DATE: October 13, 2016
SUBJECT:
Title
RESOLUTION ESTABLISHING RENT FOR CRAB ADDISON, INC. DBA JOE'S CRAB SHACK AT THE ROWING CLUB, LOCATED AT 525 EAST HARBOR DRIVE IN THE CITY OF SAN DIEGO FOR THE PERIOD OF NOVEMBER 1, 2016 THROUGH OCTOBER 31, 2021
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EXECUTIVE SUMMARY:
The District has a lease1 (Lease) with Crab Addison, Inc. dba Joe's Crab Shack at the Rowing Club (Joe's Crab Shack) located at 525 East Harbor Drive in the City of San Diego. The Lease provides for an initial twenty-one (21) year term, and ten (10) options to extend the term of two (2) years each, for a total potential term of forty-one (41) years. The Lease commenced on November 1, 1981 and will end on October 31, 2022 if the remaining two options are exercised. The Lease comprises approximately 1.2 acres and includes a 275 seat restaurant (Attachment A). Pursuant to the Lease, a rent review is required for the period of November 1, 2016 through October 31, 2021.
The existing percentage rental rates in the Lease are consistent with the Board of Port Commissioners (Board) adopted rental rates and are proposed to remain unchanged. Concession rent calculated on current percentage rental rates exceeds the existing Minimum Annual Rent (MAR) of $77,200. Joe's Crab Shack has agreed to an increase in the MAR from $77,200 to $88,729, effective November 1, 2016. The increased MAR represents an increase from 75% to 77% of the average percentage rent paid during the last three accounting years of the previous rental period. BPC Policy No. 355 states that MAR should be set at no less than 75% of market rent as determined by the average of the tenant's previous three accounting years' rental payments.
RECOMMENDATION:
Recommendation
Adopt a Resolution establishing rent for Crab Addison, Inc. dba Joe's Crab Shack at the Rowing Club, located at 525 East Harbor Drive in the city of San Diego for the period of November 1, 2016 through October 31, 2021.
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FISCAL IMPACT:
The proposed Board acti...
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