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HomeMy WebLinkAboutC-1920 - Corona del Mar State Beach Concessionaire (see also C-1856)C35VIO 0 -aU`0) 0 -o -\ CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 11 March 28, 2006 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, Assistant City Manager 949 - 644 -3002 DKiff(d.)citv.newport- beach.ca.us Administrative Services Department Evelyn Tseng, Income Contract Administrator 949 - 644 -3153 Etseng(a.city, newport- beach.ca.us SUBJECT: Award of Concession at Corona del Mar State Beach 114-1914 CITY BEACH Who should be selected as the next food, beverage, and beach goods concessionaire at Corona del Mar State Beach? RECOMMENDATIONS: 1) Select Kilmer Enterprises, Inc, as the next concessionaire at CDM State Beach based on the proposal submitted by Kilmer in response to City's recent Request for Proposals for the CDM concessionaire. 2) Authorize the Mayor to execute a Concession Agreement based on the terms attached to this report. DISCUSSION: Background: From November 1991 through September 2005, Kilmer Enterprises managed the Corona del Mar State Beach concession. During that time, Kilmer Enterprises paid 45% of its monthly gross receipts for rent. In the last calendar year of its operation, 2004, Kilmer Enterprises paid $100,420.00 to the City. Award of CDM Concession March 28, 2006 Page 2 In September 2005, the concession agreement with Kilmer Enterprises was terminated in order to commence construction of the Corona del Mar Beachgoer Amenities Improvement Project (the "Project "). The Project includes 1043 square feet for a concessions facility, and is scheduled to open sometime in late spring, 2006. Council Policy F -7 requires the City to "seek revenue equivalent to the open market value of the highest and best use; and, whenever possible the City shall conduct an open bid or proposal process to insure the highest financial return" in negotiations regarding the lease of non - residential income property. Process. On October 27, 2005, the City issued a Request for Proposals for the concession operations at Corona del Mar State Beach. All the proposers are willing to negotiate on rent, rent credits, lease term and menu items. After reviewing the written proposals, we summarized the proposals then distributed summaries to each person that submitted a proposal (NOTE: the written proposals are available in the City Manager's Office should anyone want to see them). Then City staff (Dave Kiff, Lloyd Dalton, Evelyn Tseng, Glen Everroad, and Aaron Harp) met in person with each proposing firm to discuss their concepts. Following those meetings, some of the firms refined their rent and term information — the refined results are summarized in this staff report. Finally, we met with Council Member Nichols, in whose district CDM State Beach resides, to discuss the process with him and hear his opinions. Then we made our recommendation via this staff report. The Proposals. In reviewing the proposals below, it is important to note that while some candidates may provide higher rent offers than others, the concession experience of the other candidates should be taken into account because their reputation and creativity may generate more overall gross revenue. Below is a summary of the four proposals received. Please note that the rent hypotheticals assume $240,000 gross /year. 1 — Mike Ali — Mike Ali currently owns and operates Zack's Beach Concession in Huntington Beach. Mike comes with good recommendations from State Parks and others. TERM: Mike proposed a 10 -year lease term with rent credit for tenant improvements. RENT: $7,200 and 20% of gross sales per year. Therefore, $55,200/yr. MENU: Hamburgers, hot dogs, french fries, nacho /cheese strips, pizza, burritos, deli sandwiches (turkey, chicken, tuna, fish), falafel, salads — Greek, Caesar RENTALS: Boogie boards, bikes, chairs, umbrellas FOR SALE: Beach toys, cameras (disposable), sand toys, shirts, souvenirs, sunglasses. sunscreen, swim trunks, towels Award of CDM Concession March 28, 2006 Page 3 2 — Michael and Kathleen Flamson — The Flamsons currently operate the Crystal Cove Shake Shack and The Place Sports Bar and Grill. The Flamsons come with good recommendations from neighbors and clients. TERM: 10 year lease term with rent credit for tenant improvements. RENT: 1" Tier (under $240,000 gross) _ $5,000 base rent plus 15% of gross; 2nd Tier ($241,000 - $300,000 gross) _ $5,500 base plus 17% of gross; 3`d Tier ($301,000 and above) _ $6,000 base, 18% of gross. Therefore, $41,000 /yr. MENU: Cheeseburgers, hamburgers, chicken burgers, veggie burgers, turkey burgers, hot dogs, turkey dogs, patty melts, philly steaks, zucchini fries, french fires,onion rings, chicken strips, grilled cheese, burritos, tacos, taquitos, quesadilla, sandwiches (tuna, turkey, roast beef, vegetarian), salads (chefs, chicken chef's, chicken taco, Cobb, Caesar, dinner), shakes and smoothies (strawberry, vanilla, banana, peach, pineapple, coconut, peanut butter, chocolate oreo, raspberry, "monkey flip ") RENTALS: Boogie boards, chairs, umbrellas, volleyballs FOR SALE: Hats, smashball, sunscreen, sweatshirts, T- shirts, towels 3 — Kilmer Enterprises Inc. — Gordon and Doug Kilmer (Kilmer Enterprises, Inc) ran the previous concession at Corona del Mar, and is well- regarded in the Corona del Mar community. TERM: 5 -year lease term. Kilmer Enterprises will pay for tenant improvements RENT: $75,000 or 35% of total gross revenues, whichever is higher. Therefore, $84,000. MENU: Hamburger, cheeseburger, veggie burger, cheese sandwich, chicken sandwich, hot dog, corn dog, French fries, French fries w /chili, chili, burritos, tortilla strips, tortilla strips w /cheese, tortilla strips w /chili, churros. RENTALS: Boogie boards, chairs, umbrellas FOR SALE: Bait, batteries, board wax, cameras (disposable), film, firewood, flying saucers, utensils, hats, lighter fluid, matches, paper plates, sand buckets, spoons, sunglasses, sunscreen, towels. 4 — Gina Rhodes /Fernando Iniguez — Gina Rhodes currently operates the Newport Beach Little League Snack Bar located at the athletic fields at Lincoln Middle School. Ms. Rhodes, and her father, Mr. Iniguez, also own and operate the Mail Room in Corona del Mar. Ms. Rhodes comes with good recommendations from clients. TERM: 10 year lease term plus five year option. Rent credit for tenant improvements. RENT: $80,000 or 35% of the gross including rental equipment, whichever is higher. Therefore, $84,000. MENU: Cheeseburgers, hamburgers, kids burger, hot dogs, chili cheese dog, corn dog, chicken fingers, sandwiches (ham and cheese, chicken salad, tuna salad), salads (Chinese chicken, Cobb, chicken, Santa Fe), Smoothies. RENTALS: Badminton sets, blankets, boogie boards, chairs, fins, paddleboards, picnic baskets, playpens, sandpail sets,, skimboards, umbrellas, volleyballs FOR SALE: Firewood Selection /Recommendation. Staff was pleased with the quality of responses to the RFP. All of the four proposers had strong concepts and good ideas about the concession. We believed that each proposer brought individual strengths worthy of consideration. While pricing was important to us in making our recommendation, so was experience in beach concessions. We concluded that, while Ms. Rhodes and the Kilmer proposal included identical rent payments, the tenant improvement cost provided I Award of CDM Concession March 28, 2006 Page 4 by Kilmer and the good track record of Kilmer's work at CDM State Beach warrants Kilmer's selection. Again, we note how pleased we were with each of the proposers' concepts and presentations. We thank them for the time and effort that went into their proposals. Proposed Terms of Agreement. If the Council approves this item, it would also authorize the Mayor to enter into a contract based substantially on the following terms that would be addressed within a formal Concession Agreement: • TERM: A single term of 5 years, with two 5 -year options. • RENT: $80,000 /yr or 35% of gross sales, whichever is greater • TENANT IMPROVEMENTS: Concessionaire must pay the cost of tenant improvements — no rent credit offered. • INSURANCE: Concessionaire must provide insurance as required by the Request for Proposal, and as approved by the City's Risk Manager. HOURS OF OPERATION: To be determined based on discussions with selected vendor C ENVIRONMENTAL PROTECTION Concessionaire must install a grease interceptor, as required by the City of Newport Beach Municipal Code; use food packaging consistent with good environmental practices, including prohibiting Styrofoam from the premises, minimizing the use of PVC plastics, and providing both trash receptacles and places for customers to dispose of recyclable products. Prepared by: Submitted by: Evely Tseng, Inco Contract Administrator Dave Kiff, Assistant City Manager Attachments: Request for Proposals Draft of Concession Agreement Terms H In C l T `r' (�� 1 P i �_ `01� f•'t�i �' T 1 =, r_ ,�, C N REQUEST FOR PROPOSALS Concession Operations and Tenant Xrnprovernents at Corona del Mar State Beach Deadline for Proposals December 2, 2005 at 4:00 PM Informational Meeting Fire Conference Room City Hall 3300 Newport Blvd. Newport Beach, CA 92658 Wednesday, November 30, 2005 1:00 p.m. REQUEST FOR PROPOSALS ( "RFP ") Concession Operations and Tenant Improvements at Corona del Mar State Beach The City of Newport Beach ( "City ") is soliciting proposals in order to identify individuals and /or businesses qualified to operate and manage a renovated concession located at Corona del Mar State Beach ( "CDM State Beach ") (See Attachment 1). CDM State Beach is part of the California State Parks system, but it is managed and operated by the City. This RFP is designed for those interested in entering into a contractual relationship with the City ( "Concession Lease Agreement ") to lease the City- managed concession facility. The selected concessionaire shall be required to assist in the completion of the tenant improvements and operate the facility according to the terms of the City's Concession Lease Agreement. I. RFP TERMS AND COINDITIOINS A. This RFP does not commit the City to award a contract. No other party, including any applicant, is intended to be granted any rights hereunder. Proposals which, in the sole discretion of the City, do not meet the minimum requirements, including without limitation the minimum proposal submission requirements, will not be reviewed. This RFP and the process it describes are proprietary to the City and are for the sole and exclusive benefit of the City. Any response, including written documents and verbal communication by any applicant to this RFP, will become the property of the City and if required by law may be subject to public disclosure by the City or any authorized agent of the City. The City is not liable for any costs associated with the development, preparation, transmittal or presentation of any proposal or material(s) submitted in response to this RFP. B. It shall be the applicant's responsibility to review and verify the completeness of its proposal. The City may request additional or clarifying information or more detailed information from any applicant at any time, including information inadvertently omitted by a applicant. The City may request to inspect properties or contact clients referenced in the applicant's proposal. The City also reserves the right to conduct investigations with respect to the qualifications of an applicant. C. Verbal communication made by any City employee or agent of the City with respect to this RFP is not binding and shall not in 1 any way be considered as a commitment by the City. Only written responses to questions submitted in writing to the City or written addenda to this RFP issued by the City may be relied upon. D. City employees and officials are prohibited from responding to this RFP or being a party, direct or indirect, to any contract resulting from the RFP, and no proposal shall be accepted from, or contract awarded to, any City employee or official who submits a proposal or solicits any contract in which he or she may have any direct or indirect interest. No applicant may submit more than one proposal pursuant to this RFP. Entities that are legally related to each other or to a common entity may not submit separate proposals. Any proposal may be rejected because it, in the City's sole judgment, violates these conditions or the spirit of these conditions. E. The City reserves and may exercise the following rights and options with respect to evaluation of proposals and selection for negotiation: i. To reject any and all proposals and re -issue the RFP at any time prior to execution of a final contract if, in the City's sole discretion, it is in the City's best interest to do so; ii. To supplement, amend, substitute or otherwise modify this RFP at any time prior to selection of one or more respondents for negotiation and to cancel this RFP with or without issuing another RFP; iii. To accept or reject any or all of the items in any proposal and award the contract in whole or in part if it is deemed in the City's best interest to do so; iv. To reject the proposal of an applicant that, in the City's sole judgment, has been delinquent or unfaithful in the performance of any contract with the City or other government entity, is financially or technically incapable or is otherwise not a responsible applicant; V. To reject as informal or non - responsive any proposal which, in the City's sole judgment, is incomplete, is not in conformity with applicable law, is conditioned in any way, 2 deviates from this RFP or contains erasures, ambiguities, alterations, or items of work not called for by this RFP; vi. To waive any informality, defect, non - responsiveness and /or deviation from this RFP that is not, in the City's sole judgment, material to the proposal; vii. To permit or reject, at the City's sole discretion, amendments (including information inadvertently omitted), modifications, alterations and /or corrections of proposals by some or all of the respondents following proposal submission; viii. To request that some or all of the applicants modify proposals based upon the evaluation of the City. F. The City may enter into negotiations for a contract, on terms and conditions satisfactory to the City with one or more selected applicant(s). However, the City reserves the right to terminate any negotiations at any time or conduct simultaneous, competitive negotiations with multiple applicants. The City reserves the right to negotiate acceptable terms in an otherwise unacceptable proposal. Such negotiations may result in changes in terms material to this RFP; in such an event, the City shall not be obligated to inform other applicants of the changes, or permit them to revise their proposals accordingly, unless the City, in its sole discretion, determines that doing so and permitting such is in the City's best interest. Should negotiations not prove satisfactory with the selected applicant(s), the City reserves the right to discontinue negotiations. Additional firms may be asked to enter into negotiations, and /or the City may solicit new proposals. IL BACKGROUND The City's contractor is currently upgrading the public amenities at CDM State Beach. The area will be improved with replacement infrastructure and visitor - serving amenities such as public restrooms, showers, a lifeguard facility, and landscaping. The facility shall include a self- contained concession area intended to provide food /drink service and beach rentals to beach visitors. For more information about the renovation, please see the City's website (www. city. newport- beach. ca. us then "Projects" then "Big Corona State Beach "). CDM State Beach includes open shoreline, day use 3 i parking, and nearby City parks. CDM State Beach also hosts major special events, including an annual sandcastle building competition and an antique car show. CDM State Beach is one of the community's most family - friendly beaches, because it has ocean -level parking and (typically) gentle surf conditions. The City is pleased to present this opportunity for interested individuals and /or businesses to submit proposals and qualifications for the operation of the beach concession facility that will be constructed as part of the renovated facilities. It shall be the responsibility of the selected applicant to install fixtures and equipment, and to operate the concession on behalf of the City. The concessionaire shall have the sole responsibility to finance or purchase all tenant fixtures located within the renovated facilities. Construction of the facility is scheduled to be completed by May 2006, and the concessionaire shall work with City's contractor regarding the installation of fixtures and equipment and necessary tenant improvements. III. PROJECT DESCRIPTIOiN The concession facility is intended for food and drinks as well as beach rentals, such as umbrellas and body boards. The concession area will be approximately one thousand forty -three (1,043) square feet in size and centrally located near the Lifeguard office. All utility services will be stubbed in, however, it will be the responsibility of the concessionaire to install service runs, including gas, water, and electricity in addition to completing interior finishes, equipment, and other tenant improvements (see Attachment 2 for detailed plans of the property). The concessionaire will be required to install adequate ventilation to operate a cooking grill. IV. CONCESSION OPERATIONS Concession operations are a key component to the overall character of CDM State Beach. The selected concessionaire will be required to satisfy the following conditions as a part of the concession operations: Personnel The concessionaire will be responsible for hiring the necessary personnel to conduct the daily operation of the concession. The concessionaire will comply with all federal, state, and local laws related to minimum wage, social security, nondiscrimination, ADA, unemployment compensation, and 4 workers' compensation. If required by the City, employees shall wear a uniform and /or identification badge. Operating Hours Hours of operation may vary, based upon seasons and weather. Concessions typically operate daily during summer months, beginning Spring Break and continuing through Labor Day. The primary operating hours are generally early morning to dusk. Off - season operations, particularly on weekends and warmer weekdays, is expected. Operations during cool off- season days is subject to discussion with city officials. The City does not intend to ask the concessionaire to remain open on days in which it is clearly not profitable to do so. The City invites proposers to identify specific hours of operation that will provide good customer service and concessionaire profitability. Menu Items The concessionaire is expected to serve quality food and drinks to meet the needs of the visiting public. Simple menu items, such as pizza, hamburgers, hot dogs, fries, and other snacks should be offered at prices consistent with prices charged at similar beach concessions (such as those located at San Clemente, Huntington Beach and Seal Beach). Beverages should include sodas, juice drinks, and bottled water. Beer and wine sales are currently not permitted by the City. Food Packaging and Debris The concessionaire shall use food packaging consistent with good environmental practices, including prohibiting Styrofoam from the premises, minimizing the use of PVC plastics (especially plastic bags for carrying food), and providing both trash receptacles and places for customers to dispose of recyclable products from the concession. Merchandise and Beach Rentals Beach rentals are very popular and considered an important element of the concession operation. The concessionaire is expected to offer rentals of such items as umbrellas, beach chairs, and body boards. Additional merchandise, such as sunscreen, hats, and other beach related products are recommended by the City to be made available for sale. 3 q V. CONSIDERATION & TFRM The City envisions that the concessionaire will pay a base rent plus a percentage rent to the City as consideration for the concessionaire's use of the facility and the property. Proposals should include the proposed base rent, percentage rent, and total rent anticipated to be paid for an initial five (5) year term. The City envisions intends to grant the concessionaire a five (5) year term, with one or more additional five (5) year option periods. The amount of option periods shall be negotiated with the proposers as a part of the City's decision process in advance of awarding the concession. The City will reserve the right to terminate the Concession Lease Agreement at any time in the event of the concessionaire's non - performance or default of the Concession Lease Agreement terms. All fixed facility improvements (fixtures, fixed cabinetry, shelving, etc) may become City property, at City's option, following the termination of the Concession Lease Agreement. Specific language in this regard shall be included in the Concession Lease Agreement. VII. QUALIFICATIONS To ensure a high - quality level of operation for the facility, applicants must demonstrate minimum experience and qualifications. Applicants must complete the City's Vendor Application Form (see Attachment 3) and provide evidence of the following: Experience in successfully operating and managing a similar type of business for a minimum of three (3) years. C Fiscal solvency and capacity to complete necessary tenant improvements. O Demonstrated track record of being an equal opportunity employer. A Must not be currently indebted to the federal government, State of California, or the City of Newport Beach for non - payment of taxes, fines, judgments, liens, or fees. The applicant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such IM, persons to disclose any financial interest that may foreseeably be materially affected by the work to be performed pursuant to this RFP, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, the applicant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate rejection of the applicant's proposal, or, if the Concession Lease Agreement is already entered into with the applicant, immediate termination of that Agreement by City. The applicant shall be required to indemnify, defend and hold harmless City for any and all claims for damages resulting from the applicant's violation of this provision. Additional copies of this RFP, as well as copies of documents referenced in this RFP, may be obtained online at www. city. newport- beach. ca. us. Copies may also be obtained at the Revenue Division, City of Newport Beach, 3300 Newport Blvd., Newport Beach, CA 92658 -8915. VII. PROPOSAL INSTRUCTIOYNS Submission Date and Requirements One original and five unbound copies of completed proposals must be submitted to: Evelyn Tseng Revenue Division City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 (Newport Beach, CA 92658 -8915 The following conditions apply to this submission: C Proposals must be submitted by 4:00 PM, on December 2, 2005. G Proposals must be signed, in ink, by an individual duly authorized to bind the applicant and must be sealed and labeled on the cover with the RFP title and applicant's name. G Proposals must be 1 1/2 spaced (or double- spaced) and in a font size of 12 or larger. Proposals typed single- spaced or in a font size smaller than 12 will not be accepted. 7 I cl Proposals or proposal components will not be accepted via facsimile (fax) transmission. G Proposals shall remain binding for one hundred twenty (120) days from the date of proposal submission. The City reserves the right, at its sole discretion, to reject and return, without evaluation, any proposal received after the proposal submission time and date, whether it is delivered by mail or otherwise. VIII. REQUIRED ELEMENTS OF PROPOSALS Applicants may submit any information they deem necessary and appropriate for the City to fully and completely evaluate their qualifications. The proposal must, at a minimum, include the following general information: 1. Vendor Application (Use form listed as Attachment 3) 2. Checklist for a Complete Submission (Use form listed as Attachment 4) 3. Description of the applicant's business structure, key staff and their qualifications. 4. Description of the applicant's relative experience in operating a concession or other similar business enterprise, including relative size of business operated, type of retail sales, etc. 5. An audited financial statement (or a financial statement prepared by a certified public accountant) from the last full year of operation of a similar business enterprise. If you wish for this financial information to be kept out of the public record, please submit ONE COPY in a separate envelope, with the words FINANCIAL INFORMATION' along with your name on the envelope. This information will be held apart from the proposal and will be returned upon completion of the selection process. 6. A proposed annual budget for the operation of the beach concession for the first five years. Include a brief narrative that generally describes the anticipated expenses, revenues, and net income for each year. 0 J 7. A sample menu, including proposed prices, together with a list of merchandise available for rent and /or sale. 8. A proposed rent structure (base rent and /or percentage rent) and proposed rental amount to be paid to the City. 9. At least three persons or businesses that have first hand knowledge of the applicant's ability to successfully operate and maintain a high - quality beach concession. If possible, at least one reference should be a public entity other than the City of Newport Beach. IX. ADDITIONAL REQUIREMENTS Insurance The concessionaire must meet all the insurance requirements required by the Concession Lease Agreement. (See Attachment 5 for insurance language). All applicants are encouraged to contact their insurance carriers during the review of qualifications stage to ensure that the insurance requirements can be met if the applicant is selected for negotiation of a contract. Codes and Licensing The concessionaire must comply with Orange County Public Health Codes regulating food establishments, and the concession must meet applicable City Codes for Plumbing, Building, Electrical, and Fire. X. REVIEW OF PROPOSAL RESPONSES Review process All proposals received by the deadline will be evaluated by a committee ( "Review Committee ") established by the City Manager or his designated representative. Upon the review and discussion of the quality and responsiveness of the proposals received, the Review Committee will make recommendations to the Newport Beach City Council. The City discourages any proposer's advocacy before Members of the City Council until such time as the Review Committee has brought forth its recommendation to the City Council. 