could pay for the rebuilding. The following chart shows the General Fund proforma for Maxwell's 1983 through 1992: YEAR GROSS REVENUE LEASE PAYMENTS 1983 $2,676,870 $214,150 1984 3,303,123 264,250 1985 3,567,637 306,177 1986 3,889,787 311,391 1987 3,990,037 319,830 1988 3,949,224 315,967 1989 4,107,092 331,363 1990 3,767,401 303,560 1991 3,137,378 258,170 1992 3,435,157 285,052 REQUEST FOR CITY C"JNCIL ACTION May 17, 1993 Page six As shown, Maxwell's provides approximately $300,000 a year revenue to the city. A re- designed Maxwell's is estimated to provide a minimum gross of$6 million a year, to start, eventually reaching $12 to $15 million over a period of eight to ten years. (Exhibit A) The above proforma for Option 1 where WPL pays for Maxwell's seems to be the best option for the city. It would keep the current city revenue flow of$300,000 per year for the first three years and then increase the revenue to the general fund in years after that. (Exhibit A). The new Maxwell's would also increase sales tax, possessory interest tax and parking revenues to the city. GENERAL FUND ANNUAL REVENUE AND EXPENSE ESTIMATES FOR OPTION 1 FUNDING METHODS CITY PAYS WPL PAYS FOR MAXWELL'S FOR MAXWELL'S City Lease Revenue (1) $600,000 $300,000 Possessory Interest Tax (2) 40,000 40,000 Sales Tax (3) 60,000 60,000 Parking Revenue (4) 25,000 25,000 Total City Revenue $725,000 $425,000 Debt Service P & 1 440,000 0 Net General Fund Revenue $285,000 $425,000 (1) Based upon 10 percent of$6 million gross if city pays for Maxwell's and a flat$300,000 if WPL pays. (2) Possessory interest tax is one percent of$4 million Maxwell's improvements. (3) One percent of$6 million food sales. (4) Parking revenue generated by Maxwell's dedicated parking only in parking lot south of pier. If WPL pays for the rebuilding, the city would experience NO COST for a new Maxwell's and could use a portion of unappropriated COPs for the Pier Plaza project. CITY'S ESTIMATED COSTS FOR PIER PLAZA CONSTRUCTION Plaza Improvements $1,500,000 Parking Improvements - South of Pier 500,000 - North of Pier 600,000 Engineering and Design 280,000 Contingency 120,000 TOTAL ESTIMATED CITY COST FOR PIER PLAZA & PIER PARKING LOTS $3,000,000 GENERAL FUND IMPACT FOR PIER PLAZA AND PARKING LOTS '. OPTION I -WPL PAYS FOR MAXWELL'S �. ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE v' YEAR (1)PARKING (2) WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED � REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. $ EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE FOR PIER OPERATION FUND FUND PIER REVENUE SO. OF PIER PLAZA EXPENSE INCOME BALANCE c': 1-. H 1 s0 s0 $0 s0 s0 $0 $270,000 $0 $270,000. ($270,000) (S270,000) 2 $183,000 $300,000 $60,000 $40,000 $25,000 $608,000 f270,000 $55,000 $325,000 f283,000 $13,000 3 $183,000 $300,000 $70,000 $40,000 $25,000 S618,000 $270,000 $60,000 $330,000 $288,000 $301,000 r7 4 $213,000 $300,000 $80,000 $40,000 $25,000 $658,000 $270,000 $65,000 $335,000 $323,000 $624,000 5 $213,000 $350,000 S80,000 $40,000 $25,000 $708,000 $270,000 $70,000 $340,000 $368,000 $992,000 ~' t-' 6 $244,000 $450,000 $80,000 $40,000 $25,000 $839,000 $270,000 $75,000 $345,000 $494,000 $1,486,000 Y 7 $244,000 $510,000 $90,000 $40,000 $25,000 $909,000 $270,000 $80,000 $350,000 S559,000 $2,045,000 Fi (1) Current revenue for north of pier parking lot Is$40,000. The redesign of this lot will produce 306 spaces at$600 per space p annual Income which equals$183,000,or a net increase of$143,000. (2) This figure assumes WPL pays for Option 1 for Maxwells. GENERAL FUND IMPACT FOR PIER PLAZA AND PARKING LOTS OPTION I - CITY PAYS FOR MAXWELL'S ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE YEAR (1)PARKING WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. $ EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE FOR PIER OPERATION FUND FUND PIER REVENUE SO. OF PIER PLAZA EXPENSE INCOME BALANCE 1 SO SO $0 $0 f0 $0 $710,000 $0 $710,000 (S710,000) (S710,000) 2 $183,000 $600,000 $60,000 $40,000 $25,000 $908,000 $710,000 $55,000 $765,000 $143,000 ($567,000) 3 $183,000 $600,000 $70,000 $40,000 $25,000 $918,000 $710,000 $60,000 $770,000 $148,000 ($419,000) 4 $213,000 $600,000 $80,000 $40,000 $25,000 $958,000 $710,000 $65,000 f775,000 $183,000 ($236,000) 5 $213,000 $650,000 $80,000 $40,000 $25,000 $1,008,000 S710,000 $70,000 $780,000 $228,000 (S8,000) W fv 6 $244,000 $750,000 $80,000 $40,000 $25,000 $1,139,000 $710,000 $75,000 S785,000 $354,000 $346,000 00 7 $244,000 $810,000 $90,000 $40,000 $25,000 $1,209,000 $710,000 $80,000 $790,000 $419,000 $765,000 M f► v C- f'A 1 3i o dU �D '� W coo GENERAL FUND IMPACT IF CITY PAYS FOR PIER PLAZA„ ,o AND NO IMPROVEMENTS ARE DONE TO MAXWELLS" � In ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE H 117 YEAR PARKING WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED O REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. $ EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE FOR PIER MAXWELL'S FUND FUND H PIER REVENUE SO. OF PIER PLAZA REPAIR INCOME BALANCE C� 1 $0 $300,000 $30,000 $7,000 $25,000 $362,000 $270,000 $120,000 $390,000 ($28,000) ($28,000) C 2 $183,000 $300,000 $30,000 $7,000 $25:000 $545,000 $270,000 $135,000 $405,000 $140,000 S112,000 3 $183,000 $300,000 $30,000 $7,000 $25,000 $545,000 $270,000 $150,000 $420,000 $125,000 $237,000 4 $213,000 $300,000 $30,000 $7,000 $25,000 $575,000 $270,000 $165,000 $435,000 $140,000 S377,000 5 $213,000 $300,000 $30,000 $7,000 $25,000 $575,000 $270,000 $180,000 $450,000 $125,000 $502,000 y 6 $244,000 $300,000 $30,000 $7,000 $25,000 $606,000 $270,000 $195,000 $465,000 $141,000 $643,000 n 7 $244,000 $300,000 $30,000 $7,000 $25,000 $606,000 $270,000 $210,000 $480,00 $126,000 $769,000 Q z "assumes Health and/or Building Departments don't close Maxwell's. GENERAL FUND IMPACT IF NEITHER MAXWELL'S NOR PIER PLAZA IS DONE" ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE YEAR PARKING WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL MAXWELL'S PARKING TOTAL NET ANNUAL ACCUMULATED REVENUE LEASE SALES TAX INTEREST PARKING REVENUE ANNUAL MAINT. $ EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE REPAIR OPERATION FUND FUND PIER REVENUE S0. OF PIER COSTS EXPENSE INCOME BALANCE 1 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $70,000 $50,000 $120,000 $282,000 $282,000 2 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $80,000 $55,000 $135,000 $267,000 $549,000 W 3 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $90,000 $60,000 $150,000 $252,000 S801,000 4 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $100,000 S65,000 $165,000 $237,000 $1,038,000 5 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $110,000 $70,000 $180,000 $222,000 $1,260,000 rd v 6 $40,000 $300,000 $30,000 $7,000 $25,000 $402,000 $120,000 $75,000 $195,000 $207,000 $1,467,000 ' 00 7 $40,000 $300,000 $30,000 $7,000 S25,000 $402,000 $1304F000 $80,000 $210,000 $192,000 S1,659,000 fD f., M %�D "assumes Health and/or Building Departments don't close Maxwells. P''' v, Oo w a' rr GENERAL FUND IMPACT IF WPL PAYS FOR OPTION 1 MAXWELL'S r� NO IMPROVEMENTS TO PIER PLAZA ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE O YEAR PARKING WPL MAXWELL'S POSSESSORY MAXWELL'S TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED �7 REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. a EXPENSES GENERAL GENERAL n NO. OF REVENUE REVENUE TAX REVENUE FOR PIER OPERATION FUND FUND H PIER REVENUE SO. OF PIER PLAZA EXPENSE INCOME BALANCE rC 1 $40,000 s0 $0 s0 SO $40,000 $O $100,000 $100,000 (S60,000) (S60,000) 2 $40,000 $300,000 $60,000 $40,000 $25,000 $465,000 SO $155,000 $155,000 $310,000 $250,000 3 s40,000 $300,000 $70,000 $40,000 $25,000 $475,000 - $O $160,000 $160,000 $315,000 $565,000 4 $40,000 $300,000 $80,000 $40,000 S25,000 $485,000 $O $165,000 $165,000 $320,000 S885,000 5 $40,000 1350,000 $80,000 $40,000 $25,000 $535,000 $O S170,000 $170,000 $365,000 $1,250,000 > 6 $40,000 $450 000 $80,000 $40,000 $25,000 $635 000 s0 $175 000 $175 000 $460 000 $1 710 000 0 7 $40,000 $510,000 $90,000 $40,000 $25,000 $705,000 $O $180,000 $180,000 $525,000 S2,235,000 c� z GENERAL FUND IMPACT IF CITY PAYS FOR PIER PLAZA AND MAXWELLS IS REMOVED FROM THE BEACH ESTIMATED REVENUE ESTIMATED EXPENSES NET REVENUE YEAR PARKING WPL MAXWELL'S POSSESSORY NEW TOTAL COP DEBT PARKING TOTAL NET ANNUAL ACCUMULATED REVENUE LEASE SALES TAX INTEREST PARKING REVENUE SERVICE MAINT. & EXPENSES GENERAL GENERAL NO. OF REVENUE REVENUE TAX REVENUE FOR PIER OPERATIONS FUND FUND PIER REVENUE SO. OF PIER PLAZA INCOME BALANCE 1 s0 s0 s0 $O s0 $0 $370,000 $O $370,000 ($370,000) (S370,000) 2 $183,000 $O s0 s0 $25,000 $208,000 $370,000 $55,000 S425,000 ($217,000) (S587,000) 3 $183,000 s0 $O s0 $25,000 $208,000 $370,000 $60,000 $430,000 (S222,000) ($809,000) 4 $213,000 $O $O $O $25,000 $238,000 $370,000 S65,000 $435,000 (5197,000)(S1,006,000) 5 $213,000 s0 $0 s0 $25,000 $238,000 $370,000 $70,000 $440,000 ($202,000)($1,208,000) W 6 $244,000 s0 s0 s0 $25,000 $269,000 $370,000 $75,000 $445,000 (S176,000)($1,384,000) (D 7 $244,000 s0 s0 s0 $25,000 $269,000 $370,000 S80,000 $450,000 ($181,000)($1,565,000) v N• w REQUEST FOR CITY COUNCIL ACTION May 17 , 1993 Page ten With either Maxwell's option and funding method, the city must proceed with the Pier Plaza and the north and south of the pier parking lots simultaneously with the rebuilding of Maxwell's, as the new design of Maxwell's is dependent upon the new entry into the parking lots. INTERNATIONAL SURFING MUSEUM OPTIONS The beach master plan shows the H.B. International Surfing Museum being located within the north of the pier parking lot. As designed, the master plan could be implemented with or without the museum depending on the H.B. International Surfing Museum Foundation's ability to raise funds for the project. Although staff would recommend adopting the master plan showing the museum location and proceeding with entitlements under this master plan, if the foundation does not raise the required funding, the rest of the master plan improvements can be implemented and this space would simply become a beach conces- sion, rest room, and plaza area. Staff is working closely with the foundation to try to find a major sponsor to build the $5 million facility. FUNDING SOURCE Unused COPs that were sold for the canceled north of pier parking structure. ALTERNATIVE ACTIONS 1. Option 2 - Relocate Maxwell's approximately 150 feet south of its current location. 