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HomeMy WebLinkAbout10441RESOLUTION NO. 10441 A RESOLUTION APPROVING A RESTAURANT LEASE AND OPERATING AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND SPITFIRE GRILL, LLC AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. A certain Restaurant Lease and Operating Agreement, a copy of which is attached hereto and made a part hereof by reference, after having been approved as to form by the City Attorney, by and between the City of Pueblo, a Municipal Corporation, and Spitfire Grill, LLC relating to the lease of space in the terminal building at the Pueblo Memorial Airport for a restaurant operation is hereby approved, subject to the conditions as set forth in said Restaurant Lease and Operating Agreement. SECTION 2. The President of City Council is hereby authorized to execute said Restaurant Lease and Operating Agreement on behalf of Pueblo, a Municipal Corporation, and the City Clerk shall affix the Seal of the City thereto and attest the same. INTRODUCED July 11, 2005 BY Michael Occhiato Councilperson APPROVED: PRES1DENT 9F CITY C IL ATTESTED BY: CITY CLERK LJ Background Paper for Proposed RESOLUTION /Q0. 1i / 04q I AGENDA ITEM #I D DATE: July 11, 2005 DEPARTMENT: AVIATION - DANIEL E. CENTA, P.E. TITLE A RESOLUTION APPROVING A RESTAURANT LEASE AND OPERATING AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND SPITFIRE GRILL, LLC AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME ISSUE Should the City Council approve a Restaurant Lease and Operating Agreement between the City of Pueblo and Spitfire Grill, LLC for restaurant operations at the Pueblo Memorial Airport. RECOMMENDATION Approval of this Resolution. BACKGROUND The existing Operator for the Airport Restaurant has requested the termination of the present Restaurant Lease and Operating Agreement as of August 11, 2005. A request for proposals was advertised and proposals were received from Spitfire Grill and Pueblo Diversified Industries (PDI). A selection committee reviewed the proposals and asked the Airport Advisory Committee for their recommendation. The Airport Advisory Committee recommended that the City accept the Spitfire Grill proposal as they proposed to pay the Airport a greater annual sum than did PDI. The selection committee agreed with this recommendation. The new Restaurant Lease and Operating Agreement will be for a term of five (5) years with an option to renew for an additional five (5) year term. FINANCIAL IMPACT The monthly rent will be 5.75 per cent of monthly gross revenue or a minimum guarantee of $416.67, whichever is greater. PUEBLO MEMORIAL AIRPORT RESTAURANT LEASE AND OPERATING AGREEMENT THIS LEASE made and entered into this I Ithh day of ,Iuly, 2005 between THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, hereinafter referred to as the "LESSOR" and, SPITFIRE GRILL, LLC, A COLORADO LIMITED LIABILITY COMPANY, hereinafter referred to as the "LESSEE ". WITNESSETH: That in consideration of the payment of rent hereinafter provided and the keeping and performance of the covenants and agreements of the Lessee, as hereinafter set forth, Lessor has and does hereby lease unto the Lessee, a certain area in the Terminal Building located at Pueblo Memorial Airport, Pueblo County, Colorado (herein "AIRPORT ") described in Exhibit A attached hereto and incorporated herein as if set out in full (herein "Property" or "Leased Premises ") for the sole purpose of conducting a restaurant business therein for a term of five (5) years from July 12, 2005 to July 11. 2010 If not in default under this Lease, Lessee shall have the option to extend the term of this Lease for a five (5) year period from July 12. 2010 to July 11, 2015 by giving to Lessor written notice of its exercise of such option on or before January 12, 2010 The extended term shall be upon the same covenants and conditions except (a) there shall be no further option to extend this Lease, and (b) the rent during the extended term shall be negotiated on a percent of gross revenues at the time of renewal. If Lessee does not timely exercise its option to renew, or if Lessor and Lessee are unable for any reason to mutually agree upon the rent for the extended term, the option to renew shall terminate and be of no further force and effect. Prior to the expiration of the initial term, this lease can be terminated by either party by giving one hundred eighty (180) days written notice. If notice is by Lessee, any deposits held by Lessor shall be forfeited. I. DEFINITIONS A. DIRECTOR OF AVIATION 1. Person in charge of the Airport for the Lessor, his assistant or duly authorized agent. B. GROSS REVENUES 2. As used herein, the term "Gross Revenues" shall mean and include all money or other things of value received by or paid to Lessee, or to others for Lessee's use and benefit, or to Lessee's sublessees, subcontractors and concessionaires, and all credit extended by lessee or said other persons (regardless of whether collection is made) in connection with any and all business conducted by Lessee or said other persons in, about, or from the Leased Premises, including (but without in any wise limiting the foregoing), the sale of food, beverages, or merchandise of whatever kind and character for which any compensation is received or is payable, whether such sales or services are made, performed, or furnished on the Leased Premises or elsewhere or by vending machines or other mechanical devices or otherwise; provided, however, that in the computation of Gross Revenues the following shall be excluded to-wit: a. Sales or use taxes on the sale, performance or furnishing of any service or merchandise which are by law required to be imposed on and paid by the consumers thereof and are required to be separately stated. 