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Agenda Item
ASR
Control 22-000139 |
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MEETING DATE: |
03/08/22 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
5 |
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SUBMITTING
Agency/Department: |
County Executive Office (Approved) |
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Department contact
person(s): |
Thomas A. Miller (714) 834-6019 |
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Dylan Wright (714) 480-2788 |
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Subject: Approval Salt Creek Beach
Concession Vendor Lease
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ceo CONCUR |
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Clerk of the Board |
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Concur |
Approved Agreement(s) and Resolution(s) |
Discussion |
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3 Votes Board Majority |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: See Financial Impact Section
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Prior Board Action: N/A
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RECOMMENDED ACTION(S):
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1. |
Find that the project is categorically exempt from the California Environmental Quality Act, Class 1 (Existing Facilities) pursuant to CEQA Guidelines, section 15301. |
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2. |
Approve and authorize the Chief Real Estate Officer or designee to execute the Lease Agreement with 10th Hole Associates, Inc., in substantially the form attached with modifications that do not increase the cost or liability to the County, upon County Counsel approval, for concessions at the County’s Salt Creek Beach, for a 10-year term, commencing May 1, 2022, with two five-year options to extend. |
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3. |
Authorize the Chief Real Estate Officer or designee to execute subsequent documents, option terms and amendments that make non-monetary changes that do not increase County liability or costs by more than $75,000 per year, as approved by County Counsel. |
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4. |
Adopt Resolution to authorize alcoholic beverage service at Salt Creek Beach pursuant to Lease Agreement terms with 10th Hole Associates, Inc. |
SUMMARY:
Approval of the Lease Agreement with 10th Hole Associates, Inc., as concessionaire for Salt Creek Beach will enable OC Parks to offer enhanced food and beverage service and equipment rentals to beach visitors, as well as enhance and increase special events at the popular destination.
BACKGROUND INFORMATION:
Since at least the early 1990s, the County has utilized a private concessionaire to operate a food sales and beach equipment rental business out of the concession building (Concession) at Salt Creek Beach, a County beach park within the City of Dana Point. The Concession at Salt Creek Beach was constructed in the 1970s and renovated and expanded in 1989, and is approximately 1,000 square feet in size. The existing lease expired in April 2021, and the incumbent concessionaire was in a month-to-month holdover until the tenant vacated the premise on November 20, 2021.
A Request for Proposals (RFP) was issued by CEO Real Estate on May 28, 2021, to establish a new Concession lease. The RFP specifically sought an individual or business entity with a dynamic vision to create an optimal visitor experience that maximizes the potential and use of the Concession, Salt Creek Beach, and the beach amenities. The RFP encouraged respondents to propose ideas beyond just the sale of food and beverages, such as offering beach-related recreational equipment rentals including beach chairs and beach umbrellas, catering, services for special events, and other creative ideas.
Four proposals were submitted by the July 30, 2021, deadline. The three-person proposal evaluation committee was comprised of one manager from CEO Real Estate, one OC Parks facility manager, and one OC Parks division manager.
Evaluations of the written proposals were based on the following criteria:
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Criteria |
Points |
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The respondent’s approach to the site and proposed programming. |
20 |
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The team’s qualifications and references. |
20 |
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Experience with other projects or developments similar to the proposed scope. |
20 |
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Respondent’s development plan for the concession. |
20 |
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Willingness to enter into Ground Lease Agreement as proposed. |
10 |
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Financial strength of respondent and ability to raise capital. |
10 |
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100 |
The maximum score possible was 100, and the proposals were scored as follows:
Proposal Average Score
Young’s Beach Shack 96
Zack’s Salt Creek 81
The Salt Creek Snack Bar & Rentals 60
Baja Surfing Taco 58
Following evaluations, Young’s Beach Shack (Young’s) was the highest scoring proposer. Young’s vision for the Concession is to offer creative and locally inspired food and beverage options, including beer and wine. The menu items will be varied to appeal to those seeking healthy and wholesome items or more decadent items. Young’s will also provide snack options at the same price point of convenience store offerings. Young’s also proposes to provide event planning and production services for groups and families, subject to the approval of the OC Parks Director and any required coastal development permits, if required. It also envisions offering public rentals of beach-related items (including boogie boards, soft surfboards, beach chairs and umbrellas, lockers, and beach cruiser-style bicycles) and selling beach-related merchandise (including t-shirts, flip flops, beach towels, hats, sunscreen, reusable beverage containers, and surf accessories). The evaluation committee agreed that the proposal was a well-presented package both in terms of concession operations and finances.
