HomeMy WebLinkAboutTermination of Rent Abatement for Certain Tenants at City-Ow City of Huntington Beach
File #: 20-1727 MEETING DATE: 7/6/2020
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Ursula Luna-Reynosa, Director of Community Development
Subiect:
Termination of Rent Abatement for Certain Tenants at City-owned Facilities effective August 1,
2020 and authorize City Manager to reinstate if necessary
Statement of Issue:
Authorize and direct the City Manager to terminate Rent Abatement, effective August 1 , 2020, for
concessionaire tenants leasing City-owned property, which was put in place as a response to the
financial impacts from the COVID-19 pandemic. Additionally, Authorize the City Manager to reinstate
the Rent Abatement if future actions due to COVID-19 severely impact the tenants ability to operate.
Financial Impact:
The rent abatement went into effect in March 2020. The City will have foregone base rent revenue
for the months of March through July, totaling approximately $582,152. Should the City Council
direct the City Manager to terminate the rent abatement, the City expects to collect approximately
$120,994, in base rent only, for the month of August 2020, and decreasing amounts for the following
months as the peak seasonal season comes to an end. Revenue collected will be deposited into
concessionaire lease accounts (10000100.43165; 10000100.43085; 10000100.43095;
10000100.43145; 10000100.43150; 10000100.43155),
Recommended Action:
A) Authorize and direct the City Manager, or his designee, to terminate Rent Abatement to
concessionaire tenants of various City-owned facilities, effective August 1, 2020. A list of the tenants
is outlined in Attachment No. 1 ; and,
B) Authorize the City Manager, or his designee, to reinstate the Rent Abatement if future COVID-
19 pandemic actions severely impact the tenants ability to operate.
Alternative Action(s):
Do no approve the termination of Rent Abatement, and direct staff accordingly.
Analysis:
City of Huntington Beach Page 1 of 2 Printed on 7/1/2020
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File #: 20-1727 MEETING DATE: 7/6/2020
On March 31, 2020, the City Council authorized and directed the City Manager to implement Rent
Abatement effective from the date of issuance of the State of California's Proclamation of State of
Emergency on March 4, 2020, as a result of the COVID-19 pandemic. Since that time, stay at home
orders and social distancing recommendations were implemented by County's Health Officer, which
severely impacted concessionaire tenants' ability to conduct business.
On May 26, 2020, Governor Newsom in conjunction with the County Health Officer transitioned
Orange County into Phase 2 of re-opening, which allowed limited restaurant dining and in-store
shopping with social distancing and other guidelines. In addition, the City re-opened the Huntington
Beach Pier on May 26, and allowed concessionaires to begin limited operations in accordance with
the County's guidelines.
As the County is in the final phases of Stage 3 re-opening phase, the financial impacts of social
distancing and other recommendations have lessened. Many of the concessionaires have seen an
increase in customers and revenue. Therefore, staff is recommending the termination of Rent
Abatement effective August 1, 2020. Staff will continue to encourage that concessionaires abide by
the County's guidelines.
Environmental Status:
The termination of the Rent Abatement impacts lease agreements and modifies payment terms,
which will not result in either a direct physical change in the environment, or a reasonable
foreseeable indirect physical change in the environment as is therefore not a "project" per Section
15378 of the California Environmental Quality Act (CEQA) Guidelines.
