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HomeMy WebLinkAbout11 - Agreement for Preliminary Design and Lease Negotiations for a New Restaurant at the End of the Newport Pier 11-1 NEWPORT BEACH City Council Staff Report COUNCIL STAFF REPORT CITY OF March 8, 2016 Agenda Item No. 11 ABSTRACT: The City of Newport Beach issued a request for proposals for a tenant to construct and occupy a restaurant space at the end of the Newport Pier in March 2014. After a thorough review of the proposals, staff is recommending approval of an exclusive negotiating agreement (ENA) with James Ulcickas and Richard Staunton, owners and co-founders of Bluewater Grill (Bluewater), to allow the City and Bluewater to work together to develop a conceptual building design and to negotiate the terms of a lease agreement for a new restaurant at the end of the Newport Pier. RECOMMENDATION: a) Find the execution of the Exclusive Negotiating Agreement is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines; and b) Approve and authorize the Mayor and City Clerk to execute a one-year exclusive negotiating agreement with James Ulcickas and Richard Staunton, in substantially the same form as the attachment to the staff report. FUNDING REQUIREMENTS: The current adopted budget includes sufficient funding for this project. It will be expensed to the Newport Pier Capital Improvement Project account in the Public Works Department. The estimated cost for conceptual design is $18,000 to be shared 50% with Bluewater Grill. TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Kimberly Brandt, Community Development Director - 949-644-3232, kbrandt@newportbeachca.gov PREPARED BY: Lauren Whitlinger, Real Property Administrator Seimone Jurjis, Assistant Community Development Director, CBO PHONE: 949-644-3236 TITLE: Approve an Exclusive Negotiating Agreement between the City of Newport Beach and James Ulcickas and Richard Staunton of Bluewater Grill Restaurant, for Preliminary Design and Lease Negotiations for a New Restaurant at the End of the Newport Pier Approve an Exclusive Negotiating Agreement between the City of Newport Beach and James Ulcickas and Richard Staunton of Bluewater Grill Restaurant, for Preliminary Design and Lease Negotiations for a New Restaurant at the End of the Newport Pier March 8, 2016 Page 2 11-2 DISCUSSION: Restaurant Space The Newport Pier, located on the Balboa Peninsula at 21st Street and West Ocean Front, is adjacent to the historic McFadden Wharf (Attachment B). The City-owned restaurant building at the end of the pier has been vacant since the previous lease expired in November 2012, in anticipation of a major renovation or redevelopment of the property. The existing two-story building was constructed in the 1940s, and it was expanded and renovated in the late 1980s. After evaluating the existing structure and the underlying pier, it was determined the building is beyond its useful life and its removal and replacement is the best economic option. Additionally the restaurant demolition will allow for renovation of the pier directly beneath the building. Selection Process In March 2014, the City published Request for Proposals No. 14-35 (RFP) for a restaurant tenant to remodel or replace the building and operate a restaurant at the end of Newport Pier. The City received nine proposals, but ultimately decided to revise the conditions of the RFP to require the tenant to cover the cost of replacing the building. Three proposals were received in response to the revised RFP requirements, including Cube Restaurant, Bluewater, and Machani Group/Big Fish Tavern. City representatives interviewed Machani Group/Big Fish Tavern and Bluewater in December 2015; Cube Restaurant had declined to continue in the selection process. After careful review and consideration between the two proposers, staff believes the proposal from Bluewater, will best meet the City’s objectives of creating a viable restaurant on Newport Pier which complements the pier itself, McFadden Square area, and will serve residents and visitors alike. However, there are still a number of unanswered questions, such as: What will the new restaurant building look like? How will it structurally affect Newport Pier? What is the true cost of the project? How much money are the proposers requesting the City to contribute? How will the new building affect the public’s use of the pier? Instead of asking the City Council to commit to a large project at this time, staff believes that it would be better use of resources to take a small step forward by developing a conceptual building design in conjunction with Bluewater that addresses these outstanding questions. Therefore, staff recommends that City Council enter into an ENA with Bluewater and share equally in the conceptual restaurant design costs. It is important to note that at this early project stage City Council is only committing to the development of a conceptual design and to negotiate a lease agreement. Approve an Exclusive Negotiating Agreement between the City of Newport Beach and James Ulcickas and Richard Staunton of Bluewater Grill Restaurant, for Preliminary Design and Lease Negotiations for a New Restaurant at the End of the Newport Pier March 8, 2016 Page 3 11-3 Approving the ENA does not obligate the City Council to approve the project or a lease at a future date. Once a design is completed, lease terms established, and specific costs determined, staff will return to the City Council with that information and to seek further direction. Proposed ENA Agreement Staff has prepared an ENA (Attachment A) to outline a timeframe and conditions under which the City and Bluewater can develop a building and site design and scope of work, in order to negotiate the project’s lease agreement terms. The proposed terms of the ENA are: 1. The length of the agreement will be for one year, with up to one three-month extension option, unless terminated as provided by the agreement. 2. The following non-exclusive list of items shall be researched and developed, in order to negotiate the deal points of a lease agreement: a) Scope of development and improvements for a restaurant; b) Assessment of the physical and environmental conditions; c) Site plan depicting proposed building locations, design, size, and uses, pier improvements, and required engineering for the pier; d) Pro forma for the project; e) Financing plan for the project; f) City’s financial contribution to the project; g) Scope of entitlements required for the project; h) Schedule for the project; and i) Discussion of lease terms and rents for the project. 