9 Notification of Awards The successful applicant will be required to execute the Concession Lease Agreement with the City, which is subject to formal approval by the Newport Beach City Council. The City anticipates that the selected applicant will participate in the completion of all tenant improvements of the concession facility and open for business during the month of May 2006. ATTACHMENTS 1. Location Map for Concession 2. Facility Floor Plan and Elevations 3. Vendor Application Form 4. RFP Submission Checklist S. Summary of City of Newport Beach Insurance Requirements 10 ATTACHMENT T b CORONA ®EN_ MAR STATE BEACH SITE PLAN (ATTACHED) I I I ii- I 0 WIND= I g J% I CIB4--- o 0:10.1y I'm o Ei E-i g o ci Ei i--i Ei Ei Ei E. 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Title Phone Names and Titles of Business Officers Names Title MIT*=13 Does business have any liens or claims? (If so, please indicate by whom and specify lien or claim, including any tax delinquencies) Name of Company Claim Lien Amount Please provide the following: Federal Tax Identification Number: City of Newport Beach Business License Number: (If none, selected vendor must obtain a Newport Beach Business License prior to execution of contract.) ATTACHMENT 4 CORONA DEL MAR STATE BEACH CONCESSION RFP SUBMISSION N CHECKLIST Name of Applicant ❑ Vendor Application ❑ RFP Checklist ❑ Business Structure, Key Staff and their Qualifications ❑ Description of Experience ❑ Financial Information ❑ Budget Information ❑ Sample Menu ❑ References ATTACHMENT 5 SUMMARY OF CITY OF NEWPORT BEACH INSURANCE REQUIREMENTS The following insurance language will be included in the Concession Lease Agreement and will be non - negotiable. All applicants should contact their insurance carriers to ensure that the insurance requirements can be met if the applicant is selected before submitting a proposal to the City: In addition to insurance required of Concessionaire to be obtained, provided, and maintained during the construction of the Improvements, and without limiting Concessionaire's indemnification of City, Concessionaire shall obtain, provide and maintain at its own expense during the term of this Agreement, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. A. Certificates of Insurance. Concessionaire shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to execution of this Agreement by the City. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. B. Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. C. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. D. Food Preparation. Concessionaire shall install at concessionaire's own expense any fire protective systems in grill, deep fry, and cooking areas which are required by city, county, and state fire ordinances, and such system when installed shall qualify for full fire protective credits allowed by the fire insurance rating and regulatory body in whose jurisdiction the Leased Area is located. E. Coverage Requirements. i i. Workers' Compensation Coverage. Concessionaire shall maintain Workers' Compensation Insurance at statutory limits and Employer's Liability Insurance at One Million and 00 /100 Dollars ($1,000,000.00) for his or her employees in accordance with the laws of the State of California. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (ten (10) calendar days written notice of non - payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for all losses that relate in any way to this Agreement.. ii. General Liability Coverage. Concessionaire shall maintain commercial general liability insurance in an amount not less than One Million and 00 /100 Dollars ($1,000,000.00) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. iii. Automobile Liability Coverage. Concessionaire shall maintain automobile insurance covering bodily injury and property damage for all activities of the Concessionaire arising out of or in connection with the services to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than One Million Dollars and 00 /100 Dollars ($1,000,000.00) combined single limit for each occurrence. iv. Fire and Extended Coverage. Concessionaire shall maintain fire and extended coverage insurance, together with insurance against vandalism, theft and malicious mischief, on the improvements and fixtures, alterations, trade fixtures, signs, equipment, personal property and inventory on or upon the Leased Area from loss or damage to the extent of their full replacement value. v. Concessionaire shall maintain loss of rent insurance insuring that the Base Rent will be paid to City for a period up to six (6) months if the Premises are destroyed or rendered unusable or inaccessible for commercial purposes by a risk insured under a special form property coverage policy including vandalism and malicious mischief endorsements. E. Endorsements. Each insurance policy shall be endorsed with the following specific language: i. The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Concessionaire. ii. This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Concessionaire's operations or services provided to City. Any insurance maintained by City, including any self- insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. iii. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. iv. The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. v. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. vi. The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits, by either party except after thirty (30) calendar days (ten (10) calendar days written notice of non- payment of premium) written notice has been received by City. F. Timely Notice of Claims. Concessionaire shall give City prompt and timely notice of claim made or suit instituted arising out of or resulting from Concessionaire's performance under this Agreement. G. Additional Insurance. Concessionaire shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. H. Subcontractors. In the event Concessionaire subcontracts, the contract between Concessionaire and such subcontractor shall require the subcontractor to maintain the same policies of insurance that Concessionaire is required to maintain pursuant to this Section. CONCESSION AGREEMENT TERMS Corona del Mar Concession TERM Term of Lease — 5 years Option to Extend — 2 five -year periods RENT The greater of Base Rent or Percentage Rent, to be paid on a monthly basis. Base Rent - $80,000 /yr Base Rent adiusment — annual cpi increase Percentage Rent — 35% of gross sales USE Hours of Operation — To be determined based on discussions with selected vendor. INSURANCE In addition to insurance required of Concessionaire to be obtained, provided, and maintained during the construction of the Improvements, and without limiting Concessionaire's indemnification of City, Concessionaire shall obtain, provide and maintain at its own expense during the term of this Agreement, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. A. Certificates of Insurance. Concessionaire shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to execution of this Agreement by the City. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. B. Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. 1 C. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. D. Food Preparation. Concessionaire shall install at concessionaire's own expense any fire protective systems in grill, deep fry, and cooking areas which are required by city, county, and state fire ordinances, and such system when installed shall qualify for full fire protective credits allowed by the fire insurance rating and regulatory body in whose jurisdiction the Leased Area is located. E. Coverage Requirements. i. Workers' Compensation Coverage. Concessionaire shall maintain Workers' Compensation Insurance at statutory limits and Employer's Liability Insurance at One Million and 00/100 Dollars ($1,000,000.00) for his or her employees in accordance with the laws of the State of California. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (ten (10) calendar days written notice of non - payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for all losses that relate in any way to this Agreement. ii. General Liability Coverage. Concessionaire shall maintain commercial general liability insurance in an amount not less than One Million and 00/100 Dollars ($1,000,000.00) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. iii. Automobile Liability Coverage. Concessionaire shall maintain automobile insurance covering bodily injury and property damage for all activities of the Concessionaire arising out of or in connection with the services to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than One Million Dollars and 00/100 Dollars ($1,000,000.00) combined single limit for each occurrence. iv. Fire and Extended Coverage. Concessionaire shall maintain fire and extended coverage insurance, together with insurance against vandalism, theft and malicious mischief, on the improvements and fixtures, alterations, trade fixtures, signs, equipment, personal property and inventory on or upon the Leased Area from loss or damage to the extent of their full replacement value. v. Concessionaire shall maintain loss of rent insurance insuring that the Base Rent will be paid to City for a period up to six (6) months if the Premises are destroyed or rendered 2 r. unusable or inaccessible for commercial purposes by a risk insured under a special form property coverage policy including vandalism and malicious mischief endorsements. E. Endorsements. Each insurance policy shall be endorsed with the following specific language: i. The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Concessionaire. ii. This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Concessionaire's operations or services provided to City. Any insurance maintained by City, including any self- insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. iii. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. iv. The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. v. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. vi. The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits, by either party except after thirty (30) calendar days (ten (10) calendar days written notice of non - payment of premium) written notice has been Deceived by City. F. Timely Notice of Claims. Concessionaire shall give City prompt and timely notice of claim made or suit instituted arising out of or resulting from Concessionaire's performance under this Agreement. G. Additional Insurance. Concessionaire shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. H. Subcontractors. In the event Concessionaire subcontracts, the contract between Concessionaire and such subcontractor shall require the subcontractor to maintain the same policies of insurance that Concessionaire is required to maintain pursuant to this Section. 193 .: J i ................ -- - Houston General Insurance ----------------------------------------------- Common Policy Declarations -------------------------------------------------------------------------------- Commercial Package Policy Policy #: 03- 13 -24 -1 Renewal of: 03 -13 -24 -------------------------------------------------------------------------------- UCA General Insurance Services ------------------------------------------------------------------------------- Named Insured: Kilmer Enterprises, Inc. Address: 1843 Port Kimberly Place Newport Beach CA 92660 Policy Period: From 03/17/95 12:01 AM Standard Time To 03/17/96 -------------------------------------------------------------------------------- IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY. -------------------------------------------------------------------------------- This policy consists of the following coverage parts for which a premium is indicated. This premium may be subject to adjustment. Section I Coverages Section II Coverages Form of Business: Corporation Forms applicable to all Coverage Parts: RES -1 Included Included Policy Premium $ 5,888.00 CIGA Fee $ 36.51 Total Amount $ 5,924.51 ************************************************* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** • THE CIGA SURCHARGE APPEARING ON THIS DECLARATION PAGE OF THIS POLICY IS • REQUIRED BY LAW. THESE FUNDS ARE USED BY THE CALIFORNIA INSURANCE GUARANTEE • ASSOCIATION FOR INSOLVENT INSURANCE COMPANIES. ************************************************* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** Countersigned 07/07/95 Extra Copy COMMERCIAL PACKAGE POLICY - RESTAURANT PROGRAM APPLICABLE FORMS CPP 03- 13 -24 -1 The following forms and endorsements are hereby made part of this policy at the time of issue. General Conditions: GU266 11/85,GU267 11/85,GU363b 2/94 Section I: CF100 11 /85,CF111 11/85,CF200 11/85,CF236 11/85,CF325 4/86 CF105 11/85,CF216 11 /85,CF215 11/85,CF224 11/85 Section II: CL100 11/85,GU276A 11/85,CL281 11/85,CL335 11/85,CL392 11 /85, CO END #7 CO END #13, CO END #15, CO END #16, CO END #17, CO END #5 CL236 11 /85,COEND #8, Section III: Section IV: CI100 11 /85,CI111A 11/85 10/94 ed. RES -1 Restaurant Program Extra Copy O1 /CA i COMMERCIAL PACKAGE POLICY RESTAURANT EXTENSION ENDORSEMENT 1412 =11CM1191w0m 0 OFF PREMISES POWER FAILURE: We will pay up to $5,000.00 for loss or damage to covered Personal Property that results from an interruption of power or utility service. However, the interruption must be caused by physical damage to public utility equipment off your premises that directly furnishes elec- tricity, steam, or gas to a covered location. FOOD SPOILAGE: (Due to Mechanical Breakdown) We will pay up to $5,000.00 for Food Spoilage resulting from the complete stoppage of refrigeration equipment caused by mechanical breakdown. Mechanical Breakdown means the breaking or parting of any mechanical part of a refrigeration unit. It also means the burning out of an electrical motor which is part of the refrigeration unit. This coverage applies to covered Personal Property only. AUTOMATIC FIRE SUPPRESSION SYSTEM EQUIPMENT: We will pay up to $5,000.00 to covered Personal Property for loss or damage resulting from the accidental discharge of chemicals from an automatic cooking protection system. CREDIT CARD SLIPS: We will pay up to $5,000.00 for amounts you are unable to collect because of a covered loss to your credit card slips while they are at a covered location. This limit is the most we will pay in any one occurrence. If it isn't possible to determine the amount involved in such a loss, your past business experience will be used as a guide in setting an amount. A $250.00 deductible applies to each Extension shown above, per Claim. All other applicable terms and conditions of this policy apply unless they are specifically contradicted by provisions that appear within each Extension. This Endorsement modifies insurance provided under the following: CAUSES OF LOSS - BASIC FORM; CAUSES OF LOSS - BROAD FORM; and /or CAUSES OF LOSS - SPECIAL FORM. 4/91 ed. REX -2 Restaurant Extension End. Extra Copy O1 /CA 0 0 Houston General Insurance -------------------------------------------------------------------------------- Commercial Package Policy Policy Number 03- 13 -24 -1 -------------------------------------------------------------------------------- Named Insured: Kilmer Enterprises, Inc. Address: 1843 Port Kimberly Place Newport Beach CA 92660 Policy Period: From 03/17/95 12:01 AM Standard Time To 03/17/96 -------------------------------------------------------------------------------- Additional Insured: City of Newport Beach w /respects to concession stands 3300 Newport Blvd. Loc# 1 Bld# 1 Newport Beach CA 92660 Additional Insured: City of Newport Beach 3300 Newport Blvd Newport Beach w /respects to the concession stands. Loc# 2 Bld# 1 CA 92660 Additional Insured: State of California,It's Officers,Employees,& Servants Dept. of Parks Concessions Loc# 3 Bld# 1 Program Division P.O.Box942896 Sacramento CA 94296 -0001 Additional Insured: State of California,It's Officers,Employees,& Servants Dept. of Parks Concessions Loc# 4 Bld# 1 Program Division P.O.Box942896 Sacramento CA 94296 -0001 Additional Insured: State of California,It's Officers,Employees,& Servants Dept. of Parks Concessions Loc# 5 Bld# 1 Program Division P.O.Box942896 Sacramento CA 94296 -0001 Additional Insured: State of California,It's Officers,Employees,& Servants Dept. of Parks Concessions Loc# 6 Bld# 1 Program Division P.O.Box942896 Sacramento CA 94296 -0001 Mortgagee: State of California,It's Officers,Employees,& Servants Dept. of Parks Concessions Loc# 4 Bld# 1 Program Division P.O.Box942896 Sacramento CA 94296 -0001 LP -1 Extra Copy 01 /CA 0 0 Mortgagee: State of California,It's Officers,Employees,& Servants Dept. of Parks Concessions Loc# 5 Bld# 1 Program Division P.O.Box942896 Sacramento CA 94296 -0001 Mortgagee: State of California,It's Officers,Employees,& Servants Dept. of Parks Concessions Loc# 3 Bld# 1 Program Division P.O.Box942896 Sacramento CA 94296 -0001 Mortgagee: State of California,It's Officers,Employees,& Servants Dept. of Parks Concessions Loc# 6 Bld# 1 Program Division P.O.Box942896 Sacramento CA 94296 -0001 LP -1 Extra Copy Ol /CA 0 Houston General Insurance 0 ADVISORY STATEMENT COMMERCIAL PROPERTY COVERAGE PART -------------------------------------------------------------------------------- Commercial Package Policy Policy Number 03- 13 -24 -1 -------------------------------------------------------------------------------- UCA General Insurance Services -------------------------------------------------------------------------------- Named Insured: Kilmer Enterprises, Inc. Address: 1843 Port Kimberly Place Newport Beach CA 92660 Policy Period: From 03/17/95 12:01 AM Standard Time To 03/17/96 -------------------------------------------------------------------------------- IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY. --------------------------------------------------------- ----------- ------ - - - - -- Description of Premises: loc# bld# Location /construction /occupancy 1 1 900 Shore Avenue Corona Del Mar CA 92660 Masonry Restaurant 2 1 0 Del Mar State Beach Newport Beach CA 92660 Masonry Restaurant 3 1 0 Coast Hwy @ Brookhurst Huntington Beach CA 92646 Masonry Restaurant 4 1 0 Coast Hwy @ Magnolia Huntington Beach CA 92646 Masonry Restaurant 5 1 0 Coast Hwy @ Beach Huntington Beach CA 92646 Masonry Restaurant 6 1 0 Coast Hwy @ Newland Huntington Beach CA 92646 Masonry Restaurant Coverages Provided (insurance at the described premises applies only for coverages for which a limit of insurance is shown) loc# bld# Coverage PR -01 Extra Copy Limit Deductible Co -ins O1 /CA 0 0 Coverages Provided (insurance at the described premises applies only for coverages for which a limit of insurance is shown) loc# bld# Coverage Limit Deductible Co -ins a 3 1 Building - Basic Form - Replacement Cost 48,000 500 90.00 SEE NEXT PAGE Policy Page: 1 PR -02 01 /CA Extra Copy 0 Coverages Provided (insurance at the described premises applies only for coverages for which a limit of insurance is shown) loc# bld# Coverage Limit Deductible Co -ins o 4 1 Building - Basic Form - Replacement Cost 48,000 500 90.00 5 1 Building - Basic Form - Replacement Cost 48,000 500 90.00 6 1 Building - Basic Form - Replacement Cost 48,000 500 90.00 1 1 Personal Property - Basic Form - Rep Cost - Inc Stock 25,000 500 90.00 3 1 Personal Property - Basic Form - Rep Cost - Inc Stock 20,000 500 90.00 4 1 Personal Property - Basic Form - Rep Cost - Inc Stock 20,000 500 90.00 5 1 Personal Property - Basic Form - Rep Cost - Inc Stock 20,000 500 90.00 6 1 Personal Property - Basic Form - Rep Cost - Inc Stock 20,000 500 90.00 2 1 Personal Property - Broad Form - Rep Cost - Inc Stock 25,000 500 90.00 2 1 Signs - Broad Form - Aggregate Limit 5,000 250 0.00 1 1 Signs - Basic Form - Aggregate Limit 5,000 250 0.00 PR -02 Extra Copy 01 /CA 0 0 Houston General Insurance -------------------------------------------------------------------------------- GENERAL LIABILITY LIMITS FORM -------------------------------------------------------------------------------- Commercial Package Policy Policy Number 03- 13 -24 -1 -------------------------------------------------------------------------------- UCA General Insurance Services -------------------------------------------------------------------------------- Named Insured: Kilmer Enterprises, Inc. Address: 1843 Port Kimberly Place Newport Beach CA 92660 Policy Period: From 03/17/95 12:01 AM Standard Time To 03/17/96 -------------------------------------------------------------------------------- IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY. -------------------------------------------------------------------------- - - - - -- General Liability General Aggregate Limit Each Occurrence Limit Products & Completed Operation Limit Personal Injury and Advertising Limit Fire Damage Limit Medical Expense Limit Liquor Law Liability General Aggregate Limit Each Common Cause Loc /Bld Class 1 1 Pref. Restaurant 1 1 Same LM -1 Extra Copy Code No. 334 -16816 336 -16816 1,000,000 1,000,000 Included Excluded 100,000 5,000 Excluded Excluded Premium Basis A) 400 Incl. O1 /CA • • POLICY NUMBER: COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - MANAGERS OR LESSORS OF PREMISES This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE 1. Designation. of Premises (part leased to you) : PER PR -01 & CL 281 11/85 2. Name of Person or Organization ( Additional Insured): PER LP -01 3. Additional Premium: INCLUDED (If no entry appears above, the information required to complete this endorsement will be shown in the declarations as applicable to this endorsement.) Who is an Insured (section II) is amended to include as an insured the person or organization shown in the Schedule but only with respect to such person or organization's liability which both (1) arises out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Schedule, and (2) results from and by reason of your act or omission or an act or omission of your agent or employee in the course of your operations at that part of the premises leased to you and shown in the Schedule, and subject to the following additional exclusions: CO END. r8 9 \94 This insurance does not apply to: 1. Any "occurrence" which takes place after you cease to lease the premises shown in the schedule; or 2. Structural alterations, new construction or demolition operations performed by or on behalf of the person or organization shown in the Schedule; or 3. Liability arising out of the sole negligence of the person or organization shown in the Schedule. I Houston General Insurance ADVISORY STATEMENT COMMERCIAL INLAND MARINE COVERAGE PART -------------------------------------------------------------------------------- Commercial Package Policy Policy Number 03- 13 -24 -1 -------------------------------------------------------------------------------- UCA General Insurance Services -------------------------------------------------------------------------------- Named Insured: Kilmer Enterprises, Inc. Address: 1843 Port Kimberly Place Newport Beach CA 92660 Policy Period: From 03/17/95 12:01 AM Standard Time To 03/17/96 -------------------------------------------------------------------------------- IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY. ------------------------------------------------------------------ -------- - - - - -- Business Description: Restaurant -------------------------------------------------------------------------------- loc# bld# Coverage Deductible Limit 1 1 Accts Receivable - at Loc. shown -in metal file cabinet 0 5,000 Countersigned 07/07/95 IN -01 01 /CA Extra Copy X �ARTMENT OF PARKS AND RECREATION CERTIFICATE OF INSURANCE e December 6,1991 This is to certify that the following described insurance, and endorsements shown, are in force.with named insurer for period and limits shown on behalf of following named contractor (assured): Assured: Kilmer Enter nri-9e5 Ir1C Address: 1843 Port Kimberly Place, Newport Beach, CA 92660 Type of Business: Concessionaire Location Covered: Del r SFatP Ape h, Tia"t-t Ruch, VA 976CO (Situs of Contract) Insurer: Rican Bondinq CoMPanY C/O U.C. A. Address: 18110 Rn_ Pimmr nli�,,,y Ay-+--,*-C—A Policy Number: CPP009989 90702 v Policy Dates: From: 3/17/91 To 3/17/92 Special endorsement to policy: 1. State of California, its officers, employees; and servants are included as additional insured but only insofar as operations under this contract are concerned; 2. The insurer will not cancel or reduce the insured's coverage without 30 days prior written notice to State; 3. The State will not be responsible for premiums or assessments on the policy. Insurer shall furnish State a certified copy of the policy within fifteen days upon request. Kind of Insurance Limits Exposures Applicable to Bodily Injury Per Occurrence Property Damage General Liability $1,000,000 Per Occurrence Combined Single Limit (CSL), $1,000,000 General Aggregate At matkx Products Liability Fire Workmen's Compensation Insurance as required in California State Labor Code of all California Employers is in force and carried with: Fremmt Canpensation Insurartce _ Under Policy No. _DA91- 1!11161 Company C\ Agent or ompany Representative "Certificate must be executed by insurance agent, or employee or insurer, authorized to certify existence of described insurance. DPR 169 (Rev. 12476) SEYMOUR /H[TICHINGS INS. SERV.,INC P.O. BOX 25125 ANAHEIM, CA 92825.5125 (714) 385 -1555 INSURED KILMER ENTERPRISES, INC. 1843 PORT KIMBERLY PLACE NEWPORT BEACH, CA 92660 3 -14 -89 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE I COMPANY LETTER A SIERRA PACIFIC INSURANCE COMPANY COMPANY B LETTER LIABILITY LIMITS IN THOUSANDS COMPANY C LETTER A COMPANY D LETTER 3 -17 -89 COMPANY E LETTER $ THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUEDTOTHE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS, AND CONDI- TIONS OF SUCH POLICIES. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE WWDONY) POLICY EXPIRATION PATE (MMIDCVY LIABILITY LIMITS IN THOUSANDS EACH OCCURRENCE AGGREGATE A GENERAL LIABILITY COMPREHENSIVE FORM PREMISES /OPERATIONS UNDERGROUND EXPLOSION 8 COLLAPSE HAZARD PRODUCTS/COMPLETED OPERATIONS coerRACruAL INDEPENDENT CONTRACTORS BROAD FORM PROPERTY DAMAGE PERSONAL INJURY TO BE DETERMINED 3 -17 -89 3 -17 -90 BODILY INJURY C ,G $ PROPERTY DAMAGE $ $ 518 PD COMBINED $1 , 000 $ 1,000 PERSONAL INJURY $ 1,000 AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS (PRIV. PASS,) ALL OWNED AUTOS PRVRPASSN) HIRED AUTOS NON -OWNED AUTOS GARAGE LIABILITY BOOM/ INJURi iPER PERSONI $ BMILY NJUAY IPER A20SxTi $ PROPERTY DAMAGE $ BI s PD COMBINED $ EXCESS LIABILITY UMBRELLA FORM OTHER THAN UMBRELLA FORM el a PD COMBINED $ $ WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY STATUTORY $ (EACH ACCIDENT) $ (DISEAS6POLICV LIMIT) $ (DISEASE'EACH EMPLOYEE) OTHER ) UtSUHIPI IUN Uf OPtHAIIUNS /LOCATIONSNEHICLESISPECIAL ITEMS RESTAURANTS SITUATED: 900 SHORE AVE, CORONA DEL MAR, CA AND DEL MAR STATE BEACH, NEWPORT BEACH, CA. CERTIFICATE HOLDER IS ADDITIONAL NAMED INSURED. CITY OF NEWPORT BEACH SHOULD ANY OF THE ABOVE Of SCRIBED POLICIES BE CANCELLED BEFORE THE EX- PIRATION DATE THEREOF THE ISSUING COMPANY WILL ENDEAVOR TO 3300 NEWPORT BLVD. MAIL DAYS WRITTEN OTICE TO THE CERTIFICATE HOLDER NAMED TO THE NEWPORT BEACH, CA 92660 �FFT, BLTIILURE T% MAIL UCH NOTIC LL I E NO OBLIGATION OR LIABILITY bE'`A101�IND11POp1 THE MPAN S OR REPRESENTATIVES. • Agenda Item 26 THE CfTY OF THE NECwppORTUBEA CITY OF NEWPORT BEACH OFFICE OF THE CITY MANAGER A r. CJ • DATE: TO: August 12, 1996 Honorable Mayor and Members of the City Council FROM: Peggy Ducey, Assistant to City Manager SUBJECT: Corona Del Mar Beach Concession Operation NED BACKGROUND The City of Newport Beach controls the two concession and equipment rental stands at the Corona Del Mar State Beach. The stands sell light food, sundries, and beach supplies as well as rent equipment such as backrests, umbrellas, and surfriders. Historically, the City has contracted the concession services to independent operators. The current operator, Kilmer Enterprises has a five year lease with the City that expires December 31, 1996. Kilmer Enterprises, currently pays the City 45% of the monthly gross receipts, which totaled $65,629 in FY 95/96. City Council Policy F -7 outlines the procedures necessary to bid a concession lease in recreation areas. The first step is to conduct an analysis of the operation to evaluate both the maximum potential income that this type of operation should produce as well as compare the City's revenue share to similar concession leases. Once that current market value is determined, the City must then conduct an open bid process to ensure the maximum financial return. The City Manager, or his designee, will then negotiate the agreement, under the direction of the City Council Finance Committee. The City Council will authorize final approval of the agreement. The tentative schedule for the analysis, bid process, and award of the contract is as follows: Council Authorization to Proceed Market Analysis Publicized Period Inviting Bids Bids Opened Council Approval for Concession Agreement August 12, 1996 August- September Mid -Sept - October October 31, 1996 December 9, 1996 0 The Council Finance Committee will review each phase of this process before • a final agreement is brought to the City Council in December. RECOMMENDATION Authorize staff to proceed with the bid process for the Corona Del Mar Beach Concession, pursuant to City Council Policy F -7. • • a a F -7 INCOME PROPERTY The City owns and manages an extensive and valuable assortment of property including streets, parks, beaches, public buildings and service facilities. The City also owns and opebates a yacht basin, a mobile home park, a luxury residential development and various other income properties. Most of the income property is tidelands, filled tidelands or waterfront Unencumbered fee value of income property is estimated at upwards of one hundred million dollars, and income typically contributes ten percent of all City revenues. As owner of property, the City is the steward of a public trust, and state law requires the City to maximize its returns or be subject to a charge of making a gift of public funds. Nevertheless, the City Council recognizes the importance of this property not only as a revenue generator, but also as a means to provide otherwise unfeasible uses and facilities to benefit the community. In managing its property, the City will continually evaluate the potential of all City owned property to produce revenue. This may include leasing unused land, renting vacant space, establishing concessions in recreation areas or other similar techniques. The City Council will evaluate the appropriateness of establishing new income properties using sound business principals and after receiving input from neighbors and users. The policy of the City Council is that income property be managed in accordance with the following: 1. Whenever a lease, management contract, concession, sale or similar action regarding income property is considered by the City, an analysis shall be conducted to determine the maximum or open market value of the property. This analysis shall be conducted using appraisals or other techniques to determine the highest and best use of the property and the highest value of the property. 2. All negotiations regarding the lease, management contract, concession, sale or similar action regarding income property shall include review of an appraisal or analysis of the use being considered for the property conducted by a reputable and independent professional appraiser, real estate consultant or business consultant. 3. The City shall seek, whenever practical and financially advantageous, to operate or manage all property and facilities directly with City staff or contractors. I i 11 F -7 4. In all negotiations regarding the lease, management contract, concession, 49 sale or similar action regarding a non - residential income property, the City shall seek revenue equivalent to the open market value of the highest and best use; and, whenever possible the City shall conduct an open bid or proposal process to insure the highest financial return. v 5. Whenever less than the open market or appraised value is received or when an open bid process is not conducted, the City shall make specific findings setting forth the reasons thereof. Such findings may include but need not be limited to the following: (a) The City is prevented by tideland grants, Coastal Commission guidelines or other restrictions from selling the property or converting it to another use. (b) Redevelopment of the property would require excessive time, resources and costs which would outweigh other financial benefits. (c) Converting the property to another use or changing the manager, • concessionaire or lessee of the property would result in excessive vacancy, relocation or severance costs which would outweigh other financial benefits. (d) Converting residential property to another use or opening residential leases to competitive bid would create recompensable liabilities and other inequities for long -term residents. (e) The property provides an essential or unique service to the community that might not otherwise be provided were full market value of the property be required. (f) The property serves to promote other goals of the City such as affordable housing, preservation of open space or marine related services. 6. Generally, lengths of leases, management contracts, concessions or similar agreements will be limited to the minimum necessary to meet market standards and will contain appropriate reappraisal and inflation protection provisions. Also, all agreements shall contain provisions to assure complete audits periodically through their terms. so 2 • F -7 7. All negotiations regarding the lease, management contract, concession, sale or similar action regarding income property shall be conducted by the City Manager or his designee under the direction of the City Council Finance Committee or other appropriate committees prior to consideration by the City Council. c Adopted - July 27,1992 Formerly F-24 Amended - January 24,1994 Amended - February 27,1995 ID CITY OF NEWPORT BEACH OFFICE OF THE CITY CLERK P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915 (714) 644 -3005 TO: FINANCE DIRECTOR FROM: CITY CLERK DATE: December 20, 1991 SUBJECT: Contract No. C -1920 Description of Contract Concession Aaegment (Corona del Mar State and City Beach Park) Effective date of Contract November 13, 1991 Authorized by Minute Action, approved on November 12, 1991 Contract with Kilmer Entprprjg5es, ,Inc- Address P.O. Box 772 Corona del Mar, CA 92625 Amount of Contract (See g ement) Wanda E. Raggio City Clerk WER:pm Attachment 3300 Newport Boulevard, Newport Beach M. CITY OF NEWPORT BEACH Parks, Beaches and Recreation Department November 12, 1991 CITY COUNCIL AGENDA ITEM NO. J -1 TO: Mayor and City Council FROM: Parks, Beaches and Recreation Director SUBJECT: CORONA DEL MAR BEACH CONCESSION AGREEMENT C-1904> RECOMMENDATION• Authorize the Mayor and City Clerk to execute an agreement with T &G, Inc. to operate the concession at Corona del Mar State and City Beach Park for the period of January 1, 1992 to December 31, 1996. DISCUSSION: As authorized by the City Council on September 9, 1991, bid proposals were received from prospective operators and opened on October 22, 1991 at 10:00 A.M. by the City Clerk. State of California approval of this process is attached for your information. The City Attorney's office has determined all bids are responsive to the Notice to Prospective Concessionaires. BID ANALYSIS The Notice to Prospective Concessionaires indicates that criteria for making the award will include, but not be limited to, the following: 1. Past experience and performance in operating similar food and beverage rental concessions. 2. Financial reliability. 3. Monetary return to the City. The Newport Beach City Council shall be the sole judge of the best qualified bidder and will determine who shall be granted the concession agreement. The City Council also reserves the right to reject any and all proposals. Using this criteria, the following analysis is provided for the top two bids: (3V)i 9 L Experience 1. T &G. Inc, is a newly formed corporation with principals being Terry F. Tuchman and Jack L. Griffitts. Mr. Tuchman has a doctorate degree in Business Finance from the University of Southern California and is employed as a School District Administrator. Dr. Tuchman is actively involved in a group of four Mexican -style restaurants in the Phoenix /Tucson area which have been in operation for over 30 years. Mr. Griffitts is a graduate of the University of California, Santa Barbara, employed as an executive with a local service supply company. 2. Kilmer Enterprises is the current operator of the Corona del Mar concession and has operated this facility for the past 22 years. Mr. Kilmer is a graduate of California State University, Long Beach. The operation has been successful and has provided the City a reliable food service at this popular beach location. Financial Responsibility 1. T &G. Inc. has identified assets of $90,000 available for use in this concession operation. 2. Kilmer Enterprises has identified assets of $61,000 available for use in this concession operation. Monetary Return to the City Bids received guarantee the following percentages of gross sales: 1. T &G, Inc. 48% of gross sales to $225,000.00 40% of gross sales exceeding $225,000.00 2. Kilmer Enterprises 45% of gross sales 3. Rex, Robert, William Stephens 30% of gross sales 4. Campus Service 23.5% of gross sales Gross Sales Prior Years 1986 -87 $215,290.00 1987 -88 204,586.00 1988 -89 204,327.00 1989 -90 214,581.00 1990 -91 218,044.00 9 0 Both firms project their gross sales to be $250,000.00 annually. If previous years gross sales are used to be an indicator, the T &G, Inc. bid would provide the City 3% more of gross sales or approximately $7,500.00 above that of the Kilmer Enterprises bid. If the top bidder's projected gross sales figure of $250,000.00 is used to determine the return to the City, a benefit of $5,500.00 would be realized from the T &G, Inc. bid. Conclusions The City Council has the legal authority to award a concession agreement to either T &G, Inc. or Kilmer Enterprises. Staff believes T &G, Inc. will operate a concession that is at least equal, and possibly superior, to Kilmer Enterprises, and their proposal would, assuming an average of gross sales for the past five years, result in slightly more income to the City. On the other hand, Kilmer Enterprises has operated this concession for 22 years, has provided reliable service as well as a steady income stream, and obviously has more experience than T &G, Inc. 0 STATE OF CAUFORNU1— RESOURCES AGENCY PETE WILSON, Govemor DEPARTMENT OF PARKS AND RECREATION P.O. BOX 942896 SACRAMENTO 94296 -0001 (916) 653 -8380 SEP 19 1991 Mr. Ronald A. Whitley, Director Parks, Beaches, and Recreational Department City of Newport Beach P.O. Box 1768 Newport Beach, California 92659 -1768 Dear Mr. Whitley: Pursuant to the existing agreement between the City of Newport Beach and the Department of Parks and Recreation for City operation of Corona Del Mar State Beach, I have reviewed the terms and conditions under which the City proposes to re -bid the beach stand concession at Corona Del Mar State Beach. In accordance with the provisions of Section 5080.33 of the Public Resources Code for the State of California, I hereby authorize the City of Newport Beach to proceed with the public bid of this concession opportunity. Please note that Section 5080.33 of the Public Resources Code requires that the public bidding procedures to be used by the City provide for at least the same degree of participation and competition as those procedures established by 5080.02 et sec. of the Public Resources Code. A copy of the applicable code sections is enclosed for your reference. Also note that the minimum acceptable bid for the project, as presented to the Legislature for review and approval, was 33.2 percent of gross sales or $85,000, whichever is greater. A copy of the 1991/92 Supplemental Budget Language authorizing public bid of the project is enclosed for your reference. Upon completion of the bid process and final execution of the new contract, please provide the Department with a copy of the signed contract together with a "verification of process" statement in the format enclosed. This information, along with any questions, should be directed to Andrea W. Patterson, Chief, Concession Programs Division. Ms. Patterson can be reached at (916) 653 -5676. Ap PAII= `V F d n p �P8is1 0 Mr. Ronald A. Whitley Page Two C Thank you for your continued cooperation in regard to Corona Del Mar State Beach. Enclosure f" Sincerely, He ry gonia Directlr STATE OF CALIFORNIA— RESOURCES AGENCY PETE WILSON Gawmor DEPARTMENT OF PARKS AND RECREATION P.O. BOX 942896 SACRAMENTO 94296-0001 (916) 445 -9060 AUG 06 1991 Mr. Ronald A. Whitley, Director Parks, Beaches and Recreation Department City of Newport Beach P. O. Box 1768 Newport Beach, California 92659 -1768 Dear Mr. Whitley: Your request for bid of the Corona Del Mar concession has been reviewed and approved by the State Legislature. A copy of the Supplemental Language of the 1991/92 Budget Bill is enclosed for your information. As you are aware, the Director of the Department of Parks and Recreation must also authorize the bid. To this end, please submit a copy of your proposed bid package through this office for review, approval and formal authorization. Thank you for you continued cooperation. Enclosure Sincerely, Andrea W. Patterson, Chief Concession Programs Division 4,s= x 4 v� +1rvaa9 ►1 s • KILMER ENTERPRISES, INC. Corona del Mar State Beach Box 772 Corona del Mar, Calif. 92625 (714) 673 -3174 October 31, 1991 The Honorable Phil Sansone, Mayor Members of the City Council City of Newport Beach 3300 Newport Blvd. Newport Beach, California 92663 Re: Corona del Mar State -City Beach Concession Dear Mayor Sansone and Members of the City Council: This letter is being written to urge you to reject what appears to be the highest bid for the above mentioned Concession and retain my company, Kilmer Enterprises, Inc., as the City's concessionaire at Corona del Mar State -City Beach. I will outline for you the many sound reasons why I believe it is in the best interest of the City of Newport Beach to award the concession contract to my company. It is my understanding that the staff may be recommending an award of the concession to a company which has been newly formed for the purpose of obtaining the concession. It is my further understand- ing, however, that the City Council is not bound to accept the highest bid, and, for that matter, could reject all bids if it so chooses. In making its decision, the Council is guided by many factors. Besides considerations of proper management of the public trust, the most qualified and "best responsible bidder" are crite- ria as set forth in the bid proposal which should be given the highest priority. As President of Kilmer. Enterprises, Inc. and as a forty year resi- dent of Newport Beach, I have worked to better this community. I have provided summer jobs over the years for many of our local high school students. I, personally, have served as. president and vice president of my homeowners association in Harbor View Homes and, in 1977, I was appointed to the City Council's Litter Advisory Commit- tee and have continuously served the City of Newport Beach to this date through the transition of the Litter Committee to the City's Environmental Quality Affairs Committee. I have been president of Kilmer Enterprises, Inc. since 1970. Kilmer Enterprises has a proven record with the City of Newport Beach and the State of California for almost twenty two (22) years of successfully operating the Corona del Mar City -State Beach Concession. Every effort has always been made to operate the busi- ness efficiently with particular attention paid to courtesy, quali- ty, cleanliness and fair prices. In this regard, attached is a copy of a letter dated in August of this year addressed to the under- signed from Jack B. Roggenbuck, District Superintendent, Department of Parks and Recreation, State of California. Mr. Roggenbuck's letter states that "You [Kilmer Enterprises, Inc.] are setting the standard for similar operations whether within City or State juris- dictions." With respect to the criteria for awarding the bid, it should be pointed out that Kilmer Enterprises, Inc. clearly satisfies the re- quirements pertaining to fiscal stability and operating capabili- ties. Kilmer Enterprises, Inc. is a well established company having been incorporated and continuously operating at Corona del Mar City -State Beach for over twenty years. The company also under consideration has no operating history, no long standing community involvement and was apparently formed for the sole purpose of bidding on this Concession. I would like to point out that the two bids in question are ex- tremely close and were based upon projected revenues which could vary for both operators. The difference is based on gross revenues which is undetermined and subject, to some extent, to the ability of the operator to generate revenues. In addition, it is clear that at some point, because of the reduction of percentage rent offered by the competitor, when revenues reach a particular level, Kilmer Enterprises, Inc. rent paid to the City would clearly exceed that of the competitor. This past summer I added several new items to our menu in an effort to increase gross revenues. Unfortunately, the weather was not cooperative. I am confident that such menu changes and continuing efforts to excel will produce an increase in revenues in the fu- ture. In conclusion, it is my belief that the some of the above factors clearly outweigh the pure "dollars and cents" criteria which are, in any event, very close. I respectfully submit that the best interests of the City of Newport Beach would best be served by retaining Kilmer Enterprises, Inc. as the "best responsible bidder" for operating the Concession at the Corona del Mar City -State Beach. Sincere sFC GORDON KILMER, President Kilmer Enterprises, Inc. mm GORDON KILMER CONCESSIONS Corona del Mar State Beach Box 772 Corona del Mar, Calif. 92625 (714) 673-3174 STATE OF CALIFORNIA — RESOURCES AGENCY PETE VALSON, Go w DEPARTMENT OF PARKS AND RECREATION _ Orange Coast District 18331 Enterprise Lane Huntington Beach, CA 92648 (714) 848 -1566 August 5, 1991 Mr. Gordan Kilmer, Owner Kilmer Enterprises Inc. 1843 Kimberly Place Newport Beach, CA 92660 Dear Gordan: Enclosed for your record are copies of the mid summer 1991 concession inspection. I am very pleased at the continued effort to present a top -notch beach stand. You are setting the standard for similar operations whether within City or State jurisdictions. Per our discussion regarding vending trucks (ice cream), the Chief Lifeguard is aware of the situation and is initiating steps to cease this activity. Your effort to advise park staff may still be necessary and would be most appreciated. Let's hope for summer before next year! Enclosure Sincerely, Jack B. Roggenbuck District Superintendent t ILA it A4 IDlc`Lil a a m Doom s t ti 's�vat9�• 0 0 October 28, 1991 Mayor Phil Sansone 215 Marguerite Avenue Corona del Mar, CA 92625 Dear Mr. Sansone: On November 12, your City Council agenda has the topic for your approval of concession stand bids at Corona Del Mar State Beach. The purpose of this letter is to sincerely request your support to vote in favor of TG, Inc. As a possible new vendor to the City of Newport Beach, as a resident of Newport and a long time beach goer, I have seen the quality of food decline, selections eliminated, always with higher and higher prices. After 20 years, these concession stands need new fresh management, new ideas, along with the strong desire of our company to provide beach users with better food, better selection, higher quality along with great service. By new ideas and new results, the City of Newport Beach will also prosper with newly added revenue. Please vote in favor of our Company TG, Inc. Sincerely, Terry Tuchman President JLG:jh ju Jack 1✓Griffits TG, Inc. P. O. Box 2025 -211 Tustin, California 92680 November 11, 1991 Mr. Ronald A. Whitley, Director Mayor & Council Members Parks, Beaches & Recreation City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92660 Dear Mr. Whitley: NOVCEIVE® �,1? 1991 Over the past week my associate and I have personally reviewed our ideas, goals and desire to be the new concessionaire at the Corona del Mar foods stands. During these conversations we have noted a concern by council members that possibly a 35 year background in the retail - restaurant business, catering, along with seasonal concessions at the Arizona State University might leave a question of experience. In our opinion, we are certainly experienced and capable; however, to add conviction to our desire we offer the following. Should your office or the City Council desire, we offer to post a $50,000 performance bond prior to the first year of operation payable to the City, should our performance not meet existing standards. We trust this guarantee will aid the council members to vote in our favor. Terry Tuchman Terry Tuchman (714) 832 -5262 Jack L. riffitts Jack L. Griffitts (714) 721 -0031 • "RECEIVED #qER AGENDA • PRINTED;" 932 EAST MAIN STREET MESA, ARIZONA 85203 PHONE: 964 -7881 Novemner ;+. 199i Newport Beach City Council Members Newport Beacn. Ca. The Matta Family has been in the fooa service business since 1953. Gloria Matta Tuchman and Terry Franklin Tuchman have taken an active part in the family owned business. not only with food services. but with financiai.matters as weii for the corporation. Dr. Terry Tuchman has a degree in business finance and marketing which makes his expertise very valuable to us. Tne Matta Family has a well known reputation for providing excellent f000 in Arizona, California and Texas. The family specializes in Mexican and 'American food. It is Is equipped to serve and cater iaroe or smail groups. The Mesa restaurant has a seating capacity of 500. The success of the family owned business is due to family participation in all aspects of the business. Manuel N. Matta Mary Lydia Matta Garza Owner Owner �ECEIV�D `. NO � „alt �K991 CITY Of ryEWPORi BEACH �� �� �� o Newoort Beach City Council U00 Newoort Blvd. NewPort Beach. Ca. 92658-8915 "RECEIVED AFTER AGENDA PRINTED:" 319 Iris Avenue Corona del Mar, CA November 12. 1991 � Dear Mayor Sansone & Council Members: Re: CUM Beach Concessioo/Gordop Kilmer We are interested in seeing Mr. Kilmer win the renewal bid frr the CDM beach concessions. One ooini that we would like to emphasize is that Mr. Kilmer makes it a oractice of hiring local boys and girls to work at the CdM stands. We are nersonallv aware of this o'actice because our oldest son works for Mr^ Kilmer. Matt has worked at the beach for the last two sun,mers` as has many of his Friends" Some of these johs are oassed through families. It is our understandino that Mr. Vilmer enjoys hirinq local vounqsters, treats them fairlv. gives them appropriate raises and is interested in their school activities. He even helps them net their hours around these activities" especially the CdM football players. We are very much impressed with Mr. Kilmer's hiring cractices and would like to see these continued. We do not feel that T&G out of Arizona would particularly care about pmploying our local youngsters. Another ooint we would like to wake is that these young workers for the most part: walk, ride skateboards m' bicycles to work therehv keeping additional cara off of our streets. Very truly "ours, ` Sand, Hic|/o!* �,- •KILMER ENTERPRISES, INC. • "RECEIV ER AGENDA Corona del Mar State Beach PRINTED.". c _ Boa , Calif. Corona del Mar C 92625 (7 14) 673 -3174 Ir 'r NOV B 1991 CITY j!y November 5, 1991 The Honorable Phil Sansone, Mayor Members of the City Council City of Newport Beach 3300 Newport Blvd. Newport Beach, California 92663 Re: Corona del Mar State -City Beach Concession Dear Mayor Sansone and Members of the City Council: As a follow up to my letter of October 31, 1991, it is my plan to implement the following concepts in the event the City Council decides to award the Corona del Mar City -State Beach Concession Agreement for the forthcoming term to Kilmer Enterprises, Inc.: 1..,.If agreeable with the City, purchase and set out round tables, umbrellas and chairs in each Snack Bar area for patrons to use. 2. Over the years, many food items have been experimented with to attempt to find new items appealing to the beach going public. we will continue that policy of adding new items to menu in an effort to maximize revenues. For example, chili in various methods of preparation, has been very well received at some other beach locations. Currently, Kilmer Enterprises, Inc. sells, in one form or another, over 150 items from firewood and lighter fluid to Dove Ice Cream Bars, Chipwich Sandwiches, batteries, film, beach and the normal menu items (hamburgers, fries, etc.). Over the years, many items have been experimented with to attempt to find new items appealing to the beach going public. 3. Designate one end of each of t1je Snack Bars for souve- nirs and display items such as tee - shirts, sand buckets, beach toys, towels, clothing, thongs, etc. 4. Repair worn pass out counters as well as the panels below same for a more professional look. This is normally a part of City maintenance responsibility, however, we are willing to undertake same in an effort to "dress up" the area prior to such maintenance by the City. 5. Completely renovate and paint the interiors of both Snack Bars to lighten them with brighter and more appeal- ing colors. This would include the redecoration at all locations with new displays and point of purchase posters to entice customers to rent or purchase items. a 6. In the rental facility near the fire rings, add equip- ment to accommodate large parties for catering and /or rental of said equipment directly to such parties. This equipment would include tables, chairs, umbrellas, tent like covers for large luncheon parties. 