2. Option 1 - Rebuild Maxwell's in its current location at city expense. 3. Remove Maxwell's building from the pier area and do not rebuild. 4. Direct staff to redesign the beach master plan based upon new Council direction. ATTACHMENTS Exhibit A Site plans with Surfing Museum, and Options 1 and 2 Wimmer letter of 1/11/93 re maintenance expenditures Wimmer letter of 1/11/93 re WPL option for funding Wimmer letter of 7/8/92 re rebuilding plans WPL Preliminary floor plans for Maxwell's (4) Floor plans for H.B. International Surfing Museum (2) Letter from Purkiss-Rose RSI FIS RH:cs r\'D purkisserose - YS1 April 20, 1993 Ron Hagan Director of Community Services City of Huntington Beach,,,,,,,, w 2000 Main Street :W .... Huntington Beach, CA 92648 Subject: Fee Proposal to Provide Professional Design Services for the Pier Plaza Dear Ron: We are pleased to have this opportunity to present our fee proposal for the Pier Plaza and move;on to the next phase. From all we,h successful. The new Pier Plazear, the opening of the new piez�has proven to bea.will expand the usable space, provide a tremendous opportunity for programming of special events, and do wonders for the overall image of Huntington Beach. Enclosed please find our breakdown of professional fees as requested. Sincerely, Step se, A.S.L.A Landscape Architect :a��sc�pe=, chnecture :-ea'inn and Park Panning PROFESSIONAL FEES Task 1: Specific Plan ► Meeting with public agencies and task force for input and approvals ► Design process through Master Plan approval, prepare entitlement documents and specific plan $50,000.00 Task Two: Coastal Development Permit ► Meet with City. staff ► Prepare all CDP documents $ 3,000.00 Task Three: Design Development and Construction Document Phase ► Meetings with City staff for input, obtain approval and coordinate project $ 7,500.00 ► Design development to layout all specific elements, details and special features for City and state review and approval prior to starting working documents. $15,000.00 ► Develop a comprehensive set of construction docum_e-is for implementation: * Planning and landscape architectural services: $87,000.00 Hardscape, landscape, irrigation, site amenities * Civil engineering: $75,000.00 Grading, drainage, horizontal and vertical control, utility plan * Architectural: $28,000.00 Restroom, concession, kitchen design, mechanical, structural, plumbing * Electrical Engineering: $25,000.00 New services, site lighting, beach lighting, restroom and concession, communications and public address systems * Geo-Technical: $ 6,500.00 Foundation report, water table and field exploration * Structural Engineering: $ 2,500.00 Retaining walls * Agronomist: $ 500.00 Soil nutrient test ► Prepare construction cost estimates Inc. Task Four.- Contract Administration ► Consult with City staff and contractor during the duration of the project. Approve submittals, approve quality of work and as-built drawings $50,000.00 Total Fee: $350,000.00 CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION WWINCTON BEACH TO: MICHAEL T. UBERUAGA FROM: ROBERT J. FRANZ, DEPUTY CITY ADMINISTRATOR SUBJECT: REQUESTED APPROPRIATION TO FUND THE REBUILDING OF MAXWELLS RESTAURANT, FIS 93-53 DATE: APRIL 14, 1993 As required by Resolution 4832, a Fiscal Impact Statement has been prepared for the proposed use of $3,500,000 to fund the design and rebuilding of Maxwell ' s Restaurant at its current location. Upon approval of the City Council , the balance of the undesignated, unreserved 1986 COP Fund would be reduced by $569,493 to $2,158,668 while that of the 1989 COP Fund would be reduced by $2,430,507 to $0. The final requested appropriation for $350,000 to fund design costs would reduce the balance of the unreserved, undesignated Parking Authority Fund b $350,000 t $7,600. i' Robert J. rarcz Deputy City Administrator RJF:sd WPADSERT: 1389 Exhibit A MAXWELL'S PRO FORMA & RENTS Figures provided by Paul Wimmer, WPL Industries, Inc. YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Maxwell's 3,000,000 4,000,000 4,500,000 5,000,000 6,000,000 Banquet 2,000,000 3,000,000 3,500,000 1 4,000,000 5,000,000 Entertainment 1,000,000 1,000,000 1,500,000 2,000,000 2,000,000 TOTAL SALES 6,000,000 8,000,000 9,500,000 11,000,000 13,000,000 Total Rental 520,000 720,000 870,000 1,020,000 1,220,000 City Portion 300,000 300,000 300,000 360,000 450,000 Balance Available 220,000 420,000 570,000 670,000 770,000 Interest 220,000 418,000 323,000 301,000 267,000 Principal 95,000) 2,000 247,060 369,000 503,000 LOAN PRINCIPAL 3,500,000 3,593,000 3,346,000 2,977,000 2,474,000 YEAR 6 YEAR 7 YEAR 8 YEAR 9 Maxwell's 7,000,000 7,000,000 7,000,000 7,000,000 Banquet 5,500,000 5,500,000 5,500,000 5,500,000 Entertainment 2,500,000 2,500,000 2,500,000 2,500,000 TOTAL SALES 15,000,000 15,000,000 15,000,000 i 15,000,000 Total Rental 1,420,000 1,420,000 1,420,000 1,420,000 City Portion 510,000 510,000 576,000 1,420,000 Balance Available 910,000 910,000 910,000 ! Interest 222,000 160,000 69,0001 Principal 688,000 750,000 775,000 LOAN PRINCIPAL 1,786,000 775,000 0 ! u � o � � DIT MA" \ I sTn�T STREET MCFIC C043T HGM wT. m .q I I' Il III III ;I illf� II �• �• '11 I ' � � iIIiIIII��I ILJ I I 1 11 gill d I I' g 1. �- II OPTION 1 PIER PLAZA MASTER PLAN Cac[aw,M41 �" HUNTINGTON BEACH,CA. © I I I L-q � ® �#' -31r —�— � —#- ---*-- -- STREET It1NE[fiEp nkcr COAST111I wor,w,r F 1 fill / G m woAre nenReq r ' I II I I IIII III!iI !! J I� '' II i!II !'IIII IIL�.