3. City and Bluewater to share equally (50% each) the cost of preparation of design development documents. This agreement has been reviewed by the City Attorney’s office and has been approved as to form. Approve an Exclusive Negotiating Agreement between the City of Newport Beach and James Ulcickas and Richard Staunton of Bluewater Grill Restaurant, for Preliminary Design and Lease Negotiations for a New Restaurant at the End of the Newport Pier March 8, 2016 Page 4 11-4 Proposal for Architectural Services for a Conceptual Restaurant Design Staff and Bluewater reached out to Kelly Architects for a design proposal due to the firm’s relevant and recent experience with a similar project. Kelly Architects’ conceptual design proposal includes 3-D renderings for a total cost of $18,000 (Attachment C). If the City Council agrees to enter into the proposed ENA, then staff will prepare a professional services agreement with Kelly Architects. Contract Summary Proposed Contract Vendor Name James Ulcickas and Richard Staunton, individuals (Bluewater) Term 1 year, three month option Escalation Clause N/A Revenue/Year N/A Cost/Year $18,000 ($9,000 City/$9,000 Bluewater) Cost/Contract Term (est) $18,000 ($9,000 City/$9,000 Bluewater) Selection Process Sole Source or RFP/RFQ RFP Method (QBS vs. Low Bid)QBS # of Respondents 10 # of Qualified Respondents 2 ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A – Exclusive Negotiating Agreement Attachment B – Maps Attachment C – Design Proposal – Kelly Architects Attachment A Exclusive Negotiating Agreement 11-5 EXCLUSIVE NEGOTIATING AGREEMENT This EXCLUSIVE NEGOTIATING AGREEMENT ("Agreement") is made and entered into to be effective as of , 2016 ("Effective Date"), by and between the City of Newport Beach, a California charter city and municipal corporation ("City"), and James Ulcickas, an individual, and Richard Staunton, an individual (together hereinafter "Bluewater"). City and Bluewater are sometimes hereinafter individually referred to as a "Party" and collectively as the "Parties." RECITALS; The following Recitals are a substantive part of this Agreement: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of the City. B. City desires to lease to Bluewater certain real property in need of design, redevelopment, and improvements, which property consists of approximately 4,055 square feet located at 1 Newport Pier in Newport Beach, California 92663, and is depicted on Exhibit "A" attached hereto and incorporated herein ("Site"). C. Bluewater is an experienced restaurant group who has proposed a retail restaurant on the Site ("Proposal"). The Proposal, which may be subject to refinement and modification as mutually agreed to by the Parties during negotiations, is generally described in the Proposal Description attached hereto and incorporated herein as Exhibit "B." D. The Parties desire to enter into this Agreement to establish a period during which they will eooperate to explore the feasibility of developing the Proposal on the Site and during which time Bluewater shall have the exclusive right to negotiate with City with respect to the terms of an agreement or agreements to provide for the Proposal (herein, "Definitive Agreement"). COVENANTS: Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both Parties, City and Bluewater agree as follows: 1. Good Faith Negotiations. During the entire Negotiation Period (defined in Section 2), City and Bluewater shall negotiate in good faith pursuant to the terms set forth herein to achieve the objectives and accomplish the tasks described in this Agreement. Nothing herein shall be deemed a covenant, promise, or commitment by either Party to approve or enter into a Definitive Agreement with the other Party on any particular terms or conditions. The Parties' approval and execution of this Agreement is merely an agreement with respect to certain tasks preliminary to the execution of the Definitive Agreement and an agreement to enter into a period 11-6 of negotiations according to the concepts presented herein, reserving full and final discretion with City and Bluewater as to the final terms of the Definitive Agreement as required by law. If for any reason City and Bluewater have not each executed a mutually acceptable Definitive Agreement by the expiration of the Negotiation Period, and provided that the Parties have not committed a material default hereunder, this Agreement shall automatically terminate and shall be of no further force or effect. During the period of exclusive negotiation, the City covenants and agrees to negotiate exclusively with the Bluewater and shall not solicit another party for the Property or enter into any agreement with any other party regarding the development of the Property. The City acknowledges and agrees that but for this exclusivity, the Bluewater would not have entered into this Agreement. 2. Term of Agreement. The term of this Agreement (the "Negotiation Period") shall be one (1) year after the Effective Date; provided, however, that the City Manager, on behalf of the City, and Bluewater shall have the ri^t to approve an extension of the Negotiation Period for a cumulative maximum of three (3) months without the requirement of any official action by the City Council or an amendment of this Agreement, if the City Manager and Bluewater determine, in their sole and absolute discretion, that satisfactory progress is being made to achieve the objectives and complete the tasks set forth herein but such extension is necessary to finalize discussions or negotiations on mutually satisfactory terms. 3. Certain Parameters for Negotiation. The following nonexclusive list of items related to the Proposal shall be the subject of negotiations during the Negotiation Period: (a) Scope of development and improvements for a restaurant not to exceed 4,500 square feet, with outdoor dining; (b) Assessment of the physical and environmental condition of the site; (c) Site plan for the Proposal (depicting proposed building locations, building design, elevations, building square footages and uses, pier improvements, and additional design engineering requirements for the pier); (d) Pro forma for the Proposal (addressing detailed development and operational costs, anticipated rents, estimated profit and appropriate return measurements); (e) Financing plan for the Proposal (addressing the proposed methods of construction financing and permanent financing, and amounts and sources of equity and debt capital); (f) City's financial contribution to the Proposal; (g) Scope of the entitlements required for the project (including, but not limited to. City of Newport Beach, California Environmental Quality Act, California Alcohol Beverage Control, and California Coastal Commission); Bluewater Grill Exclusive Negotiating Agreement Page 2 11-7 (h) Development schedule for the Proposal; and (i) The fair market rents which Bluewater will pay for a leasehold interest in the Property and terms and conditions of the conveyance of the leasehold interest to Bluewater. 