ANALYSIS:
At the June 27, 2018 Commission meeting, the Mayor and City Commission directed staff to explore revenue generating opportunities and guest/customer satisfaction. The City has discussed, with Concessionaire, additional revenue opportunities which may be derived from the public beachfront concessions, as well as additional services which may be provided to enhance the experience of visitors and residents. Following are the basic terms and conditions contained in the current agreement, along with the proposed terms discussed with Concessionaire:
CURRENT TERMS: PROPOSED TERMS:
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1.
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Concession Area:
Lummus Park, Ocean Terrace, North Shore Open Space Park and South Pointe Park Beach (currently not activated).
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Same – with the following modifications:
Lummus Park/Muscle Beach Food Trailer – to provide healthy food concession options west of the dunes, as illustrated in Attachment A (Muscle Beach Food Trailer).
Ocean Terrace - this concession area would be extended to the south to include Bandshell Park Beach to provide free beach equipment to seniors 65 years of age or older, on Tuesdays, or additional days as requested by the City; and extended to the north to include the library and Altos del Mar Park
Allison Park – to service the temporary Sabrina Cohen Adaptive Beach Program, and potentially at 53rd Street to serve the permanent location.
The Concession Areas are attached hereto as Attachment B (Concession Areas).
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2.
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Concession Fee:
The concession fee shall continue to be a Percentage of Gross Sales (PG), in the amount contained in the current Agreement, as follows:
Food and Beverage Sales 15%
Beach-related Sundries Sales 20%
Beach Equipment Rentals 20%
Watersports Equipment Rentals 20%
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Same – with the following modifications:
Sand Sifting Services 20%
Team Building Events 25%
Advertising/Sponsorships 50%
Concessionaire shall provide up to three team building events to the City annually.
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3.
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Minimum Guarantee:
$900,000 annually, payable in advance in three (3) payments
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Effective January 1, 2020, $1,200,000 annually, payable in advance in two (2) payments, subject to 3% annual increases for the remainder of the initial term.
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4.
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Value-Added Enhancements:
Annual donation of $5,000 to be utilized by the City for scholarships and contributions to philanthropic organizations with an emphasis on marine-related and children-related recipients.
Annual donation of $5,000 to be utilized by the City in support of environmental organizations and programs.
Promotional Towel Program – 600 initial towels, replaced with 600 additional towels once during the initial term, and twice during the renewal term. Such design and content shall be subject to City Manager’s approval.
Concessionaire shall offer a personal beach storage vault rental program, at a cost of $5.00 each, to any Concession patrons wishing to store personal items.
Concessionaire shall provide, at its sole cost and expense, City-approved individual, disposable ashtrays for all patrons smoking within the Concession Area.
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Annual donation of $7,500 to be utilized by the City for scholarships and contributions to philanthropic organizations with an emphasis on marine-related and children-related recipients.
Annual donation of $7,500 to be utilized by the City in support of environmental organizations and programs.
Same
Same
Same
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5.
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Maintenance:
Concessionaire shall provide sand sifting equipment, whether manual or motorized, and staff appropriately trained and/or certified to operate same, within all Concession Areas and those “areas outside of the Concession Areas”. Sand sifting shall occur no less than two (2) times weekly.
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Same
Furthermore, Concessionaire may provide mechanized sand sifting services to private upland properties, and City agrees to allow Concessionaire to charge said upland properties a fee for sand sifting services. The City will share in all revenues related to sand sifting services. In exchange for the enhanced sifting services, and the share of revenue, City agrees to allow Concessionaire to utilize, at no additional cost, the City provided dumpster at 10th Street. Additionally, concessionaire shall be permitted to expand it storage area at 10th Street.
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Enhanced Services / Benefits
1. Concessionaire shall be permitted to provide food heating by means of battery power, solar power, or propane gas systems. Furthermore, Concessionaire shall be permitted to deploy two food trailers daily within the Lummus Park Concession Area. An illustration of the proposed food trailers is attached hereto as Attachment C (Food Trailers).
2. Concessionaire shall be permitted to utilize up to five (5) carts in the Lummus Park Concession Area, to dispense ice cream and frozen food and beverage (non-alcoholic) products. Concessionaire may use vehicles and other motorized equipment to deploy the carts to the Concession Area. All carts must be stationary once located within the Lummus Park Concession Area. The design, size, type, material, and color of such carts shall be reviewed and approved in writing by the City Manager. The location of same shall be designated within Concessionaire’s approved site plan. An illustration of the proposed ice cream and beverage cart is attached hereto as Attachment D (Ice Cream/Beverage Cart).