�.I! II —{! �� I� � , I � � �� \; i I IIIII If �f d IA 'III.®.� -•i B I Aak I I I I Ili i:llll! !lilt li:lii I # +k III III II ®a , _::..:.........:..... I II" I I !III I'A rA,nvEu. # IIII I I OPTION 2 PIER PLAZA MASTER PLAN y .,HUNTINGTON BEACH CA }i = e ' 1 � Ul _ l 16W H IYY Lo SWTH ® MAN STREET STNEEf STNEET �--. Ikci1C COAST Nb11MT. _ ® _ �iIT1BT—tlTe C3 II III T, I Ql ii!IO;j I I 0 A /1 ill III I' ...-- ii I I ,• l cm CA wUtTi[u7 I I I "'°p m"!"" * PIER PLAZA MASTER PLAN HUNTINGTON BEACH,CA. January 11, 1993 Mr. Ron Hagan Director, Community Services City of Huntington Beach 2000 Main Street Huntington Beach, Ca 92648 Dear Ron: As per your request at our meeting of December 19, 1992, the following is a recap outlining the approximate ADDITIONAL expenditures for maintenance that was spent in the last two years on "bandaids" to keep the business going. Kitchen Flooring $51,000 Lighting 22,000 Electrical 8,200 Plumbing 17,000 Sprinkler 8,500 Booth & Carpeting 6,500 General Maintenance 12.000 TOTAL $125,200 These sums do not include normal maintenance for each of the two prior years which amount to approximately $50,000 per year. Our biggest problem area is in the kitchen where the flooring really needs to be replaced, a project that would close us down for 6 to 8 days with that resultant loss of business and a cost in excef$100,000 including electrical and plumbing rework of that area only. These figures also do not reflect the intangible loss of business when interruptions due to electrical and plumbing failures cause inconvenience or discomfort to our customers. Beyond that, these additional and unusual cost can only go up the longer the building remains in its' present condition. Sin ly, PAUL E. YVqMMER President MXX�' BY THE SEAooe 317 Pacific Coast Highway • Huntington Beach, CA 92648 • (714)536-2555 January 11, 1993 Mr. Ron Hagan Director, Community Services City of Huntington Beach 2000 Main Street Huntington Beach, Ca 92648 Dear Ron: In connection with our discussion of December 29, 1992 which included Don Watson, as it pertained to the Financial Proposal you sent to me, dated December 4, 1992, I would like to outline my thoughts at that meeting. Assuming that we will be able to find an entity that would advance the money necessary to re-build Maxwell's, there are certain things that will be necessary to satisfy some of the requirements of such a lender. Primarily, the ability to repay such sums including reasonable interest. For the purposes of my projections, I have taken a figure of$3.5 million as the high end as I believe that we should be able to bring the project, including business interruption, in for that amount. Rental payments to the City would cease after the closing and would resume one month after re-opening and the lease term would be suspended during closure. Potential lenders or investors seem to retain interest in a project only as long as the time line remains viable for them. In view of that fact, and based on the length of time usually necessary to secure a new lease, the changes I am proposing in this letter, plus an additional 10 year option period, could be handled in an addendum to the present lease, with all other provisions remaining in effect. After re-opening, a minimum rental payment of$300,000 per year should be made to the City. The excess, based on the lease terms, would be applied to interest and principal of the building costs, as fixed by final audit, payable to the entity that has advanced these costs. These payments, including interest of 9% would be made until that debt is retired. In order to make up the initial projected short fall, these would accelerate based on a formula that would be structured so that all rentals between the base of the $300,000 paid to the City, up to a maximum of those rents on $10 million, would go to that entity. Rentals on sales in excess of $10 million would be shared equally between the City and the lending entity. The rental structure would remain fixed as per the present terms, but new minimu established each five years, base on 80% of the average of the past 5 years of busi Potential lenders/investors have expressed concern about the ambiguous language c the lease in connection with the parking dedicated to Maxwell's. In view of the s ope e project, I believe that the addendum should also address this issue. MAWU[rs T'D SY THE SEA ' 317 Pacific Coast Highway 9 Huntington Beach, CA 92648 9 (714)536-2555 In view of what has happened, or more importantly, what has not happened, I think a project of this size and scope can only enhance the City's investment in Downtown and the Pier area. Our projected plans for a dramatic, upscale moderately priced restaurant with ample decking, a major entertainment complex and first class banquet/meeting room facilities, along with the City's plan for the Plaza and Surf Museum, would go a long way to completing