4. Preparation of Design Development Documents for Citv and Bluewater Review and romment. City shall act as the Project Manager in developing the Proposal on the Site. City shall enter into an agreement for architectural design services to develop the preliminary design of the Proposal, with input from Bluewater ("Architectural Services"). Bluewater shall be responsible for fifty percent (50%) of the costs of the Architectural Services by depositing these funds into a deposit account for the benefit of City. City shall be responsible for scheduling design meetings with its City Council subcommittee, architect, and Bluewater to refine design drawings. Bluewater acknowledges and agrees that design and architectural review by the City and its consultants will be required at each stage of the development of the Proposal and that sketches, plans, and ultimately working drawings, specifications and similar documents will be required to be submitted for review and approval pursuant to the Definitive Agreement ("City's Design Review"). Bluewater further acknowledges and agrees that the City, acting not as a Party but under its general police powers as a charter city and municipal corporation, may conduct all applicable review and that building design and pier improvement, including, but not limited to, the selection of building and pier elevations and construction materials, which shall not be final until approved by the City. Bluewater further acknowledges and agrees that the City's Design Review shall be rights exercisable by the City distinct and separate from those additional rights which the City may exercise under its general police powers as a municipal corporation and charter city. 5. Land Use & Environmental Requirements. The development of the Proposal shall be subject to all rules, regulations, standards, and criteria required by law and as set forth in the City's General Plan, Coastal Land Use Plan, zoning regulations, this Agreement, and the Definitive Agreement. Bluewater shall be responsible for costs related to the Proposal incurred after the Effective Date, including, but not limited to, fifty percent (50%) of consultant fees and Architectural Services ("Costs"). Bluewater shall place funds on deposit with the City to pay for the Costs pursuant to the City's architectural contract, as may be amended. 6. Phvsical Condition of the Site. City and Bluewater shall cooperate and exchange such information as may be available to either of them regarding the physical condition of the Site (or applicable portions thereof). 7. Hazardous Material Assessment. Within ten (10) days of the Effective Date, the City shall provide the Bluewater without charge, copies of reports, studies, surveys and other data and information on the physical condition of the Site. The Definitive Agreement may address applicable clean-up issues, if any. In the event an environmental audit evidences a need for clean-up of any portion of the Site, the City, by this Agreement, does not agree in any respect to undertake or complete such clean-up. In the event that during the Negotiating Period the Bluewater conducts or causes to be conducted any environmental audits and/or testing on any portion of the Site, the Bluewater shall submit copies of any reports resulting from such tests or Bluewater Grill Exclusive Negotiating Agreement Page 3 11-8 studies to the City. Such environmental audits and/or testing shall be conducted at the sole cost and expense of the Bluewater. Neither Party makes any representation or warranty as to the accuracy or completeness of reports prepared by third parties and delivered to the other Party. Bluewater shall indemnify, defend and hold harmless City from and against all claims, liabilities or damages, and including expert witness fees and reasonable attorneys' fees and costs, arising out of any such testing, inspection or investigatory activity on the Property by Bluewater. In addition, following any such testing, inspection or investigatory activity, Bluewater shall retum, and repair if necessary, the Property to the condition it was in prior to the Bluewater's investigatory activities. 8. Miscellaneous. 8.1 Notices. Any notices, requests or approvals given under this Agreement from one Party to another may be personally delivered, transmitted by facsimile (FAX) transmission, or deposit with the United States Postal Service for mailing, postage prepaid, to the address of the other Party as stated in this paragraph, and shall be deemed to have been given at the time of personal delivery or FAX transmission or, if mailed, on the third day following the date of deposit in the course of transmission with the United States Postal Service. Notices shall be sent as follows: notices between the Parties shall be delivered in writing to the following addresses: To City: Dave Kiff City Manager 100 Civic Center Drive Newport Beach, CA 92660 With a copy to: Lauren Wooding Whitlinger Real Property Administrator 100 Civic Center Drive Newport Beach, CA 92660 To Bluewater: Bluewater Grill Attn: Richard L. Staunton 665 North Harbor Drive Redondo Beach, CA 90277 8.2 Termination. Each Party reserves the right to terminate this Agreement, with or without cause, upon thirty (30) days prior written notice to the other Party, thereby withdrawing from such negotiations without any liability to the other Party, except that (i) each Party shall be obligated to promptly retum to the other Party all information and materials which such Party has received from the other Party pursuant to this Agreement and (ii) the rights and obligations of the Parties set forth in Section 8 shall remain in full force and effect. Any balance remaining in the Deposit Account shall be refunded to Bluewater. The Parties, by their respective execution hereof, knowingly agree, notwithstanding anything herein to the contrary, that, except with