7. If agreeable with the City and particularly with the Breakers Drive Homeowners Association, provide food carts for use in public service areas 1 & 2. These carts could sell ice cream, ,churros, popcorn and other similar items. 8. Finally, continue our "basic business plan" which in- cludes a "satisfaction guaranteed" or money refunded (or product replaced) . In addition, the "basic business plan" emphasizes quality,,cleanliness and courtesy. Kilmer Enterprises, Inc. will commit to the above concepts. I believe that implementation of the above will help generate addi- tional revenues over and above current revenues, thereby increasing rental income to the City of Newport Beach. Sincerely GORDON KILMER, President Kilmer Enterprises, Inc. * KILMER ENTERPRISES, INC. Corona del Mar State Beach Box 772 Corona del Mar, Calif. 92625 (714) 673 -3174 November 12, 1991 The Honorable Phil Sansone, Mayor Members of the City Council City of Newport Beach 3300 Newport Blvd. Newport Beach, California 92663 Re: Corona del Mar State -City Beach Concession to "RECEIVED AFTER AGENDA PRINTED:" J - / PJ 1' 12 ?J)1 Dear Mayor Sansone and Members of the City Council: I am writing this letter to respond to some information that has been distributed to you in a memorandum dated November 6, 1991, from the other bidder which is under consideration by the City Council. This letter is necessary because of what I believe to be a flagrant attempt to mislead and confuse the issues and the City Council. At the outset, the above referred memorandum states that "Over the past five years, the revenue to the City from the concession stand has only increased approximately 2.75 %. (emphasis added). This is not true. The truth is that revenue to the Citv has increased 21% over the previous period and if you include the $50,000.00 bonus which Kilmer Enterprises, Inc. paid at the last renewal, revenue to the City has increased by 34 %. Attached to this letter is a chart which clearly indicates the steady increase in revenue to the city using calendar years. In addition, the memorandum makes some price comparisons which could be very misleading, and certainly have questionable relavance for you to make an intelligent decision. For instance, the hamburg- er price comparison with McDonald's is ridiculous. As I am sure the Council is aware, McDonald's works on volumes which are in the millions and therefore has lower prices. The comparison using the "Huntington Beach Concession" is for Huntington Beach City Beach (not Huntington State Beach) which has a substantially lower rent percentage paid to the City of Huntington Beach than the rent paid at Corona del Mar. Hamburger prices vary throughout the County. For instance, the hamburger price at one of the City's other properties, Ruby's, is $3.72 including tax. This is almost $1.00 more expensive than cur- rently charged by Kilmer Enterprises, Inc. The concession on Balboa Island near the ferry charges $2.75 each for their hamburgers. In pricing hamburgers, the operator must consider many things, includ- ing a factor for rent paid by the operator. The comparison of drinks is equally misleading. In order to have an accurate idea for comparisons, you need to compare "ounces" to "ounces" and not "medium" to "medium ". For instance, Kilmer's price for a 16 ounce drink is $1.25, including tax. The same 16 ounces sells for $1.05, at Ruby's. You cannot be certain as to how many ounces are referred to the memorandum in question for any of the comparisons recited. Finally, I think it needs to be said that, based on gross sales of $225,000., in the event the other bidder, because of lack of expe- rience, has only a ten percent (10 %) decline in gross revenues and Kilmer maintains sales at that level, the City would be faced with a decline in revenue in an amount equal to $4,252.00. If that decline was twenty percent (20 %) because of inexperience, the City's decline in rent would be $14,850. I again urge you to consider the qualifications of both of the companies under consideration. Clearly, despite the minimal differ- ence in percentage rent offered, the experience and know how of Kilmer Enterprises, Inc. can only lead you to the conclusion that Kilmer Enterprises, Inc. is the "Best Responsible Bidder" and deserving of your vote on Tuesday, November 12, 1991. Again, thank you for your consideration. Si:LW4601' GORDON KILMER, President Kilmer Enterprises, Inc. _ Kihner Enterprise Revenue paid to the city of Newport Beach (1979 -1990) 115000 105000 95000 O b V SV 85000 n 75000 66,095 65000 i V C O ICT Cr/ 76,967 Average revenue Over five years FOR - r 178,437 �IN © Bonus Gross revenue 79 80 81 82 83 84 85 86 67 86 89 90 Calendar year 103,099 Average revenue Over five years 108,930 107,989 %\ 102,787 \ \ r I I 98,673 I I// ♦ I I ... .... ... \ . \ 97,121 I'ii r `: I'/ / % /./ IIII .. `i ... `i I /// :. .`.` % .`i i . m ` % ` Z / © Bonus Gross revenue 79 80 81 82 83 84 85 86 67 86 89 90 Calendar year ti • • L / gyD CONCESSION AGREEMENT CORONA DEL MAR STATE AND CITY BEACH PARK THIS AGREEMENT, made and executed this 13th day of November , 1991, by and between the CITY OF NEWPORT BEACH, a municipal corporation, hereinafter referred to as "City," and Kilmer Enterprises , hereinafter referred to as "Concessionaire "; RECITALS A. City owns certain real property southerly of Ocean Boulevard in Corona del Mar and controls certain other real property under a lease from the State of California which together comprise the Corona del Mar State and City Beach Parks, hereinafter the "Park "; and B. The City Master Plan for the Development of the Corona del Plar State and City Beach Park provides for two public service areas at which concession facilities are to be available, which are designated as Public Service Areas No. 1 and 2. C. City finds it to be in the public interest and consistent with park uses to grant an exclusive right to operate the concession facilities as provided in this Agreement within Public Service Areas No. 1 and No. 2; and D. City invited proposals from prospective concessionaires and Corcessionaire was awarded the exclusive right to operate a con- cession business on Public Service Areas No. 1 and No. 2 as a result thereof; 0 0 NOW, THEREFORE, the parties agree: 1. Concession. (a) City hereby grants to Concessionaire the exclusive right, privilege and concession to conduct a business within the concession facilities on Public Service Areas No. 1 and No. 2 in the Park for the vending of light foods and sandwiches, soft drinks, coffee, ice cream or ice cream products, cigars, cigarettes and tobaccos, candies, chewing gum, suntan lotions, film, sunglasses, firewood, and small items of fishing tackle such as lines, hooks and weights, and for the rental of various items of beach equipment such as back rests, umbrellas, and surf - riders, and for the sale or rental of other items of similar nature usually sold or rented at a resort refreshment stand; the sales of which shall be subject to the prior written approval of the City Parks, Beaches and Recreation Director. Concessionaire shall not sell fishing gear such as poles, reels or gear containers. Concessionaire agrees to provide all necessary fixtures, goods, merchandise, labor and equipment required for the vending or renting of the above items or any other items permitted to be sold or rented. (b) City reserves the right to prohibit the use, display, sale or rental of any machine, item or article which it deems objection- able or beyond the scope of merchandise deemed necessary by City for proper service to the public. This includes but is not limited to the right to restrict or prohibit vending machines of all kinds and machines producing music or any other noise or sound. (c) Prices shall be fixed by Concessionaire, but must not be in excess of prevailing prices in the City of Newport Beach for similar products, and City reserves the right to establish and from time to time revise a schedule of maximum prices for any or all items sold or rented to the public by Concessionaire. All food and beverage (non alcoholic) products sold shall be of uniform high quality. 5' `J L_ Failure to maintain quality deemed satisfactory by City shall be deemed a breach of this Agreement. Unimpaired use of Public Service Areas No. 1 and No. 2 by the public is to be maintained throughout the term of this Agreement. (d) Concessionaire shall be subject to all state and local laws, rules and regulations and shall pay all taxes lawfully assessed prior to delinquency and shall obtain and display at all times a business license and all permits required by the appropriate county, city or state health authorities certifying that the premises occupied, the equipment, the products sold, and the method of selling meet all current regulations, including health regulations. (e) Concessionaire shall exonerate, indemnify and hold harm- less Lessor from and against, and shall defend City from and against, and shall assume full responsibility for, payment of all wages or salaries and all federal, state, and local taxes or contributions imposed or required under the Unemployment Insurance, Social Security, Income Tax, Workers Compensation laws, or other laws with respect to Concessionaire's employees engaged in the performance of Concessionaire's obligations under this Agreement. This Agreement may create a possessory interest in public property which is subject to taxation. In the event such interest is created, Concessionaire shall pay any and all taxes levied on such interest. Concessionaire shall pay any and all taxes upon personal property and improvements belonging to Concessionaire and upon its possessory interests, if any, and Concessionaire shall pay all sales and other taxes levied against the operation of the business. 2. Term (a) The term of this Agreement shall begin on the date of execution and shall end on December 31, 1996, both dates inclusive, unless terminated. -3- 0 0 (b) During the term of this Agreement, Concessionaire may remain open for business daily between the hours of 8:00 A.M. and 10:00 P.M. and shall be open for business on Saturdays, Sundays and holidays between Noon and 5:00 P.M. from October 1 to March 31 and every day from 10:00 A.M. to 6:00 P.M. from June 15 to September 30, all dates inclusive, during each year. Different dates and hours may be fixed by Concessionaire with the approval of the City. (c) During the term of this Agreement Concessionaire may remove any fixtures or equipment installed which in the judgment of Concessionaire are obsolete or worn out; provided, however, that any such fixtures or equipment so removed must be immediately replaced by Concessionaire with new fixtures or equipment of equal quality. 3. Concessionaire to Operate Business. Concessionaire agrees to assume the rights, privileges, and obligations granted by this Agreement and to operate the concession within the concession facilities in Public Service Areas No. 1 and No. 2 for the purposes and in the manner and according to the terms and conditions stated in this Agreement reserving to City the right of ingress and egress to inspect said Public Service Areas No. 1 and No. 2 as deemed necessary by City. Concessionaire understands that the volume of business to be done and the quantity of food, beverages and service to the public to be required are subject to fluctuation and depend upon season and the weather and other unpredictable factors. Notwithstanding the uncertainties involved, Concessionaire agrees to supply the demand as it arises and to maintain an adequate supply of labor, food, beverages and equipment to do so. -4- 0 0 4. Repairs. (a) Concessionaire agrees to continuously maintain and keep in good repair at his own expense the concession facilities on Public Service Areas No. 1 and No. 2, including but not limited to: interior partitions of the buildings, window frames, doors, interior painting, and repair and replacement of windows in the buildings. Concessionaire also agrees to maintain and keep in good repair all equipment and fixtures in said buildings. All such work shall be done to the satisfaction of City. If, after ten (10) days' written notice from City to do specific items of maintenance or repair as required herein, Concessionaire has failed to do so, City may do the thing or things specified and bill Con- cessionaire for the cost thereof. Concessionaire shall reimburse the City for such cost within fifteen (15) days after receiving the bill. (b) City will do normal maintenance and normal repair on the structure of the concession buildings, including the maintenance and repair of the roofs, exterior walls, and exterior painting. City shall have sole discretion as to when such repair, maintenance or painting is necessary. If exterior painting or repair to the structure, roof or exterior walls is required by an act or omission of Concessionaire, City shall cause the painting or repair to be done but Concessionaire shall pay for it. (c) Concessionaire shall not construct any additional buildings or make any structural changes, alterations or additions to the concession buildings without the prior written consent of City. 5. Utilities. Newport Beach water and sewerage is available in the Park at Public Service Areas No. 1 and No. 2. Concessionaire shall be entitled to water service and sewerage service under the same terms as any other occupant of premises in the City and shall pay the same fees, rate or rates as any other occupant. Concessionaire shall make arrangements for other utility services necessary to the conces- sion and shall promptly pay all charges for utilities when due. -5- 0 6 6. Concessionaire to Keep Area clean. (a) Concessionaire shall keep the interior and exterior of the buildings and all of the area within Public Service Areas No. 1 and No. 2 and in every direction within fifty (50) feet of Public Service Areas No. 1 and No. 2 clean and sanitary and free from rubbish, garbage and debris of every kind. Concessionaire shall furnish an adequate number of trash cans, approved by City as to type, color, condition and location, to service Public Service Areas No. 1 and No. 2 and the 50 foot area surrounding in such a manner that there shall always be adequate space to deposit rubbish, debris and garbage. The obligation of Concessionaire hereunder must be performed to the satisfaction of City. (b) City is currently providing garbage and refuse pickup service at said beach and at Public Service Area No. 1, but is not hereby obligated to continue said service. (c) Concessionaire need not provide beach cleaning in the Park outside the areas hereby obligated to keep clean. 7. Security Measures. Lessee hereby acknowledges that the rent payable to Lessor does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of Lessee, its employees and agents and invitees from acts of third parties. 8. Payments to City. From the beginning of this Agreement through December 31, 1996, Concessionaire shall pay to City forty five percent ( 45 %) of the monthly gross receipts from the sale of all salable items. Payment of the per- centages of gross receipts shall be made to City monthly on or before the twentieth day of the month following the month of operation. M 0 0 (b) The term "gross receipts," wherever used in this Agreement, is intended to and shall mean all monies, property or any other thing of value received by Concessionaire through the operation of the concession without any deduction or deductions; it being understood, however, that the term "gross receipts" shall not include any sales or excise taxes imposed by any governmental entity and collected by Concessionaire or deposits made with Concessionaire to guarantee the return of rental equipment which deposit is returned upon return of the equipment. (c) Concessionaire shall maintain and use cash registers for each and every sale or rental at each place where money is received for all sales of goods and rentals of equipment. All cash registers shall be equipped with continuous recording drums and tapes to record receipts from sales and rentals. Cash registers shall be kept locked and the totals shown thereon shall not be reset except in the presence of an authorized representative of City. Copies of all tape shall be retained by Concessionaire during the term of this agreement and for a period of two (2) years thereafter. If any dispute concerning the gross receipts exists at the end of two years, Concessionaire shall not destroy the tape or any part thereof without the written consent of City. Both the registers and the tapes shall be subject to inspection and review by City upon request at any time during business hours. City shall request inspection or review at such times as will not unnecessarily interfere with Concessionaire's business operation. (d) All payments shall be to the City at the office of the Director of Finance in the City Hall. 9. Posting of Rates and Prices, Advertising Signs, Trade Name (a) Concessionaire shall post rates and prices in Public Service Areas No. 1 and No. 2 at such places as may be designated by City. -7- 0 (b) All advertising matter to be published or circulated by or on behalf of Concessionaire shall be subject to approval in writing by City. Upon written request of City, all advertising matter shall thereafter be submitted to City for approval prior to publication or circulation. (c) Concessionaire shall not place or allow any signs, placards, or advertising matter to be placed or maintained on, or attached to, the concession buildings or elsewhere without the prior written consent of City. Signs shall be placed, maintained and attached in such manner as City prescribes. (d) Concessionaire shall not use any trade name, style or title in any way in the conduct of the business without the same having been approved by City in writing. Concessionaire shall protect and hold City harmless against all claims and actions arising from use of any name, style or title even though the same has received prior approval of City. 10. Beverage and Food Containers. (a) Concessionaire shall not sell drinks of any description in bottles, cans or breakable cups. All drinks shall be sold in paper, cardboard, or similar disposable type containers. All containers of food and beverage shall be subject to approval of City. Concessionaire shall immediately discontinue sale or use of any containers disapproved by City. (b) The consumption of alcoholic beverages in the Park is prohibited. Concessionaire shall not seek a license to sell alcoholic beverages. 0 11. Prohibition Aqainst Transfer. Concessionaire shall not assign, sublease, hypothecate, or transfer this Agreement or any interest therein directly or indirectly, by operation of law or otherwise, without the prior written consent of City; any attempt to do so without City's consent shall be null and void, and any assignee, sublessee, hypothecatee or transferree shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Concessionaire, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Concessionaire is a partnership or joint venturer or syndicate or cotenancy, which shall result in changing the control of Concessionaire, shall be construed as an assignment of this Agreement. Control means fifty (50) percent or more of the voting power of the corporation, partner- ship or other entity. 12. Nondiscrimination and Remedies. The Concessionaire and his employees shall not discriminate because of sex, race, color, religion, ancestry, national origin , physical handicap, medical condition or marital status against any person by refusing to furnish such person any accommoda- tion, facility, service or privilege offered to or enjoyed by the general public. Nor shall the Concessionaire or his employees publicize the accommodations, facilities, services or privileges in any manner that would directly or inferentially reflect upon or question the acceptability of the patronage of any person because of sex, color, religion, ancestry, national origin, physical handicap, medical condition or marital status, all subject to reasonable orders of the City. Concessionaire shall not discriminate against any employee or applicant for employment because of sex, race, color, religion, ancestry, national origin, physical handicap, medical condition or marital status, in accordance with the requirements of State and Federal Law. M 0 0 Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including interns and apprentices. The Concessionaire shall post in conspicuous places, available to employees and applicants for employment, notices to be provided by the State setting forth the provisions of this Fair Employ- ment Practices section. The Concessionaire shall permit access to his records of employment, employment advertisements, application forms, and other pertinent data and records by the State Fair Employment Practices Commission, or any other agency of the State of California designated by the awarding authority, for the purpose of investigation to ascertain compliance with the Fair Employment Practices section of this contract. The State or City may determine a willful violation of this section to have occurred upon receipt of a final judgment having that effect from a court in an action to which Concessionaire was a party, or upon receipt of a written notice from the Fair Employment Practices Commission that it has investigated and determined that the Concessionaire has violated the Fair Employment Practices Act and has issued an order, which has become final, or obtained an injunction under the provisions of the Fair Employment and Housing Act, Government Code 12900 et. seq. In such event, the State or City will have the right, at its option, to terminate this Agreement and any loss of revenue sustained by the State or City by reason thereof shall be borne and paid for by the Concessionaire. 13. Right of Termination. (a) In the event Concessionaire fails to make the payments to City at the time and in the manner required herein or operates the concession in an unlawful manner or breaches or violates any other term or condition of this Agreement, the City may at its option at any time, in addition to any other remedy it may have, terminate this Agreement by giving notice in writing of such termination to Concessionaire specifying the effective date of termination and thereupon take possession of the premises, including all City property and the buildings and all fixtures and equipment therein, and remove any and -10- all persons or property therefrom 0 Upon the date of termination fixed by City, Concessionaire shall give City possession of the concession facilities and the fixtures and equipment and turn the business over to City which shall thereafter operate the same or designate someone to do so, and all of Concessionaire's right hereunder except to the payment hereinafter provided, if any, shall terminate. Before termina- tion by reason of default on the part of Concessionaire with respect to any covenant, matter, or things on the part of Concessionaire to be kept, done or performed hereunder (other than making the payments required hereunder), City shall cause to be given to the Concessionaire a written notice specifying the particulars wherein Concessionaire is in default and demanding performance in accordance with the terms of this Agreement. If, within ten (10) days after such notice is given, the Concessionaire shall have fully complied therewith, or in good faith shall have commenced the work or act necessary to comply therewith and thenceforth shall diligently prosecute such work or act to completion, no termination by reason of such breach shall be declared hereunder, but, in the event of Concessionaire's failure to comply with such notice, the City may then declare and effect a termination by reason of the default therein specified. (b) In case City terminates this Agreement under the provisions of Paragraph 11, City may at its option, either at the time of termination or after the market value of the fixtures and equipment is fixed as herein provided, enforce its rights under any mortgage it may have on the fixtures and equipment or it may require Concessionaire to remove all fixtures and equipment used in the operation of the concession business or it may waive its rights under any such mortgage and pay Concessionaire eighty (80) percent of the market value thereof for said fixtures and equipment as of the effective date of termination, reduced, however, by any amount owed to City by Concessionaire under the terms of this Agreement and further reduced by any amount required to accomplish repair or maintenance which under this Agreement is the obligation of Concessionaire and further reduced by the amount of any lien on the fixtures and equipment _11_ �] and by any amount owned by Concessionaire, the payment of which is secured by a hypothecation of such fixtures and equipment or any part thereof. If required by City, Concessionaire shall remove all fixtures and equipment within thirty (30) days after being given notice to do so. Failure to remove all of the same within that time shall constitute abandonment of those remaining and the same shall thereupon become the property of the City and City may use them or dispose of them and retain the proceeds. Upon removal of any fixtures or equipment Concessionaire shall not damage the buildings or any part thereof and shall repair and paint all walls and floors when removal occurs. Such work must be done in a good workmanlike manner and the buildings must be left in condition to permit a concession business to operate without further repair or painting. The market value of the fixtures and equipment shall be determined by an appraisal board consisting of three (3) members appointed in the following manner. Within ten (10) days after the effective date of termination, City shall appoint one member of said Board, giving notice of such appointment to Concessionaire in writing. Within ten (10) days after the service of such notice, Concessionaire shall appoint a second member of said Board, giving notice of such appointment to City in writing. The two appraisers thus selected shall appoint a third appraiser within ten (10) days after the appointment of the second and the service of the notice of such appointment as required above. In the event of the failure to appoint any appraiser as set forth herein, either party may apply to the presiding judge of the Superior Court of the State of California in and for the County of Orange for the appointment of such appraiser. The appraisal board shall fix the market value of the fixtures and equipment used in the operation of the concession business within thirty (30) days after the appointment of the third appraiser or as soon as is possible to render a fair decision. The decision of the majority of the appraisal board shall be the decision of all. -12- i 0 14. City Right to Purchase. In addition to the right to terminate this Agreement under Paragraph 11, City has the option to terminate at any time upon giving not less than thirty (30) days' written notice to