a major statement of our City's heartbeat! To say nothing of the increased revenues from tax increments, real estate taxes and potential customer base for the new Downtown area!! Sincerely, PAUL E. WIMMER President BY THE SEA 317 Pacific Coast Highway• Huntington Beach, CA 92648 • (714)536-2555 AAXWELUS Qy TUE sue► 317 Pacific Coast Highway Huntington Beach, Ca 92648 July 8, 1992 TO: The Right Honorable Mayor and Members of the City Council. Staff Members of the City of Huntington Beach. In several meetings over the past few weeks with Mr. Ron Hagan,we have discussed the future of Maxwell's as it would be affected by the proposed Plaza. Mr. Hagan asked me to arrive at a preference as to which course to pursue from the three that seem to be the likeliest possibilities. We discussed and explored the relocation of Maxwell's to a spot just South of the present site, adjacent to the proposed new Plaza. The uncertainties and the length of the approval process,because of the conditions imposed by Measure C, make this a risky and costly undertaking at best. So a major portion of our time was spent in analyzing the other two alternatives, remodeling the existing structure or demolishing and rebuilding on the present site and approved footprint. What follows then is our preferences, observations and rationale for a course of action that seems to make the most sense. I am in favor of demolition and rebuilding for a number of reasons, prime among these being: 1. Shorter length of down time which helps both the City and ourselves financially. 2. Greater architectural freedom when starting with a 'blank sheet of paper" will enable the City to erect a building that will make a strong visual statement for the cornerstone of the new Downtown. 3. A more substantial return for all involved on the investment to accomplish this. In discussions with our architect and contractors regarding the merits of remodel versus rebuild, the following appraisals seemed to be unanimous. 1. The construction time in remodeling will be longer than new construction due to the need for selective demolition and extensive underground work. Partial demolition and remodeling always uncover expensive surprises. This is especially true with a building such as Maxwell's where no blueprints of the original structure exist. 2. The building height would need to be increased to hide the old trussed roof. 3. The bottom floor is very limited for its intended use as a banquet facility due to numerous columns (very expensive to replace) and the existing excavation limits use of the project footprint by one third. 4. The buildings age severely limits the layout of,a "State of the Art" facility. In connection with the choice of an architect, Mr. Jerry Yates has been associated with all the planning processes that have taken place over the past seven years for Maxwell's. His knowledge of the building and the engineering come from surveys that he performed for us at our expense. He has interfaced with many departments of the City and other developers as they have affected the various phases of this project and was involved with the recent study made for the City outlining the feasability of remodeling. In addition, Mr.Yates has become intimately familiar with our vision for the building and its' uses. We strongly recommend that he be selected as the building architect. You will see at this meeting the building we have designed and for the most part, it speaks for itself. I would, however, like to paint a small word picture which will better explain how we intend to maximize the use of the building and thus arrive at the greater return on this kind of investment for both of us. As I stated before,we have ahead of us the ability to turn this into a landmark to be proud of. A building that combines beauty with functionality, beckons to all and seems like "W. My goal is to make such a strong statement with the building and its' beach appeal, that anyone who was going to drive by,would turn around and come back! We do this with a visually beautiful building that speaks of activity and expansive decldng with bright colors that beckon to all to come and enjoy our beautiful beach and activities. Obviously, the uses for the areas are greatly expanded and I would hasten to add, present a greater use for our citizens than previously. With this renewal, it will be our goal to take Maxwell's out of the perceived special occasion restaurant, and make it a gathering place for all those seeking fun and dining adventures. THE OYSTER BAR AND LOUNGE. With an additional entrance directly from the Pier and large decking around it, this facility will attract a new customer to our oyster bar for less expensive dining in a more casual atmosphere. Our Jazz format will be maintained and expanded as we add a proper facility to accommodate such acts. We intend an active happy hour with piano music in the late afternoon. Friday afternoon 'Tea Dances"with big bands are among the events we plan. Lastly, we would join with some of the other venues in the County in order to bring major entertainment on an irregular basis to Maxwell's, along the lines of The Crazy Horse in Santa Ana or the Coachhouse in San