3. Concessionaire shall provide additional watersports equipment within Lummus Park, to include up to 14 Wave Runners – (12 Wave Runners Rentals + 2 Chase Boat Wave Runners), 2 Banana Boats, 1 Parasail and a total of 6 Stand-Up Paddleboards and/or Kayaks).
4. Subject to the 76th Street channel being designated as a motorized water channel, Concessionaire shall provide motorized Watersports Equipment in the Ocean Terrace Concession Area during the summer months and kiteboarding equipment/lessons during the winter (windier) months.
5. Concessionaire's current uses of the Concession Area, as defined in the Agreement, do not contemplate the production, promotion or sponsorship by the Concessionaire of special events in any of the Concession Areas. However, Concessionaire routinely produces corporate teambuilding events within the Concession Areas under a special events permit for each event. The Concession Agreement shall be modified to allow Concessionaire to conduct teambuilding events within the Concession Areas, which is hereby considered an approved use and not subject to additional special event permit requirements. The City shall receive 25% of all revenue generated by the teambuilding events. The pre-approved teambuilding events must be consistent with the pre-approved site plans attached hereto as Attachment E (Teambuilding Events). In the event Concessionaire does produce, promote, or sponsor a special event, other than a teambuilding event, it shall comply with by the City's Special Events Permit Requirements and Guidelines.
6. Concessionaire is currently prohibited from negotiating all forms of endorsement and/or sponsorship agreements based on the marketing value of any City trademark, property, brand, logo and/or reputation and that any and all benefits derived from an endorsement and/or sponsorship agreement based on the marketing value of a City Mark, including any monetary contributions, shall belong solely and exclusively to the City. Going forward, the Concession Agreement shall be modified, in order that the prohibition on Concessionaire entering into endorsements or sponsorship agreements, shall not be deemed to include nor prohibit the Concessionaire’s right to sell advertising for display in locations that are not plainly visible to the general public, such as the underside of umbrellas or menu display boards contained within a kiosk or hut. The prohibition shall also be deemed to not include nor prohibit the Concessionaire’s right to offer the exclusive sale, rental or use of any particular brand or product that would otherwise be permitted for use or sale pursuant to the Agreement, subject to the Concessionaire’s disclosure of same, and subject to the City’s rights contained in the Agreement (which City rights shall be superior to any rights or permissions granted to Concessionaire). The City will not limit Concessionaire’s ability to negotiate a reduced rate for purchase from any vendor whose product(s) Concessionaire uses or offers for sale or rent pursuant to this Agreement. Prior to entering in to any such agreements, Concessionaire shall provide the City with an itemized list describing any agreements or arrangements which may be imminently entered to or made. It shall also be Concessionaire’s sole responsibility and obligation to update such list/exhibit within thirty (30) days of a particular brand or product being added or deleted, as the case may be.
7. In addition to the items outlined above, Concessionaire shall implement an electronic and primarily cashless Point of Sale (P.O.S.) system to provide greater control and monitoring, which allows for revenue reports and trends analysis, streamlines the sales transaction process, allows for guest reservations, sets algorithmic pricing on luxury items and provides the City will full access to monitor revenues in real time. Concessionaire has agreed to invest a minimum of $250,000 during the initial renewal term, and any subsequent renewal term, to purchase, implement, maintain and support a P.O.S. system. Concessionaire further agrees to provide City with 24/7 access for real-time review, inspection and audit of all records.
8. Concessionaire has proposed re-allocating its existing security deposit in the amount of $68,652 as a $13,700 annual donation towards a Senior Night at the Bandshell for the next five years.
Miscellaneous Provisions
1. Concessionaire shall be permitted to offer modified pricing for Lummus Park, as contained in Attachment F (Lummus Park Pricing), as well as the proposed Muscle Beach location, as contained in Attachment G (Muscle Beach Pricing),
2. Concessionaire shall provide, within each Concession Area, the types and quantities of equipment, as contained in Attachment H (Equipment Inventory).
3. Concessionaire shall have the ability to utilize the Miami Beach Convention Center, subject to availability and authorization by the City Manager, to store Beach Equipment and Watersports Equipment in the event of a Hurricane or other similar storm related event. Concessionaire shall maintain private off-site hurricane storage facility in the event the Miami Beach Convention Center is not available or does not have sufficient available space to accommodate all Beach Equipment and Watersports Equipment.
4. Subject to the State of Florida’s designated turtle nesting season regulations, Concessionaire shall be permitted to set-up and breakdown Beach Equipment at sunrise and until sunset, respectively, provided that business may not be conducted until 1 hour after sunrise and within 1 hour before sunset daily.
5. In order to invest the additional capital outlined above, Concessionaire has requested an extension of the existing agreement, for a period of five (5) years, with options to renew.
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