Concessionaire. This right to terminate is absolute and City need have no reason therefor. Upon the date of termination fixed by City in said written notice, Concessionaire shall give City possession of the concession facilities and turn the concession business over to City which shall thereafter operate the same or designate someone to do so, and all of Concessionaire's rights here- under, except the right to the payment hereinafter provided, if any, shall terminate. City shall within sixty (60) days after the date of termination pay to Concessionaire the market value of the equipment owned by Concessionaire and used in the operation of the business (excluding the equipment kept for rental purposes) fixed in the same manner as the market value of fixtures and equipment may be fixed upon termination under Paragraph 11 plus the following percentage of the "Concessionaire's Investment" according to the effective date of the termination, reduced, however, by any amount owned to City by Con- cessionaire under the terms of this Agreement and further reduced by any amount required to accomplish repair or maintenance which under this Agreement is the obligation of Concessionaire and further reduced by the amount of any lien on said fixtures or equipment and by any amount owned by Concessionaire, the payment of which is secured by a hypothecation of such fixtures and equipment or any part thereof; Termination Date Percentage Before April 1, 1992 100% April 1, 1992 to March 31, 1993 80 April 1, 1993 to March 31, 1994 60 April 1, 1994 to March 31, 1995 40 April 1, 1995 to March 31, 1996 20 April 1, 1996 to December 31, 1996 0 Upon City exercising this option and the payment of the sums herein provided, if any, by City to Concessionaire, Concessionaire's title to all such fixtures and equipment shall be automatically transferred to City. -13- • f If Concessionaire has no ownership interest in all or a portion of the fixtures or equipment, he shall, nevertheless, assign his right to possession and all other rights thereto to City upon the date of termination fixed by City. 15. Removal of Property. Upon expiration or termination of this Agreement, the Concessionaire shall within fifteen (15) days thereafter remove from the premises, or otherwise dispose of, in a manner satisfactory to City, all personal property belonging to Con- cessionaire, including the equipment kept for rental purposes. Should Concessionaire fail to remove or dispose of his property within fifteen (15) days as herein provided, City may at its election consider such property abandoned or may dispose of same at Concessionaire's expense. Upon expiration or termination hereof, except as specifically provided herein, Concessionaire shall leave the premises, buildings, fixtures and equipment except that kept for rental purposes in good condition and repair. Concessionaire shall not remove any fixtures or equipment used in the operation of the concession business, except that Concessionaire shall remove equipment kept for rental purposes and personal clothing, office supplies, office furniture, cash registers, and nothing else. Upon expiration of this Agreement Concessionaire's title to all fixtures and equipment which are not subject to removal by Concessionaire shall vest in the City and City shall have no obligation to pay Concessionaire for same. 16. Hold Harmless - Insurance. (a) Concessionaire agrees to release, and to protect and save harmless, City and State and their officers, agents and employees from any and all claims, loss or liability on account of injury, loss, or damage to persons or property suffered or sustained in, on, or about the premises or elsewhere by any person in any manner directly or indirectly arising by reason of the conduct of Concessionaire's business or the use of rental equipment, consumption of food or drink or the use or occupancy of the premises by Concessionaire or by any person claiming under Concessionaire. -14- 0 (b) Concessionaire shall, at all times during the term of this Agreement, maintain in full force and effect, with respect to this Agreement, a policy or policies of Public Liability and Property Damage Insurance with minimum limits of Five Hundred Thousand and No /100 Dollars ($500,000.00), One Million and No /100 Dollars ($1,000,000.00) Public Liability, with products liability, and at least Fifty Thousand and No /100 Dollars ($50,000.00) Property Damage Liability, naming the City and State and their officers, agents and employees, as additional insured. Said policy or policies shall contain an endorsement pro- viding that the insurance company shall not cancel such policy or policies without thirty (30) days' written notice to City and City and State are not liable for the payment of any premiums or assessments on the policy or policies. (c) The policy or policies shall be in a form satisfactory to City and certificates issued by the insuring company shall be sub- mitted to City concurrently with the execution of this Agreement. Certificates for any new or renewal policies effective during the term of this Agreement shall be submitted to City at least twenty (20) days prior to the effective date of such policy or policies. 17. Damage of Premises. In the event of destruction, loss, or damage by fire or other cause of any of the concession facilities in Public Service Areas No. 1 or No. 2 used by Concessionaire, the City shall not be obligated to replace such destroyed, lost or damaged property, or be liable to Concessionaire for any loss of use or damage by reason thereof. 18. Fire Insurance. Concessionaire agrees to maintain a fire insurance policy satisfactory to the City Attorney with extended cover- age on the fixtures and equipment used by Concessionaire, insuring the same to the full insurable value thereof. In the event of destruction, loss or damage, all proceeds from such insurance shall be deposited -15- 0 0 in a bank in the City of Newport Beach approved by City and used by Concessionaire only for the purpose of replacing, repairingand restoring the fixtures and equipment. Concessionaire shall begin the work within thirty (30) days after notice from the City to do so and complete the same as rapidly as possible. Should the cost of replacing, repairing and restoring such fixtures and equipment exceed the insurance proceeds, Concessionaire shall pay the remainder of such cost. Nothwithstanding the interruption of the business of Concessionaire while the work is being done, this Agreement shall continue in effect. If the buildings are destroyed or substantially damaged and the City gives written notice to Concessionaire that City does not intend to restore the buildings, or if one year has passed and the City has not restored the buildings, Concessionaire may elect to restore the buildings to the satisfaction of City and then restore, repair or replace the damaged fixtures and equipment and continue the concession business or may treat this contract at an end and withdraw any insurance proceeds from his insurance which were previously deposited as required herein. Fire insurance must be for an amount equal to ninety percent (90 %) of the full replacement cost and /or value of the improve- ments on the property. 19. Workmen's Compensation Insurance. Concessionaire shall maintain Worker's Compensation Insurance for all his employees. Proof of Worker's Compensation coverage shall be submitted to City. 20. Insurance Policies Filed. Concessionaire shall place the policies of all insurance required by this Agreement or duplicates thereof or certificates evidencing the same on file with City. 21. Books of Account. Concessionaire agrees to keep books of account in connection with the operation of said concessions in a manner satisfactory to City, which books shall be open at all times to -16- City for the purpose of inspection portion thereof at the beginning or different reporting period has been shall submit within forty -five (45) period such financial statements of by City. 22. Notices. )r audit. For each calendar year or end of the Agreement, unless a approved by City, Concessionaire days after the close of the reporting his operations as may be requested (a) All notices herein provided to be given, or which may be given, by either party to the other, shall be deemed to have been fully given when made in writing and deposited in the United States mail at Newport Beach, California, certified and postage paid, and addressed as follows: To the Concessionaire at: Kilmer Enterprises, Inc. P.O. Box 772 Corona del Mar, CA. 92625 and to the City at: City of Newport Beach Attention: Parks, Beaches and Recreation Director 3300 Newport Blvd., P.O. Box 1768 Newport Beach, CA. 92659 -1768 (b) The address to which the notices shall or may be mailed as aforesaid by either party shall or may be changed by written notice, given by such party to the other, as hereinbefore provided, but nothing herein contained shall preclude the giving of any such notice by personal service. 23. Title to Real Property. Concessionaire hereby acknowledges the title of the State of California and the City of Newport Beach to the land comprising Corona del Mar State and City Beach Park and agrees never to assail or contest that title. Concessionaire is not being granted any right, title or interest in or to the land or any part thereof by this Agreement. -17- 24. Contractual Rights Only. The parties agree that Con- cessionaire is not a lessee or tenant of the premises or any part thereof and that the only rights of Concessionaire are those provided in this Agreement. Should Concessionaire be deemed a lessee or tenant, Con- cessionaire hereby specifically waives all rights under Section 1942 of the Civil Code of the State of California. 25. Administration of Contract. For the purposes of the administration of this contract, "City" shall mean the City Manager or an officer or employee of the City of Newport Beach authorized by him to administer the contract. If Concessionaire is dissatisfied with any action or decision of the City, Concessionaire may appeal any action or decision to the City Council for review within fifteen (15) days of the action or decision. A decision by the City Council is final. 26. Limited Waiver. No waiver by City of any term or condition of this Agreement or of any breach thereof by Concessionaire shall constitute a waiver of any other term or condition or of any other or future breach. 27. Automatic Termination. Should any person other than Con- cessionaire secure possession of Public Service Areas No. 1 or No. 2 or of any part thereof or secure any rights under this contract by a writ of attachment or execution or by any voluntary or involuntary assignment or by any petition, receivership or proceedings in bankruptcy or any other operation of law whatsoever, and remain in possession or maintain any right or rights for a period of five (5) days, this Agreement shall automatically terminate without any action on part of City, and City may enter and take possession of the premises, buildings and fixtures and remove all persons and property therefrom notwithstanding any other pro- visions of law or of this Agreement. 28. State Approval. It is mutually understood that this Agreement must be submitted to the Department of Parks and Recreation of the State of California for approval and is not effective until such approval. 29. Parkin_qjot. Concessionaire understands and agrees that City is to operate the parking lot at the Park and may increase or decrease the size thereof in the sole discretion of City. City shall determine the times of operation of the lot and may close the same at any time it deems necessary or convenient. All revenue from the lot belongs to City. It is agreed that City will allocate and designate the location of parking spaces deemed necessary by City to serve Concessionaire and employees of Concessionaire without charge therefor. The number of spaces allocated without charge shall not exceed five (5). 30. Business Use Only. The buildings used hereunder by Concessionaire are for business use only and neither Concessionaire nor any employee or agent of Concessionaire shall reside in such buildings or in Public Service Areas No. 1 or No. 2. 31. Prompt Performance Required. Time is of the essence of this Agreement. 32. If any action, in law or equity, is necessary to enforce any provision, term of condition of this Agreement, the prevailing party shall be entitled to receive all cost and expenses, including attorneys fees in such amount as the court may order. 33. This Agreement represents the full and complete understanding of all terms and conditions between the parties hereto and all negotiations and agreements are merged herein. Any modifica- tion of this Agreement will be effective only by a written mod- ification signed by both City and Concessionaire. -19- IN WITNESS WHEREOF the parties have executed this Agreement as of the date first above written. essionaire CITY OF NEWPORT BEACH Mayor ED AS TO FORM: :orney Attest: \V PC) r City Clerk APPROVED by Department of Parks and Recreation of the State of California, this —_.A— day of laz--e , 1991. By: RESOLUTION NO. 86 -12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AWARDING A CONTRACT TO KILMER ENTERPRISES, INC. FOR THE OPERATION OF THE TWO FOOD CONCESSIONS AT THE CORONA DEL MAR STATE AND CITY BEACH PARK. WHEREAS, pursuant to the notice inviting bids for the operation of the concessions at Corona del Mar State and City Beach, and in accordance with the specifications heretofore adopted, bids were received on the 16th day of September, 1985, and publicly opened and declared; and WHEREAS, it appears that Kilmer Enterprises, Inc. is the most responsible bidder; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that the bid of Kilmer Enterprises, Inc. for the operation of the two food and beach equipment rental concessions located at Corona del Mar State and City Beach Park be accepted. BE IT FURTHER RESOLVED that the Mayor and City Clerk are hereby authorized and directed to execute a contract in accordance with the specifications, bid and this award on behalf of the City of Newport Beach, and the City Clerk is hereby directed to furnish an executed copy to the successful bidder. ADOPTED this 10th day of February , 1986. ATTEST: C�`iCp •� • City Clerk t CITY OF NEWPORT BEACH ( 92 6 Parks, Beaches and Recreation Department BY TiiECi3a1,00Cii CITY OF NEWPORT BEACH February 10, 1986 FEB 10 198E CITY COUNCIL AGENDA y. ., ITEM N0. F ,V-6 TO: Mayor and City Council FROM: Parks, Beaches and Recreation Director SUBJECT: RESOLUTION AUTHORIZING AGREEMENT FOR THE OPERATION OF CORONA DEL MAR CONCESSION BY KILMER ENTERPRISES Recommendation: Adopt Resolution No. authorizing the agreement of the Corona del Mar Food Concession to be operated by Kilmer Enterprises. nitniiccinn- On October 15, 1985 the City Council approved a recommendation authorizing an agreement with Kilmer Enterprises to operate the food concession at Corona del Mar State and City Beach Park for the period of January 1, 1986 to December 31, 1990. The State of California has informed us that in addition to the execution of the agreement their procedures require a Resolution to be adopted by local legislative bodies. Therefore, the attached Resolution will comply with their request and complete this matter. r 6 0 TO: FINANCE DIRECTOR FROM: CITY CLERK DATE: April 25, 1986 CITY OF NEWPORT BEACH OFFICE OF THE CITY CLERK (714) 640 -2251 SUBJECT: Contract No. C -1920 , ( -er Description of Contract Concession Agreement (Corona del Mar State and City Beach Park) Effective date of Contract October 17, 1985 Authorized by Minute Action, approved on October 15, 1985 Contract with Kilmer Enterprises Address 1843 Port Kimberly Place Newport Beach, CA 92660 Amount of Contract (See Agreement) /" c Wanda E. Andersen City Clerk WEA:lr attach. City Hall • 3300 Newport Boulevard, Newport Beach, California 92663 CONCESSION AGREEMENT CORONA DEL MAR STATE AND CITY BEACH PARK THIS AGREEMENT, made and executed this 17th day of October , 1995, by and between the CITY OF NEWPORT BEACH, a municipal corporation, hereinafter referred to as "City," and Kilmer Enterprises hereinafter referred to as "Concessionaire "; RECITALS A. City owns certain real property southerly of Ocean Boulevard in Corona del Mar and controls certain other real property under a lease from the State of California which together comprise the Corona del Mar State and City Beach Park; and B. The City Master Plan for the Development of the Corona del Mar State and City Beach Park provides for two public service areas at which concession facilities are to be available, which are designated as Public Service Areas No. 1 and 2. C. City finds it to be in the public interest and consistent with park uses to grant an exclusive right to operate a concession business as herein provided in the buildings on said Public Service Areas No. 1 and No. 2; and D. City invited proposals from prospective concessionaires and Concessionaire was awarded the exclusive right to operate said concession business on Public Service Areas No. 1 and No. 2 as a result thereof; i -1- NOW, T EREFORE, the parties agree: 1. Concession. (a) City hereby grants to Concessionaire the exclusive right, privilege and concession to conduct a business within the buildings on said Public Service Areas No. 1 and No. 2 in said park for the vending of light foods and sandwiches, soft drinks, coffee, ice cream or ice cream products, cigars, cigarettes and tobaccos, candies, chewing gum, suntan lotions, film, sunglasses, firewood, and small items of fishing tackle such as lines, hooks and weights, and for the rental of various items of beach equipment such as back rests, umbrellas, and surf-riders, and for the sale or rental of other items of similar nature usually sold or rented at a resort refreshment stand; the sales of which items shall be subject to the prior written approval of the City Parks, Beaches and Recreation Director. Concessionaire shall not sell fishing gear such as poles, reels or gear containers. Concessionaire agrees to provide all necessary fixtures, goods, merchandise, labor and equipment required for the vending or renting of the above items or any other items permitted to be sold or rented. (b) City reserves the right to prohibit the use, display, sale or rental of any machine, item or article which it deems objectionable or beyond the scope of merchandise deemed necessary by City for proper service to the public. This includes but is not limited to the right to restrict or prohibit vending machines of all kinds and machines producing music or any other noise or sound. Prices shall be fixed by Concessionaire, but must not be in excess of prevailing prices in the City of Newport Beach for similar products, and City reserves the right to establish and from time to time revise a schedule of maximum prices for any or all items sold or rented to the public by Concessionaire. All food and beverage (non alcoholic) products sold shall be of uniform high quality. Failure to maintain -2- J 0 0 quality deemed satisfactory by City shall be deemed a breach of this agreement. UnimpAired use of Public Service Areas No. 1 and No. 2 by the public is to be,maintained throughout the term of the concession agreement. (c) Concessionaire shall be subject to all state and local laws, rules and regulations and shall pay all taxes lawfully assessed prior to delinquency and shall obtain and display at all times a business license and all permits required by the appropriate county, city or state health authorities certifying that the premises occupied, the equipment, the products sold, and the method of selling meet all current regulations, including health regulations. (d) Concessionaire shall exonerate, indemnify, and hold harm- less Lessor from and against, and shall defend City from and against, and shall assume full responsibility for, payment of all wages or salaries and all federal, state, and local taxes or contributions imposed or required under the Unemployment Insurance, Social Security, Income Tax, Workers Compensation laws, or other laws with respect to Concessionaire's employees engaged in the performance of Concessionaire's obligations hereunder. This Concession Agreement may create a possessory interest in public property which is subject to taxation. In the event such interest is created, Concessionaire shall pay any and all taxes levied on such interest. Concessionaire shall pay any and all taxes upon personal property and improvements belonging to said Concessionaire and upon its possessory interests, if any, and Concessionaire shall pay all sales and other taxes levied against the operation of said business. 2. Term. (a) The term of this agreement shall begin on the date of execution and shall end on December 31, 1990, both dates inclusive, v' unless terminated prior thereto as provided herein. 3- 0 (b) During the term of this agreement, Concessionaire may remain open for b \ us daily after 8:00 a.m. and before 10:00 p.m. and shall be open for business on Saturdays, Sundays and holidays between noon and 5:00 p.m, from October 1 to March 31 and every day from 10:00 a.m. to 6:00 p.m. from June 15 to September 30, all dates inclusive, during each year. Different dates and hours may be fixed by Concessionaire with the approval of the City. (c) At the end of the term of this agreement or any extension thereof, if all payments required herein have been completed and all obligations performed by Concessionaire, the obligation of the mortgage shall be deemed satisfied and the mortgage shall be discharged and of no further effect. Concessionaire may remove any fixtures or equipment installed in accordance with the requirements hereof which in the judgment of Concessionaire are obsolete or worn out; provided, however, that any such fixtures or equipment so removed must be immediately replaced by Concessionaire with new fixtures or equipment of equal quality which shall also be subject to the chattel mortgage provided for herein. 3. Concessionaire to Operate Business. Concessionaire agrees to assume said right, privilege, and concession hereby granted and to operate said concession within said buildings in Public Service Areas No. 1 and No. 2 for the purposes and in the manner and according to the terms and conditions herein stated, reserving, however, to City the right of ingress and egress to inspect said Public Service Areas No. 1 and No. 2 and all buildings, equipment and fixtures thereon, as deemed necessary by City. In accepting the concession hereby granted, Concessionaire understands that the volume of business to be done and the quantity of food, beverages and service to the public to be required are subject to fluctuation and depend upon season and the weather and other unpredict- able factors. -Notwithstanding the uncertainties involved, Concessionaire agrees to supply the demand as it arises and to maintain an adequate supply of labor, food, beverages and equipment to do so. % -4- 0 0 4. Repairs. (a) Concessionaire agrees to continuously maintain and keep'�in good repair at his own expense the concession buildings on Public Service Areas No. 1 and No. 2 and every part thereof except that which City hereinafter agrees to maintain. Concessionaire's obligation includes but is not limited to interior partitions of the buildings, window frames, doors, interior painting, and repair and replacement of windows in the buildings. If exterior painting or repair to the structure, roof or exterior walls is required by an act or omission of Concessionaire, City shall cause the painting or repair to be done but Concessionaire shall pay for it. Concessionaire also agrees to maintain and keep in good repair all equipment and fixtures in said buildings. All such work shall be done to the satisfac- tion of City. If, after ten (10) days'.written notice from City to do specific items of maintenance or repair as required herein, Concessionaire has failed to do so, City may do the thing or things specified and bill Concessionaire for the cost thereof. Concessionaire shall reimburse the City for such cost within fifteen (15) days after receiving the bill. (b) City will do normal maintenance and normal repair on the structure of said buildings, including the maintenance and repair of the roofs, exterior walls, and exterior painting. City shall have sole discretion as to when such repair, maintenance or painting is necessary. (c) Concessionaire shall not construct any additional buildings or make any structural changes, alterations or additions to any buildings in said area without the prior written consent of City. 5. Utilities. Newport Beach water and sewerage is available in the park at Public Service Areas No. 1 and No. 2. Concessionaire shall be entitled to water service and sewerage service under the same terms as any other occupant of premises in the City and shall pay the same fees, rate or rates as any other occupant. Concessionaire shall make arrangements for other utility services at said area and shall promptly pay all charges for utilities when due. -5- • • 6. Concessionaire to Keep Area Clean. (a) Concessionaire shall keep the in and exterior of the buildings and all of the area within Public \Service Areas No. 1 and No. 2 and in every direction within fifty (50) feet of said Public Service Areas No. 1 and No. 2 clean and sanitary and free from rubbish, garbage and debris of every kind. Concessionaire shall furnish an adequate number of trash cans, approved by City as to type, color, condition and location, to service Public Service Areas No. 1 and No. 2 and the 50 -foot area surrounding in such a manner that there shall always be adequate space to deposit rubbish, debris and garbage. The obligation of Concessionaire hereunder must be performed to the satisfaction of City. (b) City is currently providing garbage and refuse pickup service at said beach and at Public Service Area No. 1, but is not hereby obligated to continue said service. (c) Concessionaire need not provide beach cleaning in the park outside the areas he is hereby obligated to keep clean. 7. Security Measures. Lessee hereby acknowledges that the rental payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of Lessee, its employees and agents and invitees from acts of third parties. 