1 b. Meals to employees of Lessee when such are part of the compensation given by Lessee to such employees for services rendered in and about the Leased Premises. C. Sales of Lessee's furniture, fumishings, fixtures, and other improvements to or from the Leased Premises or to or from any other premises of Lessee. d. Federal entertainment taxes on the furnishing of any entertainment where such taxes are by Federal law required to be imposed on and paid by the customers to whom such entertainment is provided and are required to be separately stated. e. Gratuities or "tips" paid to employees if such gratuities or tips are not received by such employees for the benefit of Lessee or required to be paid by such employees to the Lessee. U. RIGHTS AND PRIVILEGES OF LESSEE A. Lessee shall engage in and conduct said Restaurant business at and on the Property for the convenience of patrons and tenants of the Airport and the general public desiring such services at the Airport; which right, without limiting the generality hereof, shall include: 1. The right, subject to necessary licensing, to serve food, soft drinks, and alcoholic beverages, and other items pertaining to the operation of a restaurant. The right to sell tobacco products, ice cream products, gum, candies, and similar items commonly offered for sale at a restaurant. 2. The non -exclusive right to provide in -flight food service to scheduled and supplemental airlines, private and executive aircraft who have requested said services of Lessee, and the right to prepare food on the Property and deliver, or cause to be delivered, to and for the purpose of consumption elsewhere. 3. The right to use, operate, and maintain equipment owned by Lessor and shown in Exhibit C attached hereto and made a part hereof ( "Equipment "). 4. The right to equip, install, operate and maintain on the Airport, at Lessee's expense advertising facilities; provided however, that in all cases the number, size, location, general type and design, and the method of installation shall be subject to the prior approval of the Director of Aviation. This limitation shall apply to and include all signs, placards, posters, or other forms of identification or advertising media, installed, placed upon or affixed to the Property exclusively to Lessee hereunder. 5. The right, subject to prior approval of the Director of Aviation, of plans and specifications, location and inspection of same; to make improvements, modifications, revisions and other alterations to the Property. Costs of such improvements, modifications, revisions and alterations shall be borne solely by Lessee, and all such improvements, modifications, revisions or alterations shall become and remain the property of the Lessor. 6. Lessee, its employees and invitees shall have the right of ingress and egress between the main entrance of the Airport as the same now exists or may hereafter be relocated and the Leased Premises over, upon and through such streets and no other as from time to time shall be designated by the Director of Aviation. Driveways from existing streets into the Leased Premises shall be located as designated by the Director of Aviation. III. RIGHTS AND PRIVILEGES OF LESSOR A. All rights not herein specifically granted to the Lessee are reserved to Lessor. B. Lessor also reserves the right to require Lessee to make any adjustments deemed necessary to improve the interior appearance of the Leased Premises or the quality of service rendered in connection with Lessee's operation. IV. OBLIGATIONS OF LESSEE A. It shall be the obligation of Lessee to continuously operate and conduct the restaurant business as herein set forth in a first class manner, and to maintain the Property at all times in a safe, clean, orderly and attractive condition. B. Lessee, its officers, employees, agents or servants shall, at all times, comply with the Federal Pure Food and Drug Laws, Health Rules and Regulations and other applicable Laws and Regulations of the United States Government, and the State of Colorado and all applicable Ordinances, Codes and Regulations of the City and County of Pueblo, including the rules and regulations governing the operation of the Airport. C. All food, beverages, confections and other items sold and kept for sale by Lessee shall be of high quality, wholesome and pure and the service shall be prompt, attractive, clean, efficient and courteous. Violation of any provision of this paragraph by Lessee, its officers, employees, agents or servants shall cause this Lease to be subject to cancellation by Lessor, if not corrected immediately upon written notice by the Director of Aviation. D. Except as otherwise specifically provided herein, Lessee shall pay all costs of operating the restaurant business and maintaining the Property, including without restriction because of enumeration, necessary personnel, all licenses, permits or other similar authorizations as required under Federal, State or Local Laws and Regulations, insofar as they are necessary to comply with the requirements of this Lease and the rights and privileges extended against its property, situated on, or within, the Leased Premises or otherwise within the confines of the Airport. E. Lessee shall, at its sole expense, maintain and keep the Leased Premises, and all improvements thereon, including without limitation, the Equipment, Sewer and Water