Juan Capistrano. DINING ROOM OPERATION. The dining areas will be light and airy with more room and a larger expanded terrace seating area. The appearance would be more informal and thus less intimidating with a wider menu range along with pricing range. It would still retain its ability to draw for those special occasions but also expand to draw a broader customer base. BANQUET FACILITIES. We have for years discussed the need for this with the City. The requests for parties and banquets that we cannot accommodate are countless. This will provide an opportunity for the community that should enable us to keep our people here in Huntington Beach rather than to have to seek elsewhere. Steve Bone and Diane Baker have seen these plans and are enthusiastic about the potential for increased opportunities for commercial applications. We would work closely with them and any other agencies to solicit convention and meeting business. The area is large enough for major functions and can be divided into smaller components. It is our intention to be very aggressive in the wedding market and our pricing structure and support facilities will make this very appealing. We intend to maximize the location on the sand,while creating a visual buffer between it and the building to encourage greater utilization of the area as a backdrop for special events, including actual wedding ceremonies. Mr. Hagan has also commented on the possibilities of a gazebo type building at the base of the contoured sloping access to the beach on the North side of the pier as the possible site for wedding ceremonies. The potential to capitalize on all these elements is limitless. THE CROWS NEST LOUNGE. This area will feature our magnificent view and again terrace opportunities. We intend to make it possible to use for seminars or small meetings during the day. It will also provide an area for people when a major attraction is appearing in the main show lounge. ALL OF THESE ELEMENTS WILL BE ACCOMPLISHED WITH A LOWER OVERALL ROOF.LINE AND MORE ATTRACTIVE ARCHITECTURAL ELEMENTS!! The plans for the Plaza show that the entrance to all of this area will be located further South. Signage for Maxwells, the banquet area and the show lounge will be essential and must be taken into consideration as well as marked accessibility for Northbound traffic. The Green Burrito issue will need to be addressed and of course the down time costs for both of us. We obviously will not retain all of our personnel but key management and staff will have to be retained. Those contracts and leases of goods and or services that we cannot negotiate a moratorium on, will have to be included as well as loss of profits. We expect the City to erect the building, bringing the utilities to the point of hookup to our equipment. We will furnish, fixturize and finish the interiors and patios. The projected cost of this refurbishment is in excess of $2,000,000. If we are able to complete this projected rebuilding of Maxwell's, we anticipate a starting gross revenue of$7,000,000 per year. Our sales prior to the recession and closing of the Pier were close to $4,000,000 and we expect the increased lounge and entertainment activity, coupled with the entry from the pier, to increase those revenues by $1,000,000. In addition, the banquet facility is anticipated to add $2,000,000 in revenue in the first year of business. We will begin to market that facility as soon as we have final plans and can produce artists renderings as a sales tool. At the $7,000,000 level, the City would receive rent of $620,000 per year (based on 8% of the first $4M and 10% of the excess) not to mention the sales tax increment return. We expect in ensuing years that our gross sales will exceed $10M!! From a business standpoint alone, this course certainly would seem to make sense. If we were to pursue a course of remodeling the existing structure, the constraints of the building would limit our gross sales to the neighborhood of$5M. In addition, it would not give us any of the advantages previously discussed. At the date of this writing, I have ` not been able to discuss some of the aspects of these dealings with our attorney, Mr. Barry Ross. By the time we meet on Monday however, I will have met with him and will address any other issues he deems pertinent at that time. I will be more than happy to discuss any aspects of what we propose with any of you at any time. I am delighted that we stand on the threshold of being able to build a "landmare together for years to come for many to enjoyll Sincere , c."e C PAUL R VaNDAER President 6 wins Cellar kltehea .I f.f N f.rf M f.11s.r � O banquet one banquet two banquet three ( g N..N... I axle$plx I I _ j Courtyard prefunctiori ' I rnw I beach level Iplan ' 9 l s F e ' t .,.NMN. wuna. N _. httob�ri NMM —~ b o_ KA g -- Iw• oyster b&rAounge OOO OOO OHO OOO dining two O O \•N M O O O O 0,0 O O �•s••� OO pier Q O Patio 0 O O �� 00 p.c.h.level•plan 0 8 16 32 service area crows nest 660 of Poll 6660 at banquet 7160 of total 1ae6Oaf building area 60168 of l A-SSOC. nNrtalmr' .� - dnaa'p manager's office W .