8. Payments to City. (a) From the beginning of this agreement through December 31, 1990, Concessionaire shall pay to City a guaranteed minimum monthly payment of S 5.000.00 for the months of June, July, August and September or forty percent ( 40 %) of the monthly gross receipts from the sale of all salable items plus fifty percent ( 50' %) of the monthly gross receipts for these months from all rental items, whichever sum may be larger, plus the same percentages of gross receipts indicated above for any calendar month or portion thereof that said concession is operated prior or subsequent to June, July, August and September during each year of this part of the term of this agreement. Payment of the percentages of gross receipts shall be made to City monthly (� on or before the twentieth day of the month following the month of operation. I In the event the sum of the percentages of monthly gross receipts does not equal the guaranteed minimum monthly rental, in the months during which ffffl the guaranteed minimum is required, then Concessionaire shall pay to City said minimum monthly payment on or before the twentieth day of the month following the month of operation; provided, however, that if Concessionaire is prevented from operating said concession during a part of June, July, August or September, by any cause beyond his control, the required guaranteed minimum monthly payment shall be prorated in the ratio which the actual operating period bears to the full month for which said guaranteed monthly minimum is required. City shall be the sole judge as to whether the cause preventing operation is beyond control of Concessionaire. (b) The term "gross receipts," wherever used in this agreement, is intended to and shall mean all monies, property or any other thing of value received by Concessionaire through the operation of said concession, or from any other business or activity carried on upon said area or any portion thereof, or from any other use of said area or any portion thereof, or from any other use of said area or any portion thereof by Concessionaire, or others with his approval, without any deduction or deductions; it being understood, however, that the term "gross receipts" shall not include any sales or excise taxes imposed by any governmental entity and collected by Concessionaire or deposits made with Concessionaire to guarantee the return of rental equipment. (c) Concessionaire shall maintain and use cash registers for each and every sale or rental at each place where money is received for all sales of goods and rentals of equipment. All such cash registers shall be equipped with continuous recording drums and tapes to record receipts from sales and rentals. Such registers shall be kept lccked and the totals shown thereon shall not be reset except in the presence of an auth- orized representative of City. Copies of all tape shall be retained by Concessionaire during the term of this agreement and for a period of two (2) years thereafter. If any dispute exists at the end of such two years concerning gross receipts, Concessionaire shall not destroy such tape or any part thereof without the written consent of City. Both the registers and the tapes shall be subject to inspection and review by City upon request at any time during business hours. City shall request inspection or review at such times as will not unnecessarily interfere with Concessionaire's business operation. 0 7- 0 (d) All payments shall be to the City at the, office of the Director of Finance in the City Hall. 9. Posting of Rates and Prices, Advertising Signs, Trade Name. (a) Concessionaire shall post rates and prices in Public Service Areas No. 1 and No. 2 at such places as may be designated by City. (b) All advertising matter to be published or circulated by or on behalf of Concessionaire shall be subject to approval in writing by City. Upon written request having been made, all advertising matter shall thereafter be submitted to City for approval prior to publication or circulation. (c) Concessionaire shall not place or allow any signs, placards, or advertising matter to be placed or maintained on, or attached to, the buildings or elsewhere in said areas without the prior written consent of City, and such business signs shall be placed, maintained and attached in such manner as City prescribes prior to such placing. Any signs placed in said area shall be removed promptly upon request by City. (d) Concessionaire shall not use any trade name, style or title in any way in the conduct of the business without the same having been approved by City in writing. Concessionaire shall protect and hold City harmless against all claims and actions arising from use of any name, style or title even though the same has received prior approval of City. 10. Beverage and Food Containers. (a) Concessionaire shall not sell drinks of any description in bottles, cans or breakable cups. All drinks shall be sold in paper, cardboard, or similar disposable type containers. All containers of food and beverage shall be subject to approval of City. Concessionaire shall immediately discontinue sale or use of any containers disapproved by City. (b) The consumption of alcoholic beverages in the park is prohibited. Concessionaire shall not seek a license to sell alcoholic beverages therein. _ M -a- j f 0 0 11. Prohibition Against Transfer. Concessionaire shall not assign, sublease, 'bypothecate, or transfer this agreement or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City; any attempt to do so without said consent shall be null and void, and any assignee, sublessee, hypothecatee or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Concessionaire, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Concessionaire is a partnership or joint venturer or syndicate or cotenancy, which shall result in changing the control of Concessionaire, shall be construed as an assignment of this agreement. Control means fifty (50) percent or more of the voting power of the corporation. 12. Nondiscrimination and Remedies. The Concessionaire and his employees shall not discriminate because of sex, race, color, religion, ancestry or national origin against any person by refusing to furnish such person any accommodation, facility, service or privilege offered to or enjoyed by the general public. Nor shall the Concessionaire or his employees publicize the accommodations, facilities, services or privileges in any manner that would directly or inferentially reflect upon or question the acceptability of the patronage of any person because of sex, race, color, religion, ancestry or national origin, all subject to reasonable orders of the City. , In the performance of this agreement, the Concessionaire shall not discriminate against any employee or applicant for employment because of sex, race, color, religion, ancestry or national origin. The Concessionaire will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex, race, religion, color, ancestry, or national origin. Such action shall include, but not be limited to, the following; employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Concessionaire shall post I -9- i 0 0 in conspicuous places, available to employees and applicants for employment, notices to be provided by the State setting forth the provisions of thi\\Fair Employment Practices section. The Concessionaire shall permit access to his records of employment, employment advertisements, application forms, and other pertinent data and records by the State Fair Employment Practices Commission, or any other agency of the State of California designated by the awarding authority, for the purpose of investigation to ascertain compliance with the Fair Employment Practices section of this contract. The State or City may determine a willful violation of this section to have occurred upon receipt of a final judgment having that effect from a court in an action to which Concessionaire was a party, or upon receipt of a written notice from the Fair Employment Practices Commission that it has investigated and determined that the Concessionaire has violated the Fair Employment Practices Act and has issued an order, under Labor Code Section 1426, which has become final, or obtained an injunction under Labor Code Section 1429. In such event, the State or City will have the right, at its option, to terminate this agreement, and any loss of revenue sustained by the State or City by reason thereof shall be borne and paid for by the Concessionaire. 13. Right of Termination. (a) In the event Concessionaire fails to make the payments to City at the time and in the manner required herein or operates the concession in an unlawful manner or breaches or violates any other term or condition of this agreement, the City may at its option at any time, in addition to any other remedy it may have, terminate this agreement by giving notice in writing of such termination to Concessionaire specifying the effective date of termination and thereupon take possession of the premises, including all City property and the buildings and all fixtures and equipment therein, and remove any and 13 -10- all persons or property therefrom. Upon the date of termination fixed by City, Concessionaire shall give City possession of the buildings and the fixtures and equipment and turn the business over to City which shall thereafter operate the same or designate someone to do so, and all of Concessionaire's right hereunder except to the payment hereinafter pro- . vided, if any, shall terminate. Before termination by reason of default on the part of Concessionaire with respect to any covenant, matter, or things on the part of Concessionaire to be kept, done or performed here- under (other than making the payments required hereunder), City shall cause to be given to the Concessionaire a written notice specifying the particulars wherein Concessionaire is in default and demanding performance in accordance with the terms of this agreement. If, within ten (10) days after such notice is given, the Concessionaire shall have fully complied therewith, or in good faith shall have commenced the work or act necessary to comply therewith and thenceforth shall diligently prosecute such work or act to completion, no termination by reason of such breach shall be declared hereunder, but, in the event of Concessionaire's failure to comply with such notice, the City may then declare and effect a termination by reason of the default therein specified. (b) In case City terminates this agreement under the provisions of paragraph 11, City may at its option, either at the time of termination or after the market value of the fixtures and equipment is fixed as herein provided, enforce its rights under any mortgage it may have on the fixtures and equipment or it may require Concessionaire to remove all fixtures and equipment used in the operation of the concession business or it may waive its rights under any such mortgage and pay Concessionaire eighty percent (80%) of the market value thereof for said fixtures and equipment as of the effective date of termination, reduced, however, by any amount owed to City by Concessionaire under the terms of this agreement and further reduced by any amount required to accomplish repair or maintenance which under this agreement is the obligation of Concessionaire and further reduced by the amount of any lien on the fixtures and equipment -il- and by any amou n� owned by Concessionaire, the payment of which is secured by a hypothecation of such fixtures and equipment or any part thereof. If required by City, Concessionaire shall remove all fixtures and equipment within thirty (30) days after being given notice to do so. Failure to remove all of the same within that time shall constitute abandonment of those remaining and the same shall thereupon become the property of the City and City may use them or dispose of them and retain the proceeds. Upon removal of any fixtures or equipment Concessionaire shall not damage the buildings or any part thereof and shall repair and paint all walls and floors when removal occurs. Such work must be done in a good workmanlike manner and the buildings must be left in condition to permit a concession business to operate without further repair or painting. Said market value shall be determined by an appraisal board consisting of three (3) members appointed in the following manner. Within ten (10) days after the effective date of termination, City shall appoint one member of said board, giving notice of such appointment to Concessionaire in writing. Within ten (10) days after the service of such notice, Concessionaire shall appoint a second member of said board, giving notice of such appointment to City in writing. The two appraisers thus selected shall appoint a third appraiser within ten (10) days after the appointment of the second and the service of the notice of such appointment as required above. In the event of the failure to appoint any appraiser as set forth herein, either party may apply to the presiding judge of the Superior Court of the State of California in and for the County of Orange for the appointment of such appraiser. The appraisal board shall fix the market value of the fixtures and equipment used in the operation of the concession business within thirty (30) days after the appointment of the third appraiser or as soon as is possible to render a fair decision. The decision of the majority of the appraisal board shall be the decision of all. -12- 14. City Right to Purchase. In addition to the right to terminate this agreement under paragraph 11, City has the option to terminate at any mime upon giving not less than thirty (30) days' written notice to Concessionaire. This right to terminate is absolute and City need have no reason therefor. Upon the date of termination fixed by City in said written notice, Concessionaire shall give City possession of the buildings and the fixtures and equipment and turn the concession business over to City which shall thereafter operate the same or designate someone to do so, and all of Concessionaire's rights hereunder, except the right to the payment hereinafter provided, if any, shall terminate. City shall within sixty (60) days after the date of termination pay to Concessionaire the market value of the equipment owned by Concessionaire and used in the operation of the business (excluding the equipment kept for rental purposes) fixed in the same manner as the market value of fixtures and equipment may be fixed upon termination under paragraph it plus the following percentage of the "Concessionaire's Investment" according to the effective date of the termination, reduced, however, by any amount owned to City by Con- cessionaire under the terms of this agreement and further reduced by any amount required to accomplish repair or maintenance which under this agreement is the obligation of Concessionaire and further reduced by the amount of any lien on said fixtures or equipment and by any amount owned by Concessionaire, the payment of which is secured by a hypothe- cation of such fixtures and equipment or any part thereof; Upon City exercising this option and the payment of the sums herein provided, if any, by City to Concessionaire, Concessionaire's title to all such fixtures and equipment shall be automatically transferred to City. -13- 1 Termination Date Percentage Before April 1, 1986 100% April 1, 1986 to March 31, 1987 80 April 1, 1987 to March 31, 1988 60 April 1, 1988 to March 31, 1989 40 April 1, 1989 to March 31, 1990 20 April 1, 1990 to December 31, 1990 0 Upon City exercising this option and the payment of the sums herein provided, if any, by City to Concessionaire, Concessionaire's title to all such fixtures and equipment shall be automatically transferred to City. -13- 1 7 If Concessionaire has no ownership interest in all or a portion of the fixtures or gquipment, he shall, nevertheless, assign his right to possession and all other rights thereto to City upon the date of termination fixed by City. 15. Removal of Property. Upon expiration or termination of this agreement, the Concessionaire shall within fifteen (15) days thereafter remove from said premises, or otherwise dispose of, in a manner satisfactory to City, all personal property belonging to Con- cessionaire, including the equipment kept for rental purposes, located on said premises. Should Concessionaire fail to remove or dispose of his property within fifteen (15) days as herein provided, City may at its election consider such property abandoned or may dispose of same at Concessionaire's expense. Upon expiration or termination hereof, except as specifically provided herein, Concessionaire shall leave the premises, buildings, fixtures and equipment except that kept for rental purposes in good condition and repair. Concessionaire shall not remove any fixtures or equipment used in the operation of the concession business, except that Concessionaire shall remove equipment kept for rental purposes and personal property which includes vehicles, groceries, supplies, personal clothing, office supplies, office furniture, cash registers, and nothing else. Upon expiration of this agreement Concessionaire's title to all fixtures and equipment which are not subject to removal by Concessionaire shall vest in the City and City shall have no obligation to pay Concessionaire for same. 16• Hold Harmless - Insurance. (a) Concessionaire agrees to release, and to protect and save harmless, City and State and their officers, agents and employees from any and all claims, loss or liability on account of injury, loss, or damage to persons or property suffered or sustained in, on, or about the premises or elsewhere by any person whomso- ever in any manner directly or indirectly arising by reason of the conduct r of Concessionaire's business or the use of equipment, consumption of food or drink or the use or occupancy of said premises by Concessionaire or by any person claiming under Concessionaire. 11 -14 (b) Concessionaire shall, at all times during the term of this agreement, maintain in full force and effect, with respect to this agree- ment, a policy or policies of Public Liability and Property Damage Insur- ance with minimum limits of Five Hundred Thousand and No /100 Dollars ($500,000.00), One Million and No /100 Dollars ($1,000,000.00) Public Liability, with products liability, and at least Fifty Thousand and No /100 Dollars ($50,000.00) Property Damage Liability, naming the City and State and their officers, agents, and employees, as additional insured. Said policy or policies shall contain an endorsement_ providing that the in- surance company shall not cancel such policy or policies without thirty (30) days' written notice to City and City and State are not liable for the payment of any premiums or assessments on said policy or policies. (c) Said policy or policies shall be in a form satisfactory to City and certificates issued by the insuring company shall be sub- mitted to City concurrently with the execution of this agreement. Certificates for any new or renewal policies effective during the term of this agreement shall be submitted to City at least twenty (20) days prior to the effective date of such policy or policies. 17. Damage of Premises. In the event of destruction, loss, or damage by fire or other cause of any of the buildings, improvements, or fixtures in said Public Service Areas No. 1 or No. 2 used by Con- cessionaire, the City shall not be obligated to replace such destroyed, lost, or damaged property, or be liable to said Concessionaire for any loss of use or damage by reason thereof. 18. Fire Insurance. Concessionaire agrees to maintain a fire insurance policy satisfactory to the City Attorney with extended coverage on the fixtures and equipment used by Concessionaire, insuring the same to the full insurable value thereof. In the event of destruc- tion, loss or damage, all proceeds from such insurance shall be deposited (` -15 m in a bank in the 'City of Newport Beach approved by City and used by Con- cessionaire only for the purpose of replacing, repairing and restoring the fixtures and equipment. Concessionaire shall begin the work within thirty (30) days after notice from the City to do so and complete the sane as rapidly as possible. Should the cost of replacing, repairing and restoring such fixtures and equipment exceed the insurance proceeds, Concessionaire shall pay the remainder of such cost. Notwithstanding the interruption of the business of Concessionaire while the work is being done, this agreement shall continue in effect. If the buildings are destroyed or substantially damaged and the City gives written notice to Concessionaire that City does not intend to restore the buildings, or if one year has passed and the City has not restored the buildings, Concessionaire may elect to restore the buildings to the satisfaction of City and then restore, repair or replace the damaged fixtures and equipment and continue the concession business or may treat this contract at an end and withdraw any insurance proceeds from his insurance which were previously deposited as required herein. Fire insurance must be for an amount equal to ninety percent (90 %) of the full replacement cost and /or value of the im- provements on the property. 19. Workmen's Compensation Insurance. Concessionaire shall maintain Workmen's Compensation Insurance for all his employees. 20. Insurance Policies Filed. Concessionaire shall place the policies of all insurance required by this agreement or duplicates thereof or certificates evidencing the same an file with City. 21. Books of Account. Concessionaire agrees to keep books of account in connection with the operation of said concessions in a manner satisfactory to City, which books shall be open at all times to 1 9 -16- City for the purpose of inspection or audit. For each calendar year or Portion thereof at the beginning or end of the agreement, unless a different reporting period has been approved by City, Concessionaire shall submit within forty -five (45) days after the close of the reporting period such financial statements of his operations as may be requested by City. 22. Notices. (a) All notices herein provided to be given, or which may be given, by either party to the other, shall be deemed to have been fully given when made in writing and deposited in the United States mail at Newport Beach, California, certified and postage prepaid, and addressed as follows: To the Concessionare at: Kilmer Enterprises 1843 Port Kimberly Place Newport Beach, CA. 92660 and to the City at: City of Newport Beach Attention: Parks, Beaches and Recreation Director 3300 Newport Boulevard Newport Beach, California 92663 (b) The address to which the notices shall or may be mailed as aforesaid by either party shall or may be changed by written notice, given by such party to the other, as hereigbefore provided, but nothing herein contained shall preclude the giving of any such notice by personal service. 23. Title to Real Property. Concessionaire hereby acknowledges the title of the State of California and the City of Newport Beach to the land comprising Corona del Mar State and City Beach Park and agrees never i to assail or contest that title. Concessionaire is not being granted any right, title or interest in or to the land or any part thereof by this agreement. 0 -17- 0 24. C\ tractual Rights only. The parties agree that Concession- aire is not a lessee or tenant of the premises or any part thereof and that the only rights of Concessionaire are those provided in this agreement. Should Concessionaire be deemed a lessee or tenant, Concessionaire hereby specifically waives all rights under Section 1942 of the Civil Code of the State of California. 25. Administration of Contract. For the purposes of the admin- istration of this contract by the City, "City" shall mean the City Manager or an officer or employee of the City of Newport Beach authorized by him to administer the contract. If Concessionaire is dissatisfied with any action or decision of the City, Concessionaire may take the matter to the City Council for review. A decision by the City Council is final. 26. Limited Waiver. No waiver by City of any term or condition of the contract or of any breach thereof by Concessionaire shall constitute a waiver of any other term or condition or of any other or future breach. 27. Automatic Termination. Should any person other than Con- cessionaire secure possession of Public Service Areas No. 1 or No. 2 or of any part thereof or secure any rights under this contract by a writ of attachment or execution or by any voluntary or involuntary assignment or by any petition, receivership or proceedings in bankruptcy or any other operation of law whatsoever, and remain in possession or maintain any right or rights for a period of five (5) days, this agreement shall auto- . matically terminate without any action on part of City. and City may enter and take possession of the premises, buildings and fixtures and remove all persons and property therefrom notwithstanding any other provisions of law or of this agreement. 28. State Approval. It is mutually understood that this agreement must be submitted to the Department of Parks and Recreation of the State of California for approval and is not effective until such approval. A) -18 0 0 292, Telephone Booths. Space is provided on said Public Service Areas \ N. 1 and No. 2 for telephone booths. Concessionaire shall arrange to have coin operated telephones installed as necessary to serve the public. Concessionaire shall provide electricity to the booths and shall keep them clean. Any revenue to Concessionaire shall be included in his gross sales receipts. 30. Parking Lot. Concessionaire understands and agrees that City is to operate the parking lot at the Park and may increase or decrease the size thereof in the sole discretion of City. City shall determine the times of operation of the lot and may close the same at any time it deems necessary or convenient. All revenue from the lot belongs to City. It is agreed that City will allocate and designate the location of parking spaces deemed necessary by City to serve Concessionaire and employees of Concessionaire without charge therefor. The number of spaces allocated without charge shall not exceed five (5). 31. Business Use Only. The buildings used hereunder by Concessionaire are for business use only and neither Concessionaire nor any employee or agent of Concessionaire shall reside in such buildings or in Public Service Areas No. 1 or No. 2. 32. Prompt Performance Required. essence of this agreement. -19- Time is of the IN WITNESS WHEREOF the Parties have executed this agreement as of the date first above written. C ncessionaire CIT�-FINEWPORT BEACH APPROVED AS TO FORM: B Mayor i ty Attorney Attest: City Clerk APPROVED by Department of Parks and Recre Lion of the State of California, this �L�.e� day of L- 198 6 By _20_ �3 I _20_ �3 I 6 CITY OF NEWPORT BEACH Parks, Beaches and Recreation Department TO: Mayor and City Council FROM: Parks, Beaches and Recreation Director SUBJECT: CORONA DEL MAR BEACH CONCESSION AGREEMENT RECOMMENDATION: October 15, 1985 CITY COUNCIL AGENDA ITEM NO. BY THE CITY COUNCIL CITY OF NEWPORT REACH OCT 151 °35 Aii°Y40 `i' 0 Authorize the Mayor and City Clerk to execute an agreement with K Enterpx.i&es,to operate the concession at Corona del Mar State and City Beach Park for the period of January 1, 1986 to December 31, 1990. DISCUSSION: As authorized by the City Council on August 26, 1985, bid proposals were received from prospective operators and opened on September 16, 1985 at 2:30 P.M. by the City Clerk. The bids were reviewed in cooperation with the Finance Department and resulted in making the recommendation as presented. Kilmer Enterprises is the current operator of the food concession stands at the Corona del Mar Main Beach and has conducted business in a satisfactory manner at this location for the past fifteen (15) years. The cash bonus and the increased percentage of gross sales will result in an increased revenue projection for future years. The procedure and agreement have been reviewed and approved by the State of California Office of Economic and Fiscal Affairs. BID SUMMARY: 1. Kilmer Enterprises $5,000 /month June, July, August, September, or 40% of gross. 