respect to the rights and obligations set forth in Section 8 hereof, neither of them shall have any right to specific performance of this Agreement, nor any other equitable or damage remedies Bluewater Grill Exclusive Negotiating Agreement Page 4 11-9 under the law. Each Party makes such release with full knowledge of Civil Code Section 1542 and hereby waive any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." City's Initials Bluewater's Initials 8.3 Bluewater Documents. In the event of termination of this Agreement, for any reason including, but not limited to, expiration, termination or breach of this Agreement, Bluewater shall deliver to the City, within ten (10) business days, a copy of all surveys, soils/environmental reports, site plans, pro formas, and other documents prepared by Bluewater or third parties that are associated in any way with this Agreement. Notwithstanding the foregoing, in no event, however, shall Bluewater be obligated to make available (or cause to be made available) any proprietary or confidential documents including reports or studies that have been superseded by subsequent reports or studies, or any of the following confidential and proprietary materials: (1) information contained in financial analyses or projections (including Bluewater's budgets, and capital account information); (2) material that is subject to attorney- client privilege or that is attomey work product; (4) organizational, financial and other documents relating to Bluewater or its affiliates (other than evidence of due authorization and organization, and the financing plan required under this Agreement); or (5) material that Bluewater is legally required not to disclose other than by reason of legal requirements voluntarily assumed by Bluewater after the Effective Date. Bluewater makes no representation or warranty as to the accuracy or completeness of reports prepared by third parties and delivered to the City. 8.4 Cooperation. The Parties agree to cooperate with each other in promptly supplying information and analyses relating to the Proposal. 8.5 Assignment. Neither Party shall have the right to assign any of their rights or obligations set forth in this Agreement without the written consent of the other Party, which consent may be withheld in such other Party's sole and absolute discretion. Any assignment must be in writing and executed by both assignor and assignee in order to be enforceable and after the effective date of the assignment the assignor shall be released and discharged from any liability or responsibility hereunder. 8.6 Entire Agreement. Amendments, and Waivers. This Agreement sets forth the entire agreement between the Parties with respect to the subject matter set forth herein and supersedes all prior discussions and negotiations between the Parties with respect thereto. No amendment to this Agreement shall be effective unless set forth in a writing signed by an authorized signator of each Party. No waiver of any provision of this Agreement shall be enforceable against a Party unless it is set forth in a writing executed by such Party. Bluewater Grill Exclusive Negotiating Agreement Page 5 11-10 8.7 Administrative Costs and Expenses: Bluewater Deposit. Bluewater shall be responsible for fifty percent (50%) of all costs and expenses incurred by the City related to this Agreement including, but not limited to, architectural and consultant fees. Prior to City's execution of this Agreement, Bluewater shall deposit with City an initial sum that is equal to fifty percent (50%) of the cost of the contract for Architectural Services ("Deposit Amount") that the City shall use to reimburse itself for the costs related to the implementation of this Agreement. Said funds shall be maintained in a separate account by the City ("Deposit Account"). Within ten (10) business days of a request by the City, Bluewater shall deposit additional sums to replenish the Deposit Account so that the amount of funds on deposit with the City is maintained at fifty percent (50%) of the cost of the contract for Architectural Services, as may be amended to reflect increased costs, with consent by Bluewater. Consent may be given via email or written correspondence, and shall not be unreasonably withheld. From and after the Effective Date, the Deposit Account may be used by the City to pay the City's costs including, without limitation, consultant fees required in connection with the drafting, negotiation and execution of this Agreement, the Definitive Agreement, or termination of this Agreement ("City Transaction Expenses") provided that City agrees that City Transaction Expenses to be charged Bluewater shall not exceed fifty percent (50%) of the agreed upon costs prior to execution of the Definitive Agreement. 8.8 Assurances to Act in Good Faith. The City and Bluewater each agree to take all actions contemplated by this Agreement, including timely depositing funds as required herein, and shall use their respective best efforts to negotiate a Definitive Agreement in accordance with the provisions of this Agreement. In the event that one Party fails to exercise good faith in the negotiations contemplated by this Agreement, the other Party may be entitled to recover those costs identified as Costs in Section 5 and the Deposit Amount defined in Section 8.7 from the Party that failed to exercise good faith. 8.8 Attomev's Fees. In the event of any litigation between the Parties arising out of or concerning this Agreement, the prevailing Party shall not be entitled to recover from the other Party its actual and reasonable attomey's fees. 8.9 Interpretation. This Agreement shall be interpreted as a whole and in accordance with its fair meaning and as if each Party participated equally in its drafting. Captions are for reference only and are not to be used in construing meaning. 8.10 Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of Orange County, State of California, in an appropriate court in that county, or in the Federal District Court in the Central District of Califomia. 