-Storage 1� e 13 �z0 I g p� o 0 0 'crow**mat a j I ; I r• ` 1 third level plan 0 8 1e 32•. PROMPOL "" w C s i w' Q . �Q p.c.li.elevation ( g 0 8 16 32•. d NJ d � g II • = beach elevation 0 8 16 32.. Q c� s . e. Mld °+YFA INTUNATIONAt RECEIVED AND MADE A FART OF THE RECORDt la IN MEETING ITEM NO. 1111NTINcTON AE.4r.N OFFICE OF THE tlt� .: ERK JY `. Can .B��V�Y 24 May 1993 Mayor Winchell and City Council: ` The Huntington Beach International Surfing Nlus"emw,,,toncept has been before previous councils since 1985, During t '?tspresentations various plans and locations have been proposed� ;;Ey� uitn of thought and plans bring this current proposal to- ;you:= ar.-:Qne°r'; hat addresses most needs of our own community and the expandci ;cnunty from whence all visitors come. ``: At one time, the city Redevelopment "Ag i y,�,;tMd ,; agreed to build the shell. r, The current proposal installs the pad for ','tile >building and provides infastructure. Our city is indeed fortunate that volunteers`. have , produced an interim museum that allows for great publicity. The economic benefit of the museum to the tourism industry as well as retail, restaurant, manufacturing has been well "documented. As we see the disruption of occasional promotional: events in the downtown, the benefit of a 364 days a year draw to our area .is evident. We are designing and building this plaza for the.-Y-next 50 years. Visionary plans are our need. The museum is producing a short video pre�on , ,.ion to develop community awareness and support. x,. We are also producing a feature film as,:.a". aOr::fcind raiser. We have been blessed with talented "and ,�dedicated volunteers to bring us this far and to completion. REQUEST FOR CITY COUNCIL ACTION Date May 28, 1991 Submitted to: Honorable Mayor and City Council Members Submitted by: Michael T. Uberuaga, City Administrator Prepared by: Ray Silver, Assistant City Administrator Qpi,X Subject: Review of Alternative Scenarios for Pier Area Development Consistent with Council Policy? (X] Yes ( ] New Policy or Exception Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: STATEMENT OF ISSUE: The city is in the process of improving the pier area. Council needs to review the alternative development scenarios for the pier`area and direct staff on implementation strategies. RECOMMENDATION: 1. the two staff defined scenarios for the development of the pier area. 2. Determine i either scenario contains projects which should be placed on the November, 1991 ballot for a public vote. 3. Direct staff to bring back to Council the appropriate documents o place the specified projects on the November, 1991 ballot. W1 G" o N ly �1�S►JJ. �QS'}R.NN A h '�n+S p4//o f-- ��C-"t y fret ANALYSIS: 11 .vp rll" v The city is considering a number of pier area projects. The projects are the construction of the pier, pier plaza, pierside restaurants, pier buildings, additional bluff bottom parking and north of the pier parking lot reconstruction south of the pier beach improvements, and relocation or refurbishment of Maxwell's Restaurant. To best assure the orderly development of these projects, staff has prepared two scenarios. The principal variation in these two alternatives is the inclusion or exclusion of the Pierside Restaurant project. This in turn affects the location and extent of the renovation of Maxwell's Restaurant and the configuration and size of the Pier Plaza. Staff has provided descriptions for each major project that is being considered in the pier area. Where possible, cost estimates and funding sources are identified, along with estimated dates of completion. If Council desires to place any of the projects described in this report on the November 1991 ballot, it will be necessary for certain actions to be approved in the next few months. RCA Page 2 FUNDING SOURCE: General Funds, Redevelopment Funds and Developer Monies. ALTERNATIVE ACTION: 1. Modify the pier area development scenarios to reflect Council identified issues that are not listed. 2. Eliminate one or more of the scenarios as described in the report above. RS:lp 4753a PIER AREA DEVELOPMENT SCENARIOS AND ESTIMATED TIME SCHEDULE PROJECT NAME SCENARIO I SCENARIO II EST. COST & EST. DATE OF (WITH PIERSIDE) (NO PIERSIDE) FUNDING SOURCE COMPLETION PIER CONSTRUCTION PROJECT CURRENTLY UNDERWAY AND SAME AS SCENARIO I TOTAL PIER COST EST. TO BE $10 MIL. SPRING 1992 ON SCHEDULE FUNDING SOURCES INCLUDE PRIVATE FUND RAISING, FEDERAL, STATE, AND COUNTY FUNDS, COPS, AND A LOAN FROM THE WATER FUND. AN ESTIMATED $1 MIL. IS STILL NEEDED TO COMPLETE FUNDING. PIER BUILDINGS CONTRACT HAS BEEN AWARDED FOR SAME AS SCENARIO I $800,000 TO $1,500,000 SPRING 1993 FINAL DESIGN OF PIER BUILDINGS. DEPENDING ON FINAL DESIGN COUNCIL SHOULD APPROVE FINAL DESIGN BY SPRING 1992. CONSTRUCTION SHOULD START IN FALL OF 1992. PIER PLAZA THE PIER PLAZA WILL HAVE TO BE UNDER THIS SCENARIO THE PIER SCENARIO I SCENARIO 1 BUILT IN THREE PHASES. THE PLAZA WOULD STILL HAVE THREE PHASE ONE: $150,000 PHASE ONE: SPRING 199 FIRST PHASE IS TO DESIGN AND PHASES, HOWEVER THE PLAZA WILL PHASE TWO: $750,000 PHASE TWO: FALL 1992 CONSTRUCT A CONNECTION BETWEEN TAKE A DIFFERENT SHAPE AND THE PHASE THREE: $750,000 PHASE THREE: SUMMER 199 THE PIER AND PCH. COUNCIL COST WILL BE DIFFERENT. THE SHOULD APPROVE THIS DESIGN BY