50% of monthly gross on all rental items. CASH BONUS - $50,000 2. David Ballard $10,000 /month June, July, August, September, or 35% of gross. 35% of monthly gross on all rental items. CASH BONUS - $15,000 3. James Teeter $5,000 /month June, July, August, September, 45% of monthly gross on all rental items. CASH BONUS - $10,000 Ronald Whitley or 35% of gross. • CITY OF NEWPORT BEACH . Parks, Beaches and Recreation Department BY THE CITY COUNCIL CITY OF NEWPORT BEACH August 26, 1985 AUG 2610,85 CITY COUNCIL AGENDA APPROVED ITEM NO. F 2 TO: Mayor and City Council FROM: Parks, Beaches and Recreation Director SUBJECT: CORONA DEL MAR BEACH CONCESSION BID PROPOSALS Recommendation: Approve the agreement for the concession operation at Corona del Mar State and City Beach Park and authorize the City Clerk to advertise for bid proposals from prospective operators to be opened at 2:30 P.M. on September 16, 1985. Discussion: The current agreement with Kilmer Enterprises to operate the food concessions at Corona del Mar State and City Beach expires on December 31, 1985. To enable a smooth operational transition it is desirable to pursue a public bid process during September and awarding of a contract in October. In accordance with State of California Public Resources Code Section 5080.33, it is necessary to obtain approval of the concession agreement from the State of California prior to the bid process. This approval was received on July 23, 1985 and is attached for informational purposes. The agreement is available in the City Council Conference Room for review purposes. The agreement has been amended to comply with current employment regulations. The staff looks forward to providing this food service to users of the Corona del Mar Beach through a private concession contractor. The revenue to the City is substantial in allowing the maintenance and operation of the area to be provided. STATE OF CALIFORNIA —THE RESOURCES AGEN* DEPARTMENT OF PARKS AND RECREATION P.O. BOX 2390 SACRAMENTO 95811 (916) 445 -9060 JU@ 231194 Mr. Ronald A. Whitley, Director City of Newport Beach Parks, Beaches and Recreation Department P. O. Box 1768 Newport Beach, CA 92658 -8915 Dear Mr. Whitley: GEORGE DEUKMEJIAN, Governor Thank you for the opportunity to review your draft five -year bid and agreement for the concession operation at Corona Del Mar State Beach. We would suggest that the words "from all salable items" be inserted after the words "gross receipts" on line 3 of item (1), page 2 of the proposal. Pursuant to Public Resources Code Section 5080.33, please accept this letter as your authority to proceed with this bid. Do not hesitate to contact me if you need assistance in this matter. Sincerely, Conrad De Castro, Chief Office of Economic and Fiscal Affairs Author. red 10 Pub!: /h Adverl-56- . _Ws '1 kinds including public notices by Decree Of the Superior Court of Orange County, California. Number A -6214, dared 29 September. 1961, and A- 24831, dated 11 June. 1963. STATE OF CALIFORNIA County of Orange co..•c D. mn .mam1 ,a .« m i ponr .nn 10 D. coWm� .a1n I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the Orange Coast DAILY PILOT, with which is combined the NEWS - PRESS, a newspaper of general circulation, printed and published in the City of Costa Mesa, County of Orange, State of California, and that a Notice of Invitinq Bids of which copy attached hereto is a true, and complete copy, was printed and published in the Costa Mesa, Newport Beach, Huntington Beach, Fountain Valley, Irvine, the South Coast communities and Laguna Beach issues of said newspaper for 1 time XZVrNeartbWMXaeka to wit the issue(s) of August 29 198 5 198_ 198, 198_ 198T I declare, under penalty of perjury, that the foregoing is true and correct. Executed on August 30 198 5 at Costa Mesa, California. if / Signature FOR NOTICE i NOTICE !INVITING am NOTICE '18 HEREBY GIVEN that the City of New- port Beach wR 4KOW hid r 1e, tact, no M. p.m. Bids wls In the City Clark's 'omptly at the WW date and 300 Newport For fEgen �Duch. ryVltl regarding troposst, contact toy, Director of actm and Rec- apartment ,p141 LRAGO ,CITY a". OF -NEW. MR Id by the &SI 2 e Y . p� �\ CITY OF NEWPORT BEACH CALIFORNIA City Hall 3300 W. Newport 81,d. Area Code 714 DATE Seytmber 22, 1977 TO: FINANCE DIRECTOR FROM: City Clerk SUBJECT: Contract No. 1420 Description of Contract rnrena dat tsar state 6 City Beach ConCeeelon Authorized by Resolution No. 905.9 , adopted on April 11, 1977 Effective date of Contract ►rey 3, gyp» Contract with xil,s Address care,.,. d.1 may State 6 City Beech Park p_e. Be: 772_ Carona del Mar, CA 92625 Amount of Contract g� eentract u s City Clerk 1, STATE OF CALIFORNIA —THE RESOURCES AGENCY EDMUND G. BROWN JR., Governor DEPARTMENT OF PARKS AND RECREATION P.O. BOX 1390 �m SACRAMENTO 95811 (916) 445 -9060 September 20, 1977 City Clerk City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Dear Sir: Enclosed are two (2) fully executed copies of the Concession Agreement between the City of Newport Beach and Kilmer Enterprises, Inc. at Corona del Mar. Thank you for your cooperation in this matter. Sincerely, M. Todd Neiger, Manager Concessions Section /�0'7 v ,Tv N�4oCA Igc GH, PI F,nSE RETURN TO CITY CLrRK CITY t!EWPORT EFA.CH, CAI-IF. 92663 CONCESSION AGREEMENT CORONA del MAR STATE AND CITY BEACH PARK THIS AGREEMENT, made and executed this 3,t�, day of 1977, by and between the CITY OF NEWPORT BEACH, a Ir municipal corporation, hereinafter referred to as "City ", and KILMER ENTERPRISES. INC. , hereinafter referred to as "Concessionaire "; RECITALS A. City owns certain real property southerly of Ocean Boulevard in Corona del Mar and controls certain other real property under a lease from the State of California which together comprise the Corona del Mar State and City Beach Park; and B. The City Master Plan for the Development of the Corona del Mar State and City Beach Park provides for two public service areas at which concession facilities are to be available, which are designated as Public Service Areas No. 1 and No. 2. C. City finds it to be in the public interest and consistent with park uses to grant an exclusive right to operate a concession business as herein provided in the buildings on said Public Service Areas No. 1 and No. 2; and D. City invited proposals from prospective concession- aires and Concessionaire was awarded the exclusive right to operate said concession business on Public Service Areas No. 1 and No. 2 as a result thereof; -1- 0 4 NOW, THEREFORE, the parties agree: 1. Concession. (a) City hereby grants to Concessionaire the exclusive right, privilege and concession to conduct a business within the buildings on said Public Service Areas No. 1 and No. 2 in said park for the vending of light foods and sandwiches, soft drinks, coffee, ice cream or ice cream products, cigars, cigarettes and tobaccos, candies, chewing gum, suntan lotions, film, sunglasses, firewood, and small items of fishing tackle such as lines, hooks and weights, and for the rental of various items of beach equipment such as back rests, umbrellas, and surf - riders, and for the sale or rental of other items of similar nature usually sold or rented at a resort refreshment stand; the sales of which items shall be subject to the prior written approval of the City Parks, Beaches and Recreation Director. Concessionaire shall not sell fishing gear such as poles, reels or gear containers. Concessionaire agrees to provide all necessary fixtures, goods, merchandise, labor and equipment required for the vending or renting of the above items or any other items permitted to be sold or rented. (b) City reserves the right to prohibit the use, display, sale or rental of any machine, item or article which it deems objectionable or beyond the scope of merchandise deemed necessary by City for proper service to the public. This includes but is not limited to the right to restrict or prohibit vending machines of all kinds and machines producing music or any other noise or sound. Prices shall be fixed by Concessionaire, but must not be in excess of prevailing prices in the City of Newport Beach for similar products, and City reserves the right to establish and from time to time revise a schedule of maximum prices for any or all items sold or rented to the public by Concessionaire. All food and beverage (non alcoholic) products sold shall be of uniform high quality -2- Failure to maintain a 9 quality deemed satisfactory by City shall be deemed a breach of this agreement. Unimpaired use of Public Service Areas No. 1 and No. 2 by the public is to be maintained throughout the term of the concession agreement. (c) Concessionaire shall be subject to all state and local laws, rules and regulations and shall pay all taxes lawfully assessed prior to delinquency and shall obtain and display at all times a business license and all permits required by the appropriate county, city or state health authorities certifying that the premises occupied, the equipment, the products sold, and the method of selling meet all current regulations, including health regulations. 2. Term. (a) The Term of this agreement shall begin on the date of termination of the existing Concession Agreement between City and Concessionaire dated March 10, 1970, and shall continue for a period of five (5) years, ending on December 31, 1985, unless terminated prior thereto as provided herein. (b) During the term of this agreement, Concessionaire may remain open for business daily after 8:00 a.m. and before 10:00 p.m. and shall be open for business on Saturdays, Sundays and holidays between noon and 5:00 p.m. from October 1 to March 31 and every day from 10:00 a.m. to 6:00 pim. from June 15 to September 30, all dates inclusive, during each year. Different dates and hours may be fixed by Concessionaire with the approval of the City. (c) At the end of the term of this agreement or any extension thereof, if all payments required herein have been completed and all obligations performed by Concessionaire, the obligation of the mortgage shall be deemed satisfied and the mortgage shall be discharged and of no further effect. Concessionaire may remove any fixtures or equipment installed in accordance with the requirements hereof which in the judg- ment of Concessionaire are obsolete or worn out; provided, however, that any such fixtures or equipment so removed must be immediately replaced -3- 9 0 by Concessionaire with new fixtures or equipment of equal quality which shall also be subject to the chattel mortgage provided for herein. 3. Concessionaire to Operate Business. Concessionaire agrees to assume said right, privilege, and concession hereby granted and to operate said concession within said buildings in Public Service Areas No. 1 and No. 2 for the purposes and in the manner and according to the terms and conditions herein stated, reserving, however, to City the right of ingress and egress to inspect said Public Service Areas No. 1 and No. 2 and all buildings, equipment and fixtures thereon, as deemed necessary by City. In accepting the concession hereby granted, Concessionaire understands that the volume of business to be done and the quantity of food, beverages and service to the public to be required are subject to fluctuation and depend upon season and the weather and other unpredict- able factors. Notwithstanding the uncertainties involved, Concessionaire agrees to supply the demand as it arises and to maintain an adequate supply of labor, food, beverages and equipment to do so. 4. Repairs. (a) Concessionaire agrees to continuously main- tain and keep in good repair at his own expense the concession buildings on Public Service Areas No. 1 and No. 2 and every part thereof except that which City hereinafter agrees to maintain. Concessionaire's obligation includes but is not limited to interior partitions of the buildings, window frames, doors, interior painting, and repair and replacement of windows in the buildings. If exterior painting or repair to the structure, roof or exterior walls is required by any act or omission of Concessionaire, City shall cause the painting or repair to be done but Concessionaire shall pay for it. Concessionaire also agrees to maintain and keep in good repair all equipment and fixtures in said buildings. All such work shall be done to the satisfaction of City. If, after ten (10) days' written notice from City to do specific items -4- a of maintenance or repair as required herein, Concessionaire has failed to do so, City may do the thing or things specified and bill Concession- aire for the cost thereof. Concessionaire shall reimburse the City for such cost within fifteen (15) days after receiving the bill. (b) City will do normal maintenance and normal repair on the structure of said buildings, including the maintenance and repair of the roofs, exterior walls, and exterior painting. City shall have sole discretion as to when such repair, maintenance or painting is necessary. (c) Concessionaire shall not construct any additional build- ings or make any structural changes, alterations or additions to any buildings in said area without the prior written consent of City. 5. Utilities. Newport Beach water and sewerage is available in the park at Public Service Areas No. 1 and No. 2. Concessionaire shall be entitled to water service and sewerage service under the same terms as any other occupant of premises in the City and shall pay the same fees, rate or rates as any other occupant. Concessionaire shall make arrangements for other utility services at said area and shall promptly pay all charges for utilities when due. 6. Concessionaire to Keep Area Clean. (a) Concessionaire shall keep the interior and exterior of the buildings and all of the area within Public Service Areas No. 1 and No. 2 and in every direction within fifty (50) feet of said Public Service Areas No. 1 and No. 2 clean and sanitary and free from rubbish, garbage and debris of every kind. Concessionaire shall furnish an adequate number of trash cans, approved by City as to type, color, condition and location, to service Public Service Areas No. 1 and No. 2 and the 50 -foot area surrounding in such a manner that there shall always be adequate space to deposit rubbish, debris and garbage. The obligation of Concessionaire hereunder must be performed to the satisfaction of City. (b) City is currently providing garbage and refuse pickup service at said beach and at Public Service Area No. 1, but is not hereby obligated to continue said service. -5- 0 a (c) Concessionaire need not provide beach cleaning in the park outside the areas he is hereby obligated to keep clean. 7. Payments to City. (a) From the beginning of this agreement through December 31, 1985, Concessionaire shall pay to City a guaranteed minimum monthly payment of $ 2,500. for the months of June, July, August and September or thirty -two percent ( 32 %) of the monthly gross receipts from the sale of all salable items Plus forty -two percent (_L2_%) of the monthly gross receipts for these months from all rental items, whichever sum may be larger, plus the same percentages of gross receipts indicated above for any calendar month or portion thereof that said concession is operated prior or subsequent to June, July, August and September during each year of this part of the term of this agreement. Payment of the percentages of gross receipts shall be made to City monthly on or before the twentieth day of the month following the month of operation. In the event the sum of the percentages of monthly gross receipts does not equal the guaranteed minimum monthly rental, in the months during which the guaranteed minimum is required, then Concessionaire shall pay to City said minimum monthly payment on or before the twentieth day of the month following the month of operation; provided, however, that if Concessionaire is prevented from operating said concession during a part of June, July, August or Septem- ber, by any cause beyond his control, the required guaranteed minimum monthly payment shall be prorated in the ratio which the actual operating period bears to the full month for which said guaranteed monthly minimum is required. City shall be the sole judge as to whether the cause pre- venting operation is beyond control of Concessionaire. (b) The term "gross receipts ", wherever used in this agreement, is intended to and shall mean all monies, property or any other thing of value received by Concessionaire through the operation of said concession, or from any other business or activity carried on upon said area or any am 0 • portion thereof, or from any other use of said area or any portion thereof, or from any other use of said area or any portion thereof by Concessionaire, or others with his approval, without any deduction or deductions; it being understood, however, that the term "gross receipts" shall not include any sales or excise taxes imposed by any governmental entity and collected by Concessionaire or deposits made with Concessionaire to guarantee the return of rental equipment. (c) Concessionaire shall maintain and use cash registers for each and every sale or rental at each place where money is re- ceived for all sales of goods and rentals of equipment. All such cash registers shall be equipped with continuous recording drums and tapes to record receipts from sales and rentals. Such registers shall be kept locked and the totals shown thereon shall not be re -set except in the presence of an authorized representative of City. Copies of all tape shall be retained by Concessionaire during the term of this agree- ment and for a period of two (2) years thereafter. If any dispute exists at the end of such two years concerning gross receipts, Concessionaire shall not destroy such tape or any part thereof without the written con- sent of City. Both the registers and the tapes shall be subject to inspection and review by City upon request at any time during business hours. City shall request inspection or review at such times as will not unnecessarily interfere with Concessionaire's business operation. (d) All payments shall be to the City at the office of the Director of Finance in the City Hall. 8. Posting of Rates and Prices, Advertising Signs, Trade Name. (a) Concessionaire shall post rates and prices in Public Service Areas No. 1 and No. 2 at such places as may be designated by City. (b) All advertising matter to be published or circulated by or on behalf of Concessionaire shall be subject to approval in writing by City. Upon written request having been made, all advertising matter -7- • • shall thereafter be submitted to City for approval prior to publication or circulation. (c) Concessionaire shall not place or allow any signs, placards, or advertising matter to be placed or maintained on, or attached to, the buildings or elsewhere in said areas without the prior written consent of City, and such business signs shall be placed, maintained and attached in such manner as City prescribes prior to such placing. Any signs placed in said area shall be removed promptly upon request by City. (d) Concessionaire shall not use any trade name, style or title in any way in the conduct of the business without the same having been approved by City in writing. Concessionaire shall protect and hold City harmless against all claims and actions arising from use of any name, style or title even though the same has received prior approval of City. 9. Beverage and Food Containers. (a) Concessionaire shall not sell drinks of any description in bottles, cans or breakable cups. All drinks shall be sold in paper, cardboard, or similar disposable type containers. All containers of food and beverage shall be subject to approval of City. Concessionaire shall immediately discontinue sale or use of any containers disapproved by City. (b) The consumption of alcoholic beverages in the park is prohibited. Concessionaire shall not seek a license to sell alcoholic beverages therein. 10. Written Approval of Assignment. Concessionaire shall not assign or sublet the rights or privileges granted under this concession agreement or any interest in this agreement without the prior written consent of City. Any manager of the consession or of any unit of the concession must be of high moral character and able to meet and deal with the public in an effective and inoffensive manner. No C� • 11. Right of Termination. (a) In the event Concessionaire fails to make the payments to City at the time and in the manner required herein or operates the concession in an unlawful manner or breaches or violates any other term or condition of this agreement, the City may at its option at any time, in addition to any other remedy it may have, terminate this agreement by giving notice in writing of such termination to Concessionaire specifying the effective date of termination and thereupon take possession of the premises, including all City property and the buildings and all fixtures and equipment therein, and remove any and all persons or property therefrom. Upon the date of termination fixed by City, Concessionaire shall give City possession of the buildings and the fixtures and equip- ment and turn the business over to City which shall thereafter operate the same or designate someone to do so, and all of Concessionaire's right hereunder except to the payment hereinafter provided, if any, shall terminate. Before termination by reason of default on the part of Concessionaire with repsect to any covenant, matter, or things on the part of Concessionaire to be kept, done or performed hereunder (other than making the payments required hereunder), City shall cause to be given to the Concessionaire a written notice specifying the particulars wherein Concessionaire is in default and demanding performance in accordance with the terms of this agreement. If, within ten (10) days after such notice is given, the Concessionaire shall have fully complied therewith, or in good faith shall have commenced the work or act necessary to comply therewith and thenceforth shall diligently prosecute such work or act to completion, no termination by reason of such breach shall be declared hereunder, but, in the event of Concessionaire's failure to comply with such notice, the City may then declare and effect a termination by reason of the default therein specified. (b) In case City terminates this agreement under the pro- visions of this paragraph 11, City may at its option, either at the 10 0 0 time of termination or after the market value of the fixtures and equip- ment is fixed as herein provided, enforce its rights under any mortgage it may have on the fixtures and equipment or it may require Concession- aire to remove all fixtures and equipment used in the operation of the concession business or it may waive its rights under any such mortgage and pay Concessionaire eighty percent (80 %) of the market value thereof for said fixtures and equipment as of the effective date of termination, reduced, however, by any amount owed to City by Concessionaire under the terms of this agreement and further reduced by any amount required to accomplish repair or maintenance which under this agreement is the obligation of Concessionaire and further reduced by the amount of any lien on the fixtures and equipment and by any amount owned by Concession- aire, the payment of which is secured by a hypothecation of such fix- tures and equipment or any part thereof. If required by City, Concession- aire shall remove all fixtures and equipment within thirty (30) days after being given notice to do so. Failure to remove all of the same within that time shall constitute abandonment of those remaining and the same shall thereupon become the property of the City and City may use them or dispose of them and retain the proceeds. Upon removal of any fixtures or equipment Concessionaire shall not damage the buildings or any part thereof and shall repair and paint all walls and floors when removal occurs. Such work must be done in a good workmanlike manner and the buildings must be left in condition to permit a concession business to operate without further repair or painting. Said market value shall be determined by an appraisal board consisting of three (3) members appointed in the following manner. Within ten (10) days after the effective date of termination, City all appoint one member of said board, giving notice of such appointment to Concessionaire in writing. Within ten (10) days after the service of such notice, Concessionaire shall appoint a second member of said board, giving notice of such -10- appointment to City in writing The two appraisers thus selected shall appoint a third appraiser within ten (10) days after the appointment of the second and the service of the notice of such appointment as required above. In the event of the failure to appoint any appraiser as set forth herein, either party may apply to the presiding judge of the Superior Court of the State of California in and for the County of Orange for the appointment of such appraiser. The appraisal board shall fix the market value of the fixtures and equipment used in the operation of the concession business within thirty (30) days after the appointment of the third appraiser or as soon as is possible to render a fair decision. The decision of the majority of the appraisal board shall be the decision of all. Upon payment of the sum herein provided, if any, by City to Concessionaire, Concessionaire's title to all such fixtures and equip- ment shall be automatically transferred to City. If Concessionaire has no ownership interest in the fixtures and equipment, he shall, neverthe- less, at the request of City assign his right to possession and all other rights thereto to City upon the date of termination fixed by City. The term "fixtures and equipment" as used here does not include equip- ment kept for rental purposes. Such equipment shall, upon termination, be removed in accordance with paragraph 13 hereof. 