Strategic Plan Goal:
Strengthen long-term financial and economic sustainability
Attachment(s):
1. Concessionaire Tenants on City-Owned Property
City of Huntington Beach Page 2 of 2 Printed on 7/1/2020
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ATTACHMENT NO.1
Concessionaire Tenants on City-Owned Property
March Base May-July Base September
Tenant Name Type Rent' April Base Rent Rent Base Rent Business Non-Profit Beach Based SoCalBased
Ruby's Diner Beach Concession $ 9,569.74 $ 10,987.48 $ 10,987.48 $ 10,987.48 x
Let's Go Fishing Beach Concession $ 827.42 $ 950.00 $ 950.00 $ 950.00 x x
Surf City Store Beach Concession $ 827.42 $ 950.00 $ 950.00 $ 950.00 x x
Surf City Store-Servicemark Beach Concession $ - $ - $ - $ - x x
Kite Connection Beach Concession $ 827.42 $ 950.00 $ 950.00 $ 950.00 x x
Duke's Beach Concession $ 31,219.84 $ 35,845.00 $ 35,845.00 $ 35,845.00
HB Visitor's Kiosk Beach Concession $ 177.05 $ 203.28 $ 203.28 $ 203.28 x x x
Zacks Pier Plaza Beach Concession $ - x x
Dwight's Beach Concession Beach Concession $ 735.97 $ 845.00 $ 1,700.93 $ 1,700.93 x x
Jack's Beach Concession Beach Concession $ 735.97 $ 845.00 $ 1,700.93 $ 1,700.93 x x
Kokomo's Surfside Grill Beach Concession $ 800.00 $ 1,601.00 $ 1,601.00 x x
Hilton Beach Cabana Beach Concession $ - x
Hyatt Beach Concession Beach Concession $ 906.15 $ 1,040.40 $ 1,040.00 $ 1,040.00 x
Zack's Too Beach Concession $ 728.14 $ 836.01 $ 1,672.03 $ 836.01 x x
National Link ATM $ - $ - $ -
Fare Share Enterprises Beach Tenant(Telescopes) $ - $ - $ - x
HB Emp.Credit Union City Hall Tenant $ 2,383.84 $ 2,737.00 $ 2,737.00 $ 2,737.00 x
Huntington Harbour Yacht Club City Hall Tenant $ 2,671.27 $ 3,067.01 $ 3,067.01 $ 3,067.01 x
Primo Nosh City Hall Tenant $ 65.32 $ 75.00 $ 75.00 $ 75.00
Braver Players Library Tenant $ - $ - $ - $ - x x
California Genealogical Societ Library Tenant $ 609.68 $ 700.00 $ 700.00 $ 700.00 x x
One Fine Blend Library Tenant $ 740.32 $ 850.00 $ 850.00 $ 850.00 x x
Kathy May's Restaurant Central Park Concession $ 1,633.06 $ 1,875.00 $ 1,875.00 $ 1,875.00 x x
Disc Sports Management Central Park Concession $ 870.97 $ 1,000.00 $ 1,000.00 $ 1,000.00 x x
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ATTACHMENT NO.1
Concessionaire Tenants on City-Owned Property
March Base May-July Base September •
BasedTenant Name Type Rent' April Base Rent Rent Base Rent Business Non-Profit Beach
Park Bench Cafe Central Park Concession $ - $ - $ - $ - x x
HCP Equestrian Center Central Park Concession $ 435.48 $ 500.00 $ 500.00 $ 500.00 x
Primo Nosh Central Park Concession $ 1,088.71 $ 1,250.00 $ 1,250.00 $ 1,250.00 x x
Denny's Parking Lot $ 412.29 $ 473.37 $ 473.37 $ 473.37
Huntington Shorecliffs Parking Lot $ 870.97 $ 1,000.00 $ 1,000.00 $ 1,000.00
Surf City Nissan Parking Lot $ 2,612.90 $ 3,000.00 $ 3,000.00 $ 3,000.00 x
Monroe Pacific Nursery Open Space Tenant $ 1,741.94 $ 2,000.00 $ 2,000.00 $ 2,000.00 x x
Meadowlark G.C.-Arcis/Eagle Open Space Tenant $ 38,596.06 $ 44,314.00 $ 44,314.00 $ 44,314.00
Visit HB-Surf Museum Museum $ 435.48 $ 500.00 $ 500.00 $ 500.00 x x
Oak View Rec Center Community Center $ 0.87 $ 1.00 $ 1.00 $ 1.00 x x x
Vans Skate Park Skate Park $ 0.87 $ 1.00 $ 1.00 $ 1.00 x
Total Monthly Rent $ 101,725.16 $ 117,595.55 $ 120,944.03 $ 120,108.01
$ 53,351.52 $ 53,351.52 $ 53,351.52 $ 53,351.52
$ 155,076.68 $ 170,947.07 $ 174,295.55 $ 173,459.53
Notes
1. March Base Rent is based on 27-day period(Governor Newsome's Proclamation of State of Emergency effective on March 4,2020).
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