8.11 Purpose of Agreement. It is expressly understood and agreed by the parties that this is an Agreement regarding the conduct of exclusive good faith contract negotiations only and does not convey any interest in the Site whatsoever. This Agreement is not intended to constitute a binding agreement by the City to lease the Property or commit the City to develop all or any portion of Site, to financially participate with the Bluewater in the development of the Proposal, nor is it intended to constitute a binding agreement to enter into a Definitive Agreement or any other contract. No Party shall be legally bound to consummate Bluewater Grill Exclusive Negotiating Agreement Page 6 11-11 construction of the Proposal unless and until a Definitive Agreement or other contract has been executed and delivered by the Parties. Notwithstanding any other provision hereof, neither the Bluewater nor the City shall be under any obligation to approve or execute any Definitive Agreement during or upon conclusion of the Negotiating Period. Any Party may refuse to approve and execute any Definitive Agreement at its sole and absolute discretion, with or without cause. In the event that a Definitive Agreement is approved and executed by the Parties, this Agreement shall be superseded by such Definitive Agreement. It is expressly understood that notwithstanding this Agreement, the Proposal may be modified or not implemented at all depending on a number of factors including but not limited to compliance with the California Environmental Quality Act. Agreement. 8.12 Reserved. 8.13 Time of Essence. Time is of the essence of each provision set forth in this [SIGNATURES ON FOLLOWING PAGE] Bluewater Grill Exclusive Negotiating Agreement Page 7 11-12 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement to be effective as of the date first set forth hereinabove. APPROVED AS TO FORM: Date: Aaron C. Harp City Attorney CAM c;j.(0Sr|lt# CITY OF NEWPORT BEACH, a California municipal corporation and charter city Date: By: Diane B. Dixon Mayor ATTEST: Date: BLUEWATER: James Ulcickas, an individual, and Richard Staunton, an individual Date: Leilani I. Brown City Clerk By: Name: James Ulcickas Title: Date: By: Name: Richard Staunton Title: Bluewater Grill Exclusive Negotiating Agreement Page 8 11-13 11-14 EXHIBIT A DESCRIPTION OF THE SITE Bluewater Grill Exclusive Negotiating Agreement Page A-1 11-15 Exhibit A J ■4^-,^^ \ _«. * (o .■'{ V" •W fV ^ T 'rn :\ Crt 5 V ^ 3 r ' .' ^i:k I . .■ ^■' , V % #/l Newport Beach GIS Disclaimer; Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of Newport Beach and its employees and agents disclaim any and all responsibility from or relating to any results obtained in its use. Imagery: 2009-2013 photos provided by Eagle Imaging www.eagleaerial.com 2/8/2016 11-16 Exhibit A - 2 M Newport Beach "'i'FOR'' Disclaimer: Every reasonabie effort has been made to assure the accuracy of the data provided, however, The City of Newport Beach and its employees and agents disclaim any and all responsibility from or relating to any results obtained in its use. Imagery: 2009-2013 photos provided by Eagle Imaging www.eagleaerial.com 2/8/2016 11-17 EXHIBIT B PROPOSAL DESCRIPTION Bluewater Grill Exclusive Negotiating Agreement Page B-1 11-18 Voit Real People. Real Solutions.'' 2020 Main St., Ste. 100 Irvine, CA 92614 PH (949) 851-5100 FX (949)261-9092 Lie. #01333376 voitco.com REAL ESTATE SERVICES July 13, 2015 Lauren Wooding Real Property Administrator City of Newport Beach 1 Civic Center Drive Newport Beach, California 92660 Re: Proposal - BlueWater Grill 1 Newport Pier Newport Beach, CA 92663 Dear Lauren: Thank you for this opportunity to work with the City of Newport Beach ("Landlord") to accommodate their future vision for a once again thriving restaurant on the Newport Pier. BlueWater Grill ("Tenant") looks forward to working with the Landlord to deliver an exceptional restaurant environment for the City's residents and visitors. We are very worried about the fisherman on the pier and for the below proposal to be of interest, we need a plan of action to address fisherman issues and the possibility of creating a new fishing platform. Voit Real Estate Services on behalf of Tenant is pleased to submit the following letter of intent to Landlord. 1. BUILDING/PROJECT: 1 Newport Pier Newport Beach, California 92663 2. TENANT I GROUND LESSEE: BlueWater Grill 3. PREMISES: An approximate 4,055 square foot retail restaurant. The exact square footage shall be subject to a mutually approved space plan. Bluewater may want to expand footprint. 4. 40 YEAR GROUND LEASE: The initial term of the Ground Lease ("Term") shall commence upon substantial completion of Tenant's FF&E. The footprint square footage may be subject to an increase with Costal Commission approval. Newport Beach (Corporate Office) | Anaheim Metro | Inland Empire | Irvine | Las Vegas | Los Angeles | Phoenix | Sacramento | San Diego 11-19 voitco.com Lauren Wooding July 13, 2014 Page 2 of 4 Ground lease adjustment dates: Years 1-6 the annual ground rent shall be $17,500 = assuming a vaiue of $150.00/PSF building foot print (1,667/sf X $150. = $250,050.00 x 7% = $17,500) Years 7-40 the annual ground rent shall be the greater of $17,500 or 4% of gross annual sales. Tenant will be responsible for their utiiities to be further defined in the lease. 5. PAD DELIVERY REQUIREMENTS: 1. Utilities stubbed to restaurant pad at a location mutually agreeable to Landlord and Tenant; a. Electric: 1200 amp, 120/208 3-phase service with main disconnect. If 277/408v, then a step down transformer on a pad to be provided by Landlord. b. Gas: 3,000,000 BTU at the demised premises, or 2" medium pressure gas iine. c. Sewer: 6" sanitary and a grease trap (4500 gailons) with a 4" grease iine to the demised premises. d. Water: 2" domestic, 6" fire water riser, DC and back flow device for fire sprinkier water supply. e. Phone: 4" empty conduit to phone pedestal or MPOE. f. Cable: 2" empty conduit to POC. 2. Level light weight concrete slab, over raised floor, with water barrier facing underside of pier. 3. Aii exterior access improvements in fuli compliance with ADA for restaurant use including handicap parking. 4. Compiete set of pad building pians and a complete site plan with parking counts. 5. Designated service yard, trash corral and delivery area. Trash corrai large enough for two 6 yd. dumpsters, one dumpster is required to be recyciable. 6. Fire Hydrants, as required by locai Fire Authority 7. Disclosure of any code limitations on signage, exterior iighting, exterior gas lamps or awnings. Signage at building and at pier landing visibie from public parking area 8. Renovations to outdoor seating deck per approved plans and specifications including lighting, iandscaping, railings and access control as required. 9. Ail necessary structural improvements (if needed) to accommodate the new building. 