Included in Young’s proposal is a remodel of the interior and exterior of the Concession, mimicking the color scheme of the original Young’s Beach Camp that existed in the same general area between 1930 and 1950. Young’s will also update and modernize outdoor seating areas, kitchen area, lighting fixtures, and signage. Young’s goal is to refresh the Concession to ensure more visual appeal and to maximize the use of the Concession.
Young’s will be operated by 10th Hole Associates, Inc., which is also associated with The Ranch at Laguna Beach, a highly acclaimed luxury resort, and Lost Pier Café, the County concession at Aliso Beach. Both The Ranch at Laguna Beach and Lost Pier Café are operated professionally and have excellent reviews from customers and top awards from travel and leisure magazines.
The negotiated lease is for a term of 10 years, which can be extended twice for a period of up to five years each (New Lease). The New Lease terms include a proposed minimum rent of $90,000 annually plus 6 percent of any gross receipts over $1.5 million annually. Young’s proposes over $500,000 in improvements to the Concession and the County will provide a $50,000 credit towards the minimum rent annually for the next five years ($250,000). Young’s will also manage all special events at Salt Creek Beach under the New Lease, relieving OC Parks staff of that burden.
Orange County Codified Ordinance 2-5-35 prohibits possession or consumption of alcoholic beverages at County recreational areas, unless otherwise authorized by the Board of Supervisors (Board) by resolution or at County-implemented events approved by the OC Parks Director. Alcoholic beverage service is authorized by resolution at certain OC Parks locations, which are used for weddings and other special events, however, only the North Shore event area of Salt Creek Beach is included in those identified locations. A Resolution has been prepared (see Attachment D) to authorize alcoholic beverage service at Salt Creek Beach pursuant to the terms of the New Lease. The proposed New Lease would limit the sale of alcoholic beverages to the hours of 10 a.m. to 9 p.m. and consumption of alcoholic beverages is limited to the patio area of the Concession—no alcohol is allowed on the beach.
Based on the above, CEO Real Estate and OC Parks both recommend the approval of the New Lease by the Board to facilitate the renovation and upgrade of the Concession for the benefit of the County and the public.
OC Parks Commission: The Commission considered this item at its October 7, 2021, meeting and recommended its approval by the Board.
Compliance with CEQA: The proposed project is Categorically Exempt (Class 1) from provisions of CEQA pursuant to Section 15301 because it allows for a lease of existing public facilities involving negligible or no expansion of existing or former use.
FINANCIAL IMPACT:
Approval of the lease will result in additional revenue to the County of a minimum of $90,000 annually, with the first five years of the lease subject to a $50,000 annual credit by the County towards the minimum rent annually. Revenue for this item will be absorbed in the Fund 405 FY 2021–22 Budget and included in the budget for future fiscal years.
STAFFING IMPACT:
N/A
REVIEWING AGENCIES:
OC Community Resources, OC Parks
ATTACHMENT(S):
Attachment A — Location Map
Attachment B — Concession Lease Agreement
Attachment C — Summary of Lease
Attachment D — Resolution
Attachment E — Conveyance Questionnaire
Attachment F — Orange County Codified Ordinance 2-5-35
Attachment G - Evaluation Sheet