DATE: October 9, 2018
SUBJECT:
Title
RESOLUTION CONSENTING TO A SUBLEASE BETWEEN LFS DEVELOPMENT, LLC, AND HOTEL CIRCLE CONVENIENCE, LLC, FOR A TEN-YEAR TERM WITH ONE FIVE-YEAR OPTION, WITH CONDITIONS
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EXECUTIVE SUMMARY:
The District entered into a 66-year Lease1 (Lease) with LFS Development, LLC, (Lane Field South) on June 1, 2016 to operate a 400-room single-branded Intercontinental Hotel located at 901 Bayfront Court in the City of San Diego. Lane Field South is requesting approval of a sublease with Hotel Circle Convenience, LLC (Hotel Circle Convenience) to operate a convenience store and gift shop within the hotel building. The proposed sublease with Hotel Circle Convenience is a ten-year term with one five-year option to extend conditioned upon consent of the sublease by the San Diego Unified Port District (District) Board of Port Commissioners (Board). The proposed sublease is consistent with the terms of the Lease and Board Policy No. 355 (BPC 355), and staff recommends the Board grant its consent.
RECOMMENDATION:
Recommendation
Adopt a Resolution consenting to a sublease between LFS Development, LLC, and Hotel Circle Convenience, LLC, for a ten-year term with one five-year option, with conditions.
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FISCAL IMPACT:[h1]
Lane Field South began paying minimum annual rent to the District in the amount of $231,378 on June 1, 2018, and percentage rent that ramps up annually for 24 years began on August 28, 2018. The Hotel Circle Convenience sublease is expected to generate approximately $3,550 in rent in the first year which will increase annually as percentage rent escalates, however, percentage rent is not expected to surpass the minimum annual rent for several years.
This agenda item is subject to BPC Policy No. 106 - Cost Recovery User Fee Policy.
COMPASS STRATEGIC GOALS:[h2]
This agenda item supports the following Strategic Goals.
* A vibrant waterfront destination where residents and visitors converge.
* A financially sustai...
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