2. WARM SHELL: Construction estimates for the deiivery of the warm sheil building are $1,000,000 with vaiue engineering. BiueWater wiil agree cover up to a maximum of $500,000.00. This will require an outside investor group. The required investor terms wili be approximately @ 8% interest amortized over 72 months ($8,766.00/ mo). 1. All Exterior walls with all exterior finishes and R-19 interior insulation. 11-20 voitco.com Lauren Wooding July 13. 2014 Page 3 of 4 2. Roof: completed roof system with R-30insulation under roof deck. 3. HVAC: Package unit-roof mounted with 1 ton per 250 sq. ft. Central plant-4 pipe supply/return with mutually agreed flow, temp and pressure requirements. Distributed throughout restaurant per plans. 4. Interior plumbing. 5. Storefront, including doors and windows. 6. Location for roof mounted satellite dish. 7. Adequate space for roof top exhaust/MUA, refrigeration and HVAC units. 8. Fire rated shaft for kitchen exhaust ducting. 9. Kitchen fire suppression system (as required by Plans & Specifications) 10. Building design costs shall be responsibility of Landlord. 11. Restrooms. 12. Other costs as reasonably agreed by parties prior to lease and after tenant has had the opportunity to evaluate in more depth with its consultants and vendors. 13. Landlord to pay all construction permittees. Other costs as reasonably agreed by parties prior to lease and after tenant has had the opportunity to evaluate in more depth with its consultants and vendors Tenant shall be responsible for managing the construction and tenant improvements for the building. Please see attached detailed construction estimate. SECURITY/ACCESS: Tenant may install its own security system for the Premises. Tenant shall have 24/7 access to the Building, except in the case of an emergency. 4. SIGNAGEI COMPETITORS: Tenant shall be allowed exclusive building signage and any additional locations that the Landlord and Tenant deem beneficial. All costs associated with said signage including, but not limited to, design, fabrication, installation, maintenance and removal shall be borne by Tenant. All signage will comply with the City of Newport Beach's sign criteria. 5. ASSIGNMENT / SUBLETTING RIGHTS: Tenant shall have the right to assign or sublet any portion or all of the premises, subject to Landlord's approval, which shall not to be unreasonably withheld. 6. EXTERIOR OUTDOOR PIER SPACE: Please address Tenant's ability, if any to host events on the pier deck with food and beverage service. 7. RELOCATION: The lease shall not provide a right to relocate Tenant. 8. FIRST MONTH'S RENT I SECURITY DEPOSIT: 11-21 voitco.com Lauren Wooding July 13, 2014 Page 4 of 4 At lease execution by Tenant, Tenant shall pay the first month's base rent as well as a security deposit equal to 110% of last month's base rent. 9. BROKER: Tenant recognizes Carter Harrington and Doug Killian of Voit Real Estate Services ("Brokers") as its exclusive real estate agent with respect to negotiations for this transaction. Any commission due and earned will be paid by Landlord in accordance with a separate standard commission agreement. 10. CONFIDENTIAL: Tenant and Landlord acknowledge that the terms and conditions contained herein and details of the ensuing negotiations will remain confidential between the parties to the lease and no proposals, lease drafts, leases or summaries of any kind will be distributed, copied or otherwise transmitted, orally or in writing, to any other entity or person. This Letter of Intent is an outline only of certain key terms of the proposed Lease. This Letter of Intent is not an offer to lease and Tenant and Landlord are not making any binding commitment by signing this Letter of Intent or by any prior discussion. This proposal shall expire Juiy 30th, 2015. Should you have any questions regarding this letter of intent, please do not hesitate to contact us at (949) 851-5100. We look forward to working with you on this requirement and continuing our long term business relationship with the City of Newport Beach. Sincerely, Carter Harrington Lie: 01763924 Senior Leasing Director Voit Real Estate Services Doug Killian Lie. 00887784 Senior Vice President Voit Real Estate Services 11-22 NE W P O R T BE A C H PI E R ww w . b l u e w a t G r g r i l l . c o m Concept pg 2 Menu pg 3 Food pg 4 11-23 "O O D ® NE W P O R T BE A C H PI E R Ri c h a r d St a u n t o n Ji m Ui c l c k a s Ro b e r t Hy m a n Ja s o n Ma z u r Ch r i s Ro c k De a n n a Sa r r o Da v i d Bi a k e y Je f f Ma r t i n e a u Sh a w n e n e Hi l l St e v e Ew i n g Co - f o u n d e r an d Pa r t n e r Co - f o u n d e r an d Pa r t n e r VP of Op e r a t i o n s an d Pa r t n e r Ex e c u t i v e Ch e f Ge n e r a l Ma n a g e r of Ne w p o r t Be a c h Ge n e r a l Ma n a g e r of Re d o n d o Be a c h Ge n e r a l Ma n a g e r of Tu s t i n Ma n a g i n g Pa r t n e r of Ph o e n i x Ge n e r a l Ma n a g e r of Av a i o n Ge n e r a l Ma n a g e r of Bo a t h o u s e se e Ex e c u t i v e Bi o s se c t i o n fo r mo r e de t a i i e d in f o r m a t i o n Co n c e p t Th e Ne w p o r t Be a c h Pi e r pr o p o s a l is mo d e l e d af t e r a cl a s s i c Ne w England Seaside Eatery. Th e "B l u e w a t e r Se a f o o d Sh a c k " wi l l be a ca s u a l ea t e r y th a t se r v e s contemporary casual fa r e wi t h a fo c u s on se a f o o d as we l l as mo r e ma i n s t r e a m me n u it e m s to satisfy all palates se r v i n g br e a k f a s t , lu n c h an d di n n e r , br e a k f a s t , bu r g e r s an d ki d s . Summer Shacks are ca s u a l , ro l l - u p - y o u r - s l e e v e s , fa m i l y re s t a u r a n t s fe a t u r i n g lo b s t e r , crab, salads, fried and gr i l l e d se a f o o d , as we l l as ho t do g s , bu r g e r s an d ot h e r fu n , de l i c i o u s foods. We wi l l fe a t u r e a fu l l ba r an d a ro t a t i n g as s o r t m e n t of cr a f t be e r s inciuding our own signa tu r e la b e l . Th e Hi g h Sp o t Be e r Co . , na m e d af t e r po p u l a r lo c a l fi s h i n g banks frequented by ou r lo c a l fi s h e r m e n , e. g . 