lines and connections, Plumbing, Heating and Air Conditioning equipment and systems, in good condition, appearance, and state of repair and provide all interior building maintenance and custodial service for the Leased Premises. It being expressly understood and agreed that Lessor shall not be responsible for any defect in the Leased Premises or improvements thereon or obligated to make any repair, except for exterior maintenance and repairs to the exterior of the Property. If Lessee should fail to keep and maintain the Leased Premises or improvements thereon in such good order and repair as is reasonably required, Lessor may, without any obligation to do so, enter the Leased Premises, without such entering causing or constituting a termination of the Lease, or an interference with the possession of the Leased Premises by Lessee, and perform the necessary maintenance and/or restoration 3 work to the Leased Premises to the condition required by the Lessor, the cost of which shall be borne solely by Lessee. All such costs shall be paid by Lessee to Lessor in addition to rents, within thirty (30) days after completion of the work. F. The Lessee shall, at its own expense, keep the Leased Premises neat, clean, safe and orderly at all times, free of waste, rubbish and debris, and shall provide a complete and proper arrangement for the sanitary handling and disposal of all trash, garbage, and other refuse resulting from its activities at the Airport. All trash, garbage, and other refuse shall be out of view of the public. G. Lessee shall pay all utilities supplied to and used in the Leased Premises, and shall enter into separate agreements with the utility organizations for metering such services; except that the Lessor shall furnish at its expense water and sewer services for the Leased Premises. H. Lessee shall at all times retain an active, qualified, experienced and competent manager to supervise the restaurant business who shall be authorized to represent and to act for and on behalf of the Lessee. 1. Lessee's personnel shall be courteous, efficient, clean and neat in appearance, and shall be trained and qualified to perform any and all services to the public required or contemplated under the terms of this Lease. 2. Lessee shall not employ any person or persons in or about the Leased Premises who shall use improper language, or act in a loud, boisterous, or otherwise improper manner. I. Lessee, except as may be otherwise provided in other contracts entered into with the Lessor, shall not engage in any business at the Airport other than that which is expressly authorized herein. J. Lessee shall repair all damages to the Leased Premises caused by its officers, employees, invitees, agents or patrons or arising out of Lessee's operations thereon. K. Period of Restaurant operation: Except as herein set forth, the dining room area of the Restaurant shall remain open for service to the public seven (7) days per week during the hours of 7:00 a.m. to 3:00 p.m., and for scheduled Charter flight operations, with adequate service to meet the public demand. It is understood and agreed upon that the restaurant will be closed Thanksgiving Day and Christmas Day. 2. The bar area of the restaurant shall remain open for service to the public during dining room hours of operation; except, that the hours of operation of the bar and the sale of alcoholic beverages shall be subject to Regulations as provided by the Statutes of the State of Colorado and Local Ordinances, Rules and Regulations, whichever may apply to the Premises under the Agreement. 3. Restaurant operating hours may be changed with the prior written approval of the Director of Aviation. L. Lessee shall make the following improvements to the Leased Premises: (a) repaint the dining room before opening, (b) recover all booths within the first year of the term of the 4 Lease and (c) install a pizza oven within the first three years of the term of the Lease. All improvements and cost thereof shall be first approved by the Director of Aviation. Lessee shall receive credit against rent for the Lessee's actual cost of improvements approved by the Director of Aviation. V. OBLIGATIONS OF LESSOR A. Lessor, at its cost, shall provide water and sewer services for the Leased Premises, unless conditions beyond the Lessor's control shall prevent Lessor from so supplying such water and sewer services. B. Lessor shall provide periodic washing of windows on the outside only. C. Lessor shall not be responsible for any damage to, or loss of property of Lessee, its officers, employees, agents, servants, patrons, or any other person or persons at the Airport. VI. RENTALS AND FEES A. Lessee agrees to pay to the Lessor, without offset or deduction, at such places as the Lessor may designate from time to time, for the use of the premises, facilities, concession rights and privileges, a monthly rent of 5.75 per cent of monthly gross revenue or a minimum guarantee of $416.67 a month, whichever is greater. Rent during the renewal term is to be negotiated. B. Lessee shall make a monthly report of all gross revenues to the Lessor at such places as may from time to time be designated by Lessor, on a form or forms approved by the Director of Aviation. Said report to be used as the basis for computation of rents. Said report shall be submitted no later than the tenth (10th) day of each month for the preceding month, and all rents shall be paid no later than the fifteenth (15th) day of the following month. C. Lessee shall keep and maintain at the Leased Premises accurate and complete books and