SCHEDULE FOR PHASES ONE AND TWO SCENARIO II SCENARIO II FALL 1991. CONSTRUCTION SHOULD WOULD BE THE SAME AS IN PHASE ONE: $150,000 PHASE ONE: SPRING 199 TAKE PLACE DURING SPRING 1992. SCENARIO I. WITHOUT THE PIERSIDE PHASE TWO: $300,000 TO $500,000 PHASE TWO: FALL 1992 THE SECOND PHASE OF THE PIER RESTAURANTS, PHASE THREE WOULD BE PHASE THREE: $300,000 TO $500,000 PHASE THREE: SPRING 199 -. PLAZA INVOLVES THE NORTH OF THE CONSTRUCTED EITHER AROUND THE PIER AREA AND INCLUDES STAIRWAY EXISTING LOCATION OF MAXWELL'S OR FUNDING IS PROPOSED TO COME FROM ACCESS TO THE BEACH, AFTER MAXWELL'S HAS BEEN THE COP'S THAT WILL NOT BE NEEDED LANDSCAPING, AND PLAZA ENTRY TO RELOCATED DEPENDING ON FOR THE NORTH OF THE PIER PARKING THE PIER. THIS PHASE SHOULD BE COUNCILS DECISION ON WHAT TO DO STRUCTURE. DESIGNED BY SPRING 1992 WITH WITH MAXWELLS. IF MAXWELL'S CONSTRUCTION DURING SUMMER 1992. STAYS WHERE IT IS PHASE THREE THE THIRD PHASE IS THE SOUTH OF WOULD BE CONSTRUCTED WITH PHASE THE PIER AREA. UNDER THIS TWO. IF MAXWELL'S IS RELOCATED SCENARIO THE PHASE THREE DESIGN PHASE THREE WOULD BE CONSTRUCTED WILL BE DONE CONCURRENT WITH AT THE SAME TIME AS MAXWELL'S THE DESIGN OF PIERSIDE DURING RELOCATION. SPRING OF 1992 WITH CONSTRUCTION IN SUMMER 1992 . PAGE 2 SCENARIO I SCENARIO II EST.COST & EST. DATE OF PROJECT NAME (WITH PIERSIDE) (NO PIERSIDE) FUNDING SOURCE COMPLETION PIERSIDE RESTAURANTS COUNCIL MUST ADOPT A RESOLUTION WITHOUT THE PIERSIDE RESTAURANTS, FUNDING FOR PIERSIDE WILL BE SCENARIO 1: SUMMER 1995 BY AUG 1991 TO PLACE THE PIERSIDE IT WILL BE NECESSARY FOR COUNCIL PROVIDED BY PRIVATE FUNDS AND THE RESTAURANTS ON THE NOV BALLOT FOR TO DECIDE WHETHER 14AXWELLIS REDEVELOPMENT AGENCY. THE ESTIMATED SCENARIO I1: N/A A PUBLIC VOTE. IF THE PROJECT IS RESTAURANT SHOULD REMAIN WHERE COST TO THE AGENCY IS $3 MIL. APPROVED BY THE VOTERS, THE IT IS AND BE REFURBISHED OR BE FUNDING FOR MAXWELL'S UNDER COUNCIL WILL NEED TO TAKE CERTAIN RELOCATED AND REBUILT FURTHER SCENARIO II WOULD COME FROM THE ACTIONS DURING THE NEXT FEW YEARS. SOUTH. IN EITHER CASE IT WILL REDEVELOPMENT AGENCY AT A COST OF EXHIBIT A OUTLINES THE CHRONOLOGY BE CONSTRUCTED WITH PHASE THREE S.5 M1L.TO $1 MIL.DEPENDING ON OF THESE ACTIONS THAT WILL NEED TO OF THE PIER PLAZA. IF MAXWELL'S STAYS WHERE IT IS OR OCCUR TO COMPLETE PIERSIDE. IF ALL IS RELOCATED. ACTIONS ARE TAKEN, PIERSIDE SHOULD BE UNDER CONSTRUCTION IN SPRING 1993. IF LITIGATION IS INITIATED AGAINST THE PROJECT AFTER IT IS APPROVED BY THE VOTERS, IT COULD CAUSE UP TO A TWO YEAR DELAY IN THE CONSTRUCTION START TIME. NORTH OF PIER PARKING AND BEACH THERE ARE TWO MAJOR PROJECTS UNDER SAME AS SCENARIO I THE NORTH OF THE PIER PARKING LOT SUMMER/FALL 1992 IMPROVEMENTS THIS CATEGORY. THE CURRENT RECONFIGURATION AND RECONSTRUCTION PARKING LOT DIRECTLY NORTH OF THE WILL COST APPROXIMATELY $1 MIL. PIER WILL BE RECONFIGURED AND THE 11TH ST. TO GOLDENWEST BELOW RECONSTRUCTED. THE SECOND PROJECT THE BLUFFS PARKING LOT WILL ALSO INVOLVES THE DEVELOPMENT OF A COST APPROXIMATELY $1 MIL. PARKING LOT BELOW THE BLUFFS FUNDING FOR BOTH PROJECTS WILL BETWEEN 11TH ST. AND GOLDENWEST. COME FROM THE UNUSED COP'S AND THIS PARKING IS NECESSARY TO ALREADY ALLOCATED DOLLARS IN THE REPLACE PARKING LOST DUE TO THE 1991-1992 CIP FUND. WIDENING OF PCH. IT WILL ALSO IMPROVE ACCESS TO THE BEACH IN THIS AREA. THIS SHOULD RESULT 1N OVER 500 ADDITIONAL PARKING SPACES. SOUTH BEACH PARKING A COUNCIL APPROVED TASK FORCE IS SAME AS SCENARIO I THE ESTIMATED COST FOR ALL SUMMER 1993 AREA IMPROVEMENTS CURRENTLY SETTING RECOMMENDED IMPROVEMENTS IS $2.8 MIL. $1.1 MIL. PRIORITIES. PROJECT INCLUDES IS AVAILABLE IN THE PARKING SEPARATING WHEEL AND NON-WHEEL AUTHORITY CAPITAL FUND BALANCE AND TRAFFIC ON THE SERVICE ROAD, NEW $1 MIL.IS BEING RECOMMENDED FROM RESTROOMS, LANDSCAPING, ENTRY WAYS, THE COPS. THE REMAINING FUNDING SIGNAGE , AND PARKING LOT WOULD COME FROM FUTURE PARKING IMPROVEMENTS. COUNCIL SHOULD ADOPT REVENUE. THE MASTERPLAN IN THE FALL OF 1991. FINAL DESIGN SHOULD BE DONE SUMMER 1992 WITH CONSTRUCTION TO BEGIN IN FALL OF 1992. DEPENDING ON FUNDING PROJECT MAY HAVE TO BE PHASED. EXHIBIT A ECONOMIC DEVELOPMENT DEPARTMENT OPTION 1 — Construct Pierside, if approved by Voters No Litigation Litigation (estimated at 2 years) 1) City Council action on Amended Lease 07/17/91 07/17/91 2) Coastal Development Permit approved 07/91 07/91 3) Pierside Restaurants approved by voters l l/5/91 l l/5/91 4) Litigation filed (2 years to resolve) — 12/91 — 12/93 5) Maxwell's Amended Lease approved 01/92 01/94 6) Developer submits final building plans 06/92 06/94 and specifications 7) City approves final building plans 09/92 08/94 and specifications 8) Developer submits evidence of financing 02/93 02/95 9) Agency approves evidence of financing 03/93 03/95 10) City issues building permit 04/93 04/95 11) City provides utilities to site 05/93 05/95 12) Developer commences construction 06/93 06/95 13) Developer completes construction 06/95 06/97 14) Agency issues Certificate of Completion 08/95 08/97 (as built plans submitted and construction costs certified) NOTE: These are outside dates as required under agreement. Project may be developed more quickly than indicated. 9040r