14 Mi l e Pa l e Al e an d 28 9 Pi l s n e r . In ad d i t i o n to these draft beers, we wi l l ha v e a se l e c t i o n of bo t t l e d be e r , as we l l as a un i q u e co l l e c t i o n of wines and hand cr a f t e d co c k t a i l s . Th e in t e r i o r wi l l be an ec l e c t i c mi x of wo o d & st e e l ac c e n t s , ex p o s e d beam ceilings, with a se m i wa r e h o u s e in d u s t r i a l fe e l du e to th e la r g e wi n d o w s an d an ex p a n s i v e roof deck. The re s t a u r a n t wi i l ha v e a ba r / s e r v i c e co u n t e r th a t wi l l in t e r a c t wi t h the dining area. This will be c o m e an in t e g r a l pa r t of th e ov e r a l l ex p e r i e n c e . A ta k e - o u t - w i n d o w will provide for the pi e r pa t r o n s wh o pr e f e r to ea t ou t s i d e on th e pi e r . Concept 11-24 bo D ^ NE W P O R T BE A C H PI E R BR E A K F A S T / B R U N C H GR A I N S KA T E ' S GR A N O L A , BE R R Y & YO G U R T PA R F A I T Gr e e k yo g u r t la y e r e d wi t h Ka t e ' > ho m e m a d e gr a n o l a , mi x e d be r r y co m p o t e , an d sl i c e d ba n a n a s CA R M E L I Z E D BA N A N A S FR E N C H TO A S T WI T H NU T E L L A 10 . 9 5 Ca r a m e l i z e d Ha w a i i a n sw e e t br e a d st u f f e d wi t h Nu t e i l a , to p p e d wi t h sl i c e d ba n a n a s an d ha z e l n u t s , se r v e d wi t h pu r e ma p l e sy r u p BU T T E R M I L K PA N C A K E S 9. 9 5 Bu t t e r m i l k pa n c a k e s to p p e d wi t h wh i p p e d ma p l e bu t t e r an d se r v e d wi t h mi x e d be r r y co m p o t e an d pu r e ma p l e sy r u p NE W EN G L A N D TR A D I T I O N A L FI S H C A K E S 12 . 7 5 Cl a s s i c Ne w En g l a n d hs h ca k e s ma d e wi t h lo c a l fl a k y wh i t e fi s h , wh i c h is th e n br e a d e d an d pa n fr i e d fo r a de l i c a t e , cr i s p y cr u s t . SC R A M B L E D EG G S WI T H SM O K E D SA L M O N 12 . 7 5 Sc r a m b l e d eg g s an d sa u t e e d gr e e n on i o n s to p p e d wi t h sm o k e d sa l m o n an d ch i v e s , se r v e d wi t h br e a k f a s t po t a t o e s an d le m o n so u r cr e a m . Ch o i c e of so u r d o u g h to a s t , En g l i s h mu f f i n s or gr i l l e d ci a b a t t a HU E V O S RA N C H E R O S EG G S 12 . 0 0 Fr i e d . Po a c h e d , or Sc r a m b l e d + ch o i c e of Ba c o n , Ap p l e w o o d Br e a k f a s t Sa u s a g e FI S H E R M A N ' S BR E A K F A S T 14 . 9 5 Sa n d d a b . s wi t h le m o n ca p e r sa u c e , tw o fr i e d eg g s +g t i l l e d ci a b a t t a +b r e a k f a s t po t a t o e s ST E A K AN D EG G S 18 . 5 C 7o z . An g u s Ne w Yo r k st e a k , +t w a fr i e d eg g s + gr i l l e d ci a b a t t a + br e a k f a s t po t a t o e s CL A S S I C EG G S BE N E D I C T 12 . 7 5 Po a c h e d eg g s on to a s t e d En g l i s h mu f f i n s + Ca n a d i a n ba c o n + ho u s e ma d e Ho l l a n d a i s e sa u c e + br e a k f a s t po t a t o e s CR A B CA K E BE N E D i a 14 . 9 5 To a s t e d En g l i s h mu f f i n s to p p e d wi t h cr a b ca k e s + po a c h e d eg g s + ho u s e ma d e Ho l l a n d a i s e sa u c e + br e a k f a s t po t a t o e s PI E R OM L E T T E 12 . 9 5 Th r e e eg g s sa u s a g e + gr e e n on i o n + av o c a d o + to m a t o + mu s h r o o m s = ch o i c e of ch e e s e Ot V V x , . NE W P O R T BE A C H PI E R LU N C H / D I N N E R BI G KA H U N A NA C H O S 8. 9 5 Ad d sh r i m p oi ci i i C K e n (a d d 4. 9 5 } GR I L L E D SH R I M P QU E S A D I L L A 10 . 2 5 Se r v e d wi t h ho u s e ma d e pi c o de ga l l o JU M B O PR A W N CO C K T A I L 12 . 7 5 Ho u s e ma d e co c k t a i l sa u c e SH R I M P & CA L A M A R ! FR I T T I 10 . 9 5 S' . v e e i ct u l i sa u c e + Ca j u i i re m o u l a d e SO U P S & SA L A D S NE W EN G L A N D CL A M CH O W D E R Ci i u / B o w l 5. 2 5 / 6 . 7 5 GA R D E N SA U D 5. 9 5 F- o u r le t t u c e mi x + te a r dr o p to m a t o e s + he r b cr o u t o n -t ch o i c e of ho u s e ma d e dr e s s i n g SE A F O O D LO U I E SA L A D 16 . 5 0 Le t t u c e + to m a t o e s i cu c u m b e r eg g -a v o c a d o + Sa n l- r a n c i s c o Lo u i e dr e s s i n g . + re d ro c k Cr a b + ba y sh r i m p CH I C H E N CH O P P E D SA L A D 14 . 5 0 Ro m a i n e + pi n e a p p l e + av o c a d o -r ci l a n t r o + ji c a m a + ci t r u s vi n a i g r e t t e PLATES BE E R BA T T E R E D FISH & CHIPS 14.75 MA H I M A H I 16.25 SA L M O N 17.50 SW O R D F I S H 19.50 SH R I M P 16.75 IP S W I C H FR I E D CLAMS 25.00 Al l p i ' o r e s se r v e d with slaw *fries or chips SA N D W I C H E S SU R F E R ' S HO T DOG 5.95 lO O ' F n al l n. i t u n - i l with traditional wo r k s TU N A ME L T 9.75 Al b a c o r e tu n a salad + cheddar cheese on so u r d o u g h bread 15 2 PA L E BA T T E R E D OR GRILLED FISH SA N D W I C H 10.25 He r b re m o u l a d e + savoy cabbage i- malt vi n e g a i FI S H TA C O S 14.75 Re d ca b b a g e + cilantro + white sauce + ch i p s + sa l s a CH I C K E N / ST E A K TACOS 13.95 Re d ca b b a g e nianlro ■» white sauce -r ch i p s + sa l s a CR A B "B L T A " SANDWICH 15.75 Ba c o n - ar u g u l a - tomato + avocado + cr a b sa i a d on sourdough LO B S T E R RO L L 18.75 Ma i n e io D s i e i with brioche bun VE G G I E BU R G E R 9.25 Gr i l l e d bl a c k be a n patty + cheddar gu a c a m o l e + ch i p o t l e mayo on sesame se e d bu n CR I S P Y CH I C K E N SANDWICH 13.95 Ha v a r r i + sw e e t slaw + arugula + sesame br i o c h e bu n AN G U S CH E E S E B U R G E R 11.95 Tr a d i t i o n a l wo r k s , choice of cheese, add ba c o n fo r Si . 0 0 HI G H SP O T BU R G E R 16.50 Ko b e be e f + cr i s p y onions + heirloom to m a t o + bu t t e r lettuce + garlic aioli AU S S I E BE A C H BURGER 14.75 Tr a d i t i o n a l wo r k s + beet root slice, ♦■ c r o w n e d -r fr i e d egg Menu Pg3 11-25 M < if • ;■ - f "' W : • / High Quality Casual Fare Pg4 11-26 Attachment B Maps 11-27 Feet Imagery:2009-2013 photos provided by Eagle Imaging www.eagleaerial.com Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of Newport Beach and its employees and agents disclaim any and all responsibility from or relating to any results obtained in its use. Disclaimer: 2/17/2016 0 400200 Newport Beach GIS 11-28 Feet Imagery:2009-2013 photos provided by Eagle Imaging www.eagleaerial.com Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of Newport Beach and its employees and agents disclaim any and all responsibility from or relating to any results obtained in its use. Disclaimer: 2/17/2016 0 8040 Newport Beach GIS 11-29 Attachment C Design Proposal – Kelly Architects 11-30 2404 wilshire boulevard, suite 1e los angeles, california 90057-3310 t. 213.380.8498 f. 213.380.8499 www.kelly-architects.com Newport Beach Pier Restaurant Saturday, February 20, 2016 Lauren Wooding-Whitlinger, Real Property Administrator 100 Civic Center Drive Newport Beach, CA 92660 Project: BWG Restaurant on the Newport Pier RE: Proposal for Architectural Design Services 1603 Dear Lauren: We are pleased to submit this fee proposal for Architectural Design Services for the new Bluewater Grill Restaurant to be located on the Newport Beach Pier. It is my understanding that the City of Newport and Bluewater Grill are partnering to construct a 3,500-4,000 SF enclosed building with approximately 1,500 SF of exterior dining on end of the Newport pier. This proposal is based our meeting on February 2nd and subsequent communication. This letter of agreement will serve as the Contract between Kelly Architects and City of Newport Beach, herein referred to as the Client, for Architectural and Interior Design Services. This letter of agreement consists of the following four exhibits: • Exhibit A – Scope of Services, Phases & Exclusions • Exhibit B – Compensation • Exhibit C – Terms & Conditions • Exhibit D – Signature & Authorization Please sign and return one copy of this agreement for our records. We are prepared to start upon your signed approval of this proposal. Please feel free to contact me if you have any questions. Sincerely, George W. Kelly, AIA Principal Architect P:\Projects\2016 Projects\1603-BWG Newport Pier\Contract\1603-Newport Pier Restaurant Concept.doc 11-31 2404 wilshire boulevard, suite 1e los angeles, california 90057-3310 t. 213.380.8498 f. 213.380.8499 www.kelly-architects.com 2 of 4 EXHIBIT A SCOPE OF SERVICES, PHASES & EXCLUSIONS PHASE 1 – Concept Design 1. Kelly Architects will meet with the Clients, both the City of Newport and Bluewater Grill to develop the program, design concepts, pier limitations and Concept Design package. a. New 2 story restaurant & bar concept on the end of the pier b. Prominent entrance and open stair c. Enclosed kitchen d. New Restaurant dining seating area on main and second levels e. New men’s and women’s restrooms f. New patio seating area on main and second levels g. Loose dining seating with limited fixed seating h. Walk up window for to-go service i. New signage to be designed as part of Schematic design 2. Kelly Architects will prepare as-built drawings of the project site including the pier, (E) building structure, tenant lease area, overall pier perimeter. The basis for these drawings will be PDF’s provide by the Client and limited site measurements. 3. Kelly Architects will prepare an exterior building design with aesthetic options for review by the Client. The preferred option will be developed further to include preliminary material selection, window, roof shape, wall finishes, exterior lighting, railings signage, entrances, and other aspects of the design. 4. Kelly Architects will prepare a concept design of the exterior of the building. 5. Kelly Architects will prepare concept floor plans, cross sections, exterior elevations, hand-drawing sketches, 3D models, physical materials, pier imagery and other plans as necessary to develop the design. 6. The Architect will prepare a design presentation for the City Council that will include multiple 3D colored rendering images of the building from the shore and from all sides. The model will include preliminary materials and pier contextual elements. Preliminary Schedule Concept Design: 5 weeks from contract approval 11-32 2404 wilshire boulevard, suite 1e los angeles, california 90057-3310 t. 213.380.8498 f. 213.380.8499 www.kelly-architects.com 3 of 4 EXHIBIT B COMPENSATION Architectural Fees Kelly Architects proposes to provide the above listed professional services with not-to-exceed budgets as follows: Architect Lump Sum Fee Phase Arch Fee PHASE 1 - Concpet Design 18,000$ NOTE: Consultant fees will be authorized under a separate agreement after the Schematic Design phase when their specific scope of work can be defined. Reimbursed Expenses Kelly Architects shall be reimbursed by the Client for all expenses incurred as a result of providing these services. Reimbursable expenses shall include but are not limited by the following: full size CAD plots, blueprints, drawing reproduction, renderings, outgoing faxes, telephone calls, postage, messenger, and delivery services, parking fees and auto travel which shall be reimbursed at the current IRS rate (as of 1/1/13 56.5¢ per mile). Travel outside the state of California shall be approved and paid for in advance. The Client shall reimburse the Architect at 1.15 times the actual cost of materials and expenses as listed above and at 1.15 times the actual fee of consultants contracted by the Architect. 11-33 2404 wilshire boulevard, suite 1e los angeles, california 90057-3310 t. 213.380.8498 f. 213.380.8499 www.kelly-architects.com 4 of 4 EXHIBIT C TERMS AND CONDITIONS I. Additional Services Any services not provided above, some examples are as follows: i. Work requested by the Client that is outside the scope of services. ii. Changes to work which has been completed by Kelly Architects and approved by the Client in an earlier phase of the project. iii. ADA and Title 24 upgrades for existing elevators, building restrooms not associated with the restaurant, building main entrances and all other areas outside the restaurant unless specified in the Scope of Work iv. Applications for Modifications or Variances to existing building conditions. v. In the event of Client-directed project scope of work, complexity, quality or schedule changes that result in the phase budgets being exceeded, Kelly Architects will advise the Client and request additional fees in advance of proceeding beyond these budgets listed. vi. Additional Services will be provided on a case-by-case approval basis and the Architect shall be compensated on a lump sum or an hourly basis at the rates listed below. viii. In the event the project scope or schedule changes so that the budgets could be exceeded, the Architect will advise the Client and request additional fees in advance of proceeding beyond these budgets listed. Hourly Rates: Principal Architect $190.00 per hour Principal Interior Designer $175.00 per hour Project Architect $150.00 per hour Interior Designer $120.00 per hour Job Captain / CAD $110.00 per hour Sourcing / FF&E Assistance $100.00 per hour II. Billing a. Kelly Architects shall invoice the Client monthly for services performed and reimbursable expenses incurred during the previous month. b. Payment is due 30 days from invoice date. A late fee of 1.5% will be added to all outstanding balances after 30 days. P:\Projects\2016 Projects\1603-BWG Newport Pier\Contract\1603-Newport Pier Restaurant Concept revised.doc 11-34