records of its Restaurant operation and gross receipts. Lessee shall permit the duly authorized representative of the Lessor to examine Lessee's books at any time during business hours. VII. MISCELLANEOUS A. The Lessee by accepting this Lease expressly agrees for itself, its successors and assignees that it will not make use of the Leased Premises in any manner which might interfere with the landing and taking -off of aircraft from Pueblo Memorial Airport or otherwise constitute a hazard to aviation. In the event the aforesaid covenant is breached, the Lessor reserves the right to enter upon the Leased Premises and cause the abatement of such interference at the expense of the Lessee. B. Lessor and Lessee understand and agree that the General Provisions consisting of Paragraph 1 though 17, attached hereto as Exhibit B are incorporated herein and shall be binding upon and inure to the benefit of Lessor and Lessee as if set out herein full. In the event of a conflict between the provisions of the General Provisions and this Lease, the provisions of this Lease shall control. 5 C. If Lessee defaults in the payment of rent or any part thereof or fails to perform or observe any of the conditions and covenants on its part to be performed or observed hereunder, and such default or failure shall continue for a period of ten (10) days after written notice thereof has been mailed to Lessee by first class mail addressed to Lessee at its last known address at Pueblo Memorial Airport, then, in that event, and as often as same may happen, it shall be lawful for City, at its election, with or without notice, to terminate this Lease without prejudice to any claim for rent or for breach of covenants, or without being guilty of trespass or forcible entry or detainer. City is hereby granted a lien and security interest for payment of rent and damages for breach of covenants upon all Lessee's goods and personal property which is or may by placed upon the Property including without limitation business fixtures, equipment, inventory and proceeds thereof and such lien may be enforced by the taking and sale of such property in the same manner and as provided for the disposition of collateral under the Colorado Uniform Commercial Code. D. If the Property is left vacant and any part of the rent remains due and unpaid, City may, without being obligated to do so, and without terminating this Lease, retake possession of the Property and rent the same for such rent and upon such terms as City may think best, making such changes and repairs as may be required, giving credit for the amount of rent received less all expenses of such changes and repairs, and Lessee shall be liable for the balance of the rent until expiration of this Lease. E. Lessee agrees to pay to City all costs, including reasonable Attorney Fees, of any action brought by City to enforce the Lease or to recover rent or other money due and unpaid under the Lease or to recover possession of the Property, whether such action proceeds to judgment or not. F. No waiver of any breach of any one or more of the conditions or covenants of this Lease by City shall be deemed to imply or constitute a waiver of any succeeding or other breach hereunder. The acceptance of rent by City shall not constitute a waiver of any breach then existing. G. If Lessee remains in possession of the Property after termination of the Lease without written agreement, such possession shall be deemed to be a tenancy from month to month upon the same covenants and conditions set forth herein and at a monthly rental equal to two times the average of the monthly rent payable hereunder for the prior twelve months. H. In the event of a fire or other casualty in or to the Leased Premises, Lessee shall immediately give notice to Lessor. If the Leased Premises, through no fault nor neglect of Lessee, its agents, employees or invitees, shall be damaged by fire or other casualty so as to render the Leased Premises untenantable, and Lessor elects to repair the same, the rent herein shall abate thereafter until such time as the Leased Premises are made tenantable by Lessor. In the event the Leased Premises or the Terminal Building shall be damaged by fire or other casualty and Lessor shall decide not to rebuild or repair (which decision Lessor may make in its sole discretion) then all rent owed up to the time of such damage shall be paid by Lessee and this Lease shall terminate. I. Lessee has deposited the sum of $500.00 with Lessor as security for Lessee's prompt performance of all the terms covenants and agreements contained in this Lease. Lessee understands and agrees (i) that such deposit is not a prepayment of rent and that Lessor shall not be obligated to apply said deposit to any unpaid rent or portion thereof, although it may do so at its option; and (ii) that Lessor shall have no obligation to account to Lessee and 6 Lessee shall have no right to recover from Lessor any interest, earnings or other increments which may accrue during the time such deposit is held by Lessor. Notwithstanding anything contained herein to the contrary, the initial five (5) year term of this Lease shall commence July 12, 2005 or upon negotiated acceptance of the Leased Premises, whichever occurs earlier. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of this day and year. DATED THIS 11th day of July 2005. Attest: City C LESSOR: PUEBLO, A MUNICIPAL CORPORATION r By obert D' r. President oft City Counc' APPROVED AS TO FORM: Ci y Attorne LESSEE: SPITFIRE GRILL, LLC i [ ?1 3 6L "sting Baski Manager/Member Dere nova M nager/Member