12. City Right to Purchase. In addition to the right to terminate this agreement under paragraph 11, City has the option to terminate at any time upon giving not less than thirty (30) days' written notice to Concessionaire. This right to terminate is absolute and City need have no reason therefor. Upon the date of termination fixed by City in said written notice, Concessionaire shall give City possession of the buildings and the fixtures and equipment and turn the concession business over to City which shall thereafter operate the same or designate someone to do so, and all of Concessionaire's rights -11- 0 0 hereunder, except the right to the payment hereinafter provided, if any, shall terminate. City shall within sixty (60) days after the date of termination pay to Concessionaire the market value of the equipment owned by Concessionaire and used in the operation of the business (excluding the equipment kept for rental purposes) fixed in the same manner as the market value of fixtures and equipment may be fixed upon termination under paragraph 11 plus the following percentage of the "Concessionaire's Investment" according to the effective date of the termination, reduced, however, by any amount owned to City by Con- cessionaire under the terms of this agreement and further reduced by any amount required to accomplish repair or maintenance which under this agreement is the obligation of Concessionaire and further reduced by the amount of any lien on said fixtures or equipment and by any amount owed by Concessionaire, the payment of which is secured by a hypothe- cation of such fixtures and equipment or any part thereof; Termination Date: Percentage: Before April 1, 1981 100% April 1, 1981, to March 31, 1982 80% April 1, 1982, to March 31, 1983 60% April 1, 1983, to March 31, 1984 40% April 1, 1984, to March 31, 1985 20% April 1, 1985, to December 31, 1985 0% Upon City exercising this option and the payment of the sums herein provided, if any, by City to Concessionaire, Concessionaire's title to all such fixtures and equipment shall be automatically trans- ferred to City. If Concessionaire has no ownership interest in all or a portion of the fixtures or equipment, he shall, nevertheless, assign his right to possession and all other rights thereto to City upon the date of termina- tion fixed by City. -12- E 13. Removal of Property. Upon expiration or termination of this agreement, the Concessionaire shall within fifteen (15) days there- after remove from said premises, or otherwise dispose of, in a manner satisfactory to City, all personal property belonging to Concessionaire, including the equipment kept for rental purposes, located on said premises. Should Concessionaire fail to remove or dispose of his property within fifteen (15) days as herein provided, City may at its election consider such property abandoned or may dispose of same at Concessionaire's expense. Upon expiration or termination hereof, except as specifically provided herein, Concessionaire shall leave the premises, buildings, fixtures and equipment except that kept for rental purposes in good condition and repair. Concessionare shall not remove any fixtures or equipment used in the operation of the concession business, except that Concessionaire shall remove equipment kept for rental purposes and personal property which includes vehicles, groceries, supplies, personal clothing, office supplies, office furniture, cash registers, and nothing else. Upon expiration of this agreement Concessionaire's title to all fixtures and equipment which are not subject to removal by Concessionaire shall vest in the City and City shall have no obligation to pay Concession- aire for same. 14. Hold Harmless - Insurance. (a) Concessionaire agrees to release, and to protect and save harmless, City and State and their officers, agents and employees from any and all claims, loss or liability on account of injury, loss, or damage to persons or property suffered or sustained in, on, or about the premises or elsewhere by any person whomso- ever in any manner directly or indirectly arising by reason of the conduct of Concessionaire's business or the use of equipment, consumption of food or drink or the use or occupancy of said premises by Concessionaire or by any person claiming under Concessionaire. -13- (b) Concessionaire shall, at all times during the term of this agreement, maintain in full force and effect, with respect to this agree- ment, a policy or policies of Public Liability and Property Damage Insur- ance with minimum limits of Five Hundred Thousand and No /100 Dollars ($500,000.00), One Million and No /100 Dollars ($1,000,000.00) Public Liability, with products liability, and at least Fifty Thousand and No /100 Dollars ($50,000.00) Property Damage Liability, naming the City and State and their officers, agents, and employees, as additional insured. Said policy or policies shall contain an endorsement providing that the in- surance company shall not cancel such policy or policies without thirty (30) days' written notice to City and City and State are not liable for the payment of any premiums or assessments on said policy or policies. (c) Said policy or policies shall be in a form satisfactory to City and certificates issued by the insuring company shall be sub- mitted to City concurrently with the execution of this agreement. Certificates for any new or renewal policies effective during the term of this agreement shall be submitted to City at least twenty (20) days prior to the effective date of such policy or policies. 15. Damage of Premises. In the event of destruction, loss, or damage by fire or other cause of any of the buildings, improvements, or fixtures in said Public Service Areas No. 1 or No. 2 used by Con- cessionaire, the City shall not be obligated to replace such destroyed, lost, or damaged property, or be liable to said Concessionaire for any loss of use or damage by reason thereof. 16. Fire Insurance. Concessionaire agrees to maintain a fire insurance policy satisfactory to the City Attorney with extended coverage on the fixtures and equipment used by Concessionaire, insuring the same to the full insurable value thereof. In the event of destruc- tion, loss or damage, all proceeds from such insurance shall be deposited -14- 0 in a bank in the City of Newport Beach approved by City and used by Con- cessionaire only for the purpose of replacing, repairing and restoring the fixtures and equipment. Concessionaire shall begin the work within thirty (30) days after notice from the City to do so and complete the same as rapidly as possible. Should the cost of replacing, repairing and restoring such fixtures and equipment exceed the insurance proceeds, Concessionaire shall pay the remainder of such cost. Notwithstanding the interruption of the business of Concessionaire while the work is being done, this agreement shall continue in effect. If the buildings are destroyed or substantially damaged and the City gives written notice to Concessionaire that City does not intend to restore the buildings, or if one year has passed and the City has not restored the buildings, Concessionaire may elect to restore the buildings to the satisfaction of City and then restore, repair or replace the damaged fixtures and equipment and continue the concession business or may treat this contract at an end and withdraw any insurance proceeds from his insurance which were previously deposited as required herein. Fire insurance must be for an amount equal to ninety percent (90 %) of the full replacement cost and /or value of the im- provements on the property. 17. Workmen's Compensation Insurance. Concessionaire shall maintain Workmen's Compensation Insurance for all his employees. 18. Insurance Policies Filed. Concessionaire shall place the policies of all insurance required by this agreement or duplicates thereof or certificates evidencing the same on file with City. 19. Books of Account. Concessionaire agrees to keep books of account in connection with the operation of said concessions in a manner satisfactory to City, which books shall be open at all times to -15- �J City for the purpose of inspection or audit. For each calendar year or portion thereof at the beginning or end of the agreement, unless a different reporting period has been approved by City, Concessionaire shall submit within forty -five (45) days after the close of the report- ing period such financial statements of his operations as may be requested by City. 20. Notices. (a) All notices herein provided to be given, or which may be given, by either party to the other, shall be deemed to have been fully given when made in writing and deposited in the United States mail at Newport Beach, California, certified and postage pre- paid, and addressed as follows: To the Concessionaire at: Kilmer Enterprises, Inc. Corona del Mar State & City Beach Park P.O. Box 772 Corona del Mar, CA. 92625 and to the City at: City of Newport Beach Attention City Manager City Hall 3300 Newport Boulevard Newport Beach, California 92663 (b) The address to which the notices shall or may be mailed as aforesaid by either party shall or may be changed by written notice, given by such party to the other, as hereinbefore provided, but nothing herein contained shall preclude the giving of any such notice by personal service. 21. Title to Real Property. Concessionaire hereby acknowledges the title of the State of California and the City of Newport Beach to the land comprising Corona del Mar State and City Beach Park and agrees never to assail or contest that title. Concessionaire is not being granted any right, title or interest in or to the land or any part thereof by this agreement. -16- 22. Contractual Rights only. The parties agree that Concession- aire is not a lessee or tenant of the premises or any part thereof and that the only rights of Concessionaire are those provided in this agreement. Should Concessionaire be deemed a lessee or tenant, Concessionaire hereby specifically waives all rights under Section 1942 of the Civil Code of the State of California. 23. Administration of Contract. For the purposes of the admin- istration of this contract by the City, "City" shall mean the City Manager or an officer or employee of the City of Newport Beach authorized by him to administer the contract. If Concessionaire is dissatisfied with any action or decision of the City, Concessionaire may take the matter to the City Council for review. A decision by the City Council is final. 24. Limited Waiver. No waiver by City of any term or condition of the contract or of any breach thereof by Concessionaire shall constitute a waiver of any other term or condition or of any other or future breach. 25. Automatic Termination. Should any person other than Con- cessionaire secure possession of Public Service Areas No. 1 or No. 2 or of any part thereof or secure any rights under this contract by a writ of attachment or execution or by any voluntary or involuntary assignment or by any petition, receivership or proceedings in bankruptcy or any other operation of law whatsoever, and remain in possession or maintain any right or rights for a period of five (5) days, this agreement shall auto- matically terminate without any action on part of City, and City may enter and take possession of the premises, buildings and fixtures and remove all persons and property therefrom notwithstanding any other provisions of law or of this agreement. 26. State Approval. It is mutually understood that this agreement must be submitted to the Department of Parks and Recreation of the State of California for approval and is not effective until such approval. -17- • 0 27. Telephone Booths. Space is provided on said Public Service Areas No. 1 and No. 2 for telephone booths. Concessionaire shall arrange to have coin - operated telephones installed as necessary to serve the public. Concessionaire shall provide electricity to the booths and shall keep them clean. Any revenue to Concessionaire shall be included in his gross sales receipts. 28. Parking Lot. Concessionaire understands and agrees that City is to operate the parking lot at the Park and may increase or decrease the size thereof in the sole discretion of City. City shall determine the times of operation of the lot and may close the same at any time it deems necessary or convenient. All revenue from the lot belongs to City. It is agreed that City will allocate and designate the location of parking spaces deemed necessary by City to serve Concessionaire and employees of Concessionaire without charge therefor. The number of spaces allocated without charge shall not exceed ten (10). 29. Business Use Only. The buildings used hereunder by Concessionaire are for business use only and neither Concession- aire nor any employee or agent of Concessionaire shall reside in such buildings or in Public Service Areas No. 1 or No. 2. 30. Prompt Performance Required. Time is of the essence of this agreement. SM 1 IN WITNESS WHEREOF the parties have executed this agreement as of the date first above written. APPROVED AS 70 FORM: IN Z*4-1 City Attorney Concessionaire ._I _ . Attest: City Clerk APPROVED by Department of Parks and Recreation of the State of California, this 31 day of �,v,,,_f 1977. z -19- CHIEF DEPUTY DIRECTOP I hrrcby arty that 1!1 in S di for, f R ;!;ed• ? from: 11 c =,r ;y Yha' t is Contract is not sehiect to Cs - -'Went f Fir.;erc zn cval ua ecr SeCf;en�'8 of t: 6usget het of 1 he�ebv certify ,haf vff sxemP"" hove h A en rm ,ied wit hs vrtd This confrvLY is exem f From h� > nerdl Services ',pvrfineM P vvl. FIXTURES AND EQUIPMENT ' J Concessionaire will be required to equip the concession�,,B,�j make improvements to fully accomodate the services and uses required by this lease. PROPOSAL (1) Concessionaire shall pay to the City a guaranteed minimum monthly payment of $ 2,500.00 for the months of June, July, August and September or 32—% of the gross receipts for these months which- ever sum is greater, and the same percent for all times that the agreement is in effect, plus 42 % of the monthly gross receipts of all rental items. (2) Concessionaire offers a cash bonus to the City in the amount of $ 22,000,00 which is herein enclosed. (3) Proposal shall include a financial statement of the person or firm submitting the proposal. (See attached form Exhibit "A ") (4) Attach all data concerning previous experience and performance in operating a similar concession. Prospective bidders may obtain an agreement packet setting forth conditions and terms of the concession operation by contacting the Parks, Beaches & Recreation Department, 3300 Newport Boulevard, Newport Beach, 92663. - 2 - • Department of Parka and Recreation • EXHIBIT "A" Date March 1977 PROSPECTIVE CONCESSIONAIRE QUESTIONNAIRE Location of Concession Corona del Mar, Ca. This questionnaire is a part of your proposal for a concession in a State Park Unit. The information contained herein is confidential and must be verified on the attached verification paragraph IX. Answer all questions in full. Use the backs of each page for additional information, or attach additional sheets as required. The State intends to obtain a Credit Report to further establish your qualifications. I. Personal Information: A. Full Name (Print) Gordon Douglas Kilmer B. Home Address 1843 Port Kimberly Place, Newport Beach, Ca. C. Home Phone No. (714) 644 -6610 D. Name of Spouse Diane Judith Kilmer E. Your Age 35 F. Number and Ages of Dependent Children Twin Boys, 10 years old G. Your Social Security No. 5?3 -56 -2369 H. Your Driver's License No. and State Where Obtained H 153979, California I. Your Education A.A. Degree, Orange Coast College egree, Long beach 5tate University J. What is your general health? Do you have any physical handicaps? If so, describe. Excellent, no handicaps K. Have you ever been convicted of a crime (except traffic misdemeanors)? If yes, describe on reverse side. No II. Business Information. Fill in this portion if you are self- employed or work in your own business. A. Name and Address of Business Kilmer Enterprises, Corona del Mar State -City Beach Park, Corona del Mar, Calif. 92625 B. What is Nature of the Business? Food service and beach rental C. How Long in this Business? Seven years D. What was your business gross for the last full year of operation? Fiscal year ending March 31, 1977 $161,629.80 DPR 398 (Rev. 2/73) Page 1 of 10 i 0 E. What was the net profit for the last full year of operation? $29.574.53 F. Is your business a sole proprietorship, corporation, partnership, or other? Explain. California Corp ora ion G. If a sole proprietorship, are you the owner? If other, what is your function? President or ing Manager H. How many people do you employ or supervise ?40 part -time seasonal students I. Who is your landlord, and what is the address? City of Newport Beach, 3300 Newpor - ., 0 J. Do you have a training program for employees? If yes, explain. Home study and on the job traininz for part -time seasonal employees. K, Are your employees unionized? No L. Do your employees participate in a profit - sharing plan? Do you plan to have a participation plan in the proposed concession? No, there are no full -time employees M. Financial: (1) Is any part of your assets pledged as security for any debt? please furnish details. No If so, (2) If a corporation, furnish names of principal stockholders along with the number of shares held by each. All shares are held by Gordon Kilmer (3) If involved in any litigation, describe. (4) Furnish names and addresses and phone numbers for all banks in which you have accounts. U.C.B.. 9141 E. Coast Hwv.. Corona del Mar. Ca. 673 -9 (5) List cash value, company and individuals and to whom pays $83,400 Benefit, Old F00493167 payable to DPR 398 (Rev. 2/73) number of all life insurance on r EnterDris Page 2 of 10 1 i i 0 0 (6) List by company, amount, and expiration date, all insurance carried by the firm. Travelers Insurance Comnanyi $1,000,000 liability and bodily injury and ro ert dams et roducts liability, workmans com ensation and Yire rotection are a in con- tinued force with Uity notification prior to cance anon. (7) Give the names, addresses and phone numbers of at least three firms with whom you have had business accounts during the past three years. Excelsior Co., 926 E. First St., Santa Ana, Ca.(547 -7031) Laguna Produce, 761 Auna Canyon a. -1 ) _ L.E. ball o „ 310 0. 2 t., on��� T. 3141 oast Hwy., Corona el Mar, a. (8) List any, accounts receivable from partners, officers or stockholders. N. PROFIT AND LOSS STATEMENT COMPARATIVE STATEMENT OF PROFIT AND LOSS FOR PAST THREE COMPLETED YEARS Sales (Net of Refunds) Less: Cost of Goods Sold Inventory (Beginning) Add: Purchases Deduct: Inventory (End) Gross Profit on Sales Deduct: Expenses Net Profit on Sales Other Income (Net) INCOME Prepared By. Current FULL YEAR $161,629.80 $ 44,432.10 Immediate PAST YEAR 147,049.76 41,367.27 THIRD YEAR 169,192.96 43 879.43 $117,197.70 105.682.49 1259433.40 $ 88,864.20 84,629.67 92,841.9 $ 28,333.50 21052.82 32,591.44 $ 1,241.12 - 1,470.4 4 29,574.63 21,052.82 34,061.98 APR 398 (Rev. 2/73) Page 3 of 10 0 0 111. I:mdloYmanc Information, Fill in if you are now or have within the past 10 years been employed by others. A. Names of Employers and Dates of Employment: Dates Employed Employer's Name and Address From To Wages 1. S 2. 3. 4. 5. B. Job Descriptions, Describe your employer's business and your duties and responsibilities for each job listed above. Use back side of this sheet Include the number and types of employees you supervised, and the name and title of your immediate superior. IV. Bidders' Financial Statement. All applicants must supply the following information. As of March 1977 date Assets Cash on Hand and in Bank Accounts Receivable: Current Over 30 days Over 60 days TOTAL Notes Receivable: Current (Due within 1 yr.) Past due Available For use in Total this Concession $ 35,000 535,000 35,OOO 35,000 DPR 398 (Rev. 2/73) Page 4 of 10 0 0 Total Merchandise Inventory (Cost �—] Market C/) Other Current Assets (Describe): House $48,000 Income property Stock Total Current Assets Notes Receivable (Due after 1 yr.) Due from Affiliated or Subsidiary Concerns Land and Bulldings.(at coat) Less: Reserve for Depreciation Fixtures and Equipment (at cost) Leas: Reserve for Depreciation Prepaid Expenses Other Assets (Describe): Autos & personal property Total Total Assets and Total Available Liabilities Accounts Payable (past due) Accounts Payable (not due) Notes Payable Due Within One Year: . (To Whom) (Secured By) Notes and Accounts Payable to Partners, Directors, Officers, or Stockholders Available For use in this Concession 97,000 7,000 $187,000 12,599.59 7,979.80 cr 34,584.46 23.254.14 cr 10,000 $212,950.11 2,000 $37,000 RWO $42,000 DPR 398 (Rev. 2/73) Page 5 of 10 Accrued Liabilities (Interest, Rental, Payroll, etc.) Accrued Federal b State Income Taxes Other Current Liabilities (Describe): TOTAL CURRENT LIABILITIES Notes Payable After One Year (Describe): Other Liabilities (Describe): House mortgage 36,000 Income property 'j7,000 113,000 113,000 TOTAL 113,000 Net Worth Capital Stock (If Corporation) (Number of shares issued and issue price) ,000 Surplus (earned) Surplus (unearned) Capital (If partnership or proprietorship) 99,950.11 TOTAL LIABILITIES AND NET WORTH $212,950.11 V. Income vs. Expenditures Annual Income Salary - Yours $ 28,000 Salary - Wife or Husband Securities Income 250 Rental Income 5,600 Other Income - Describe on Reverse Side TOTAL INCOME $ 33,850 DPR 398 (Rev. 2/73) Page 6 of 10 i� 0 0 Annual Expenditures (Exclude Ordinary Living Expenses) Real Estate Payments $ 5,975 Rent - Income Taxes ),235 Insurance Payments 370 Property Taxes 2,132, 03 Other - Describe on Reverse Side (Include installment payments other than real estate) TOTAL UPENDITURES $ 11,712.03 Net Income (Income - Expenditures) $ 22,137.97 (Exclusive of Ordinary Living Expenses) VI. Other Pertinent Information: A. What Assets are in Joint Tenancy? Describe and name other party. House W /wife Income property W %wife B. Are you a guarantor or co- signer on anyone else's debt? Describe. No C. Are you involved in any lawsuit? Describe. No D. Are there any judgments against you or pending? Describe. No E. Have you ever gone through Bankruptcy? If yes, describe. No F. List any additional information which might further describe your qualifi- cations as related to the concession for which you are applying. Kilmer Enterprises has successfully operated this concession for the Dast seven years. VII. The Proposed Concession. A. How did you hear of the proposed concession? City of Newport Beach DPR 398 (Rev. 2/73) Page 7 of 10 } I . • B. What do you estimate the Bross of the proposed concession to be? $ 200,000 Your Net? 35,000 Cost of goods sold? 0,000 Other expenses? 0 ,000 C. What is your estimate of the cost of financing concession? $ 22,000+ Buildings and /or construction Equipment Stock Other _ TOTAL COST $ - D. How do you propose to finance concession? Personal funds $ X Lending institution - Other - Describe i TOTAL S (1) If from a lending institution: What commitments do you have? $ What interest do you pay? What is the term of the loan? - VIII. Associates and Management. Investor- associates who would join you in this venture: z z Individual Address Ownership Time A. Would you expect to devote your full time to this business? Yes If not, what V B. Would you employ a full -time manager? No If yea, describe his qualifications and attach a resume of his experience. DPR 398 (Rev. 2/73) Page 8 of 10 0 ix. VF.RIFICA PTfH\CfIC� MIC CTTnAr OF BIDDERS' PROPOSAL, NOTE: BIDDER, SELECT PROPER VERIFICATION FOR EXECUTION: 0 INDIVIDUAL The undersigned deposes and says that he has read and executed the foregoing concession proposal (1f any) together with the bidders' questionnaire and financial statement, and knows the contents thereof, and that they are true of his own knowledge except as to matters that are therein stated on his information or belief, and as to those matters that he believes it to be true. You are hereby authorized to obtain such information as you may require concerning the statements made herein. I /We agree to notify you of any material change in the statements set forth and this statement shall be construed by you to be a continuing statement of the condition of the undersigned until written notice to the contrary is received by you. I declare under penalty of perjury that the foregoing is true and correct. Dated this day of 197_, at California. Signature PARTNERSHIP The undersigned state that they are a partnership, that they have read and executed the foregoing concession proposal (if any) together with the bidders' questionnaire and financial statement, and knows the contents thereof, and that they are true of their own knowledge except as to matters which are therein stated on their infor- mation or belief and as to those matters that they believe it to be true. You are hereby authorized to obtain such information as you may require concerning the statements made herein. I /We agree to notify you of any material change in the statements set forth and this statement shall he construed by you to he a continuing statement of the condition of the undersigned until written notice to the contrary is received by you. We, and each and correct. of us, declare under penalty of perjury Dated this day of , California. DPR 398 (Rev. 2/73) that the foregoing is true 191_, at Signatures Page 9 of 10 CORPORATION The undersigned deposes and says that he is the President of Kilmer Enterprises , a corporation; that he has authority to enter into a contract on behalf of said corporation; that he executed the foregoing concession proposal (if any) together with the bidders' questionnaire and financial statement on behalf of said corporation; that he has read the said proposal (if any) and knows the contents thereof, and that the same is true of his own knowledge except as to matters that are therein stated on his information or belief and as to those matters that he believes it to be true. You are hereby authorized to obtain such information as you may require con- cerning the statements made herein. I /We agree to notify you of any material change in the statements set forth and this statement shall be construed by you to be a continuing statement of the condition of the undersigned until written notice to the contrary is received by you. I declare under penalty of perjury that the foregoing is true died correct. Dated this - day of Diarch , 197 7 , at Newport Beach , California. _ . 7 DPR 398 (Rev. 2/73) Page 10 of 10 I A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AWARDING A CONTRACT TO KILMER ENTERPRISES, INC. FOR THE OPERATION OF THE TWO FOOD CONCESSIONS AT THE CORONA DEL MAR STATE AND CITY BEACH PARK WHEREAS, pursuant to the notice inviting bids for the operation of the concessions at Corona del Mar State and City Beach, and in accordance with the specifications hereto- fore adopted, bids were received on the 4th day of April, 1977, and publicly opened and declared; and WHEREAS, it appears that Kilmer Enterprises, Inc. is the most responsible bidder; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that the bid of Kilmer Enterprises, Inc. for the operation of the two food and beach equipment rental concessions located at Corona del Mar State and City Beach Park be accepted. BE IT FURTHER RESOLVED that the Mayor and City Clerk are hereby authorized and directed to execute a contract in accordance with the specifications, bid and this award on behalf of the City of Newport Beach, and the City Clerk is hereby directed to furnish an executed copy to the successful bidder. ADOPTED this 11th ATTEST: City Clerk day of Mayor it 1977. DDO /bc 4/7/77