DATE: February 12, 2019
SUBJECT:
Title
RESOLUTION ESTABLISHING RENT FOR BARTELL HOTELS, DBA HILTON SAN DIEGO AIRPORT LOCATED AT 1960 HARBOR ISLAND DRIVE, IN THE CITY OF SAN DIEGO FOR THE PERIOD OF JANUARY 1, 2019 THROUGH DECEMBER 31, 2028
Body
EXECUTIVE SUMMARY:
Bartell Hotels, dba Hilton San Diego Airport (Hilton) has a lease1 with the District for a 211-room hotel located at 1960 Harbor Island Drive in the City of San Diego. The 50-year lease commenced on January 1, 1999 and terminates on December 31, 2048. Pursuant to the lease, a rent adjustment is required for the ten-year period from January 1, 2019 through December 31, 2028. Staff has reviewed the current minimum annual rent (MAR) and percentage rental rates under the lease and has proposed increases which Hilton has accepted. Hilton currently has a MAR of $719,425 and the proposed change would increase the MAR to $764,690. The proposed changes to the percentage rental rates would include increases to the parking sales and banquet/convention sales rental rates effective as of January 1, 2019, and an increase to room sales rental rate which would be effective as of January 1, 2024. Staff recommends the Board adopt a resolution establishing the rent for Hilton for the ten-year period ending December 31, 2028.
RECOMMENDATION:
Recommendation
Adopt a resolution establishing rent for Bartell Hotels, dba Hilton San Diego Airport located at 1960 Harbor Island Drive, in the City of San Diego for the period of January 1, 2019 through December 31, 2028.
Body
FISCAL IMPACT:
Hilton currently has a MAR of $719,425 and this Board action would increase the MAR to $764,690. Hilton paid $1,028,728 in concession rent in the last year. The increases to the percentage rent categories are expected to increase concession rent by approximately $28,698 annually for the first 5 years of the 10-year rental period, which increases to approximately $58,244 additional rent annually as of January 1, 2024 when the i...
Click here for full text