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09/28/1995 (2) ... r , \ .' .'. . . '. . , , . ].:"": ,." .. '. ',i'''' 'F'i' .!... . ". ,.. ,,'.;. . . ". . " .l,.. ,..... .~. " ..>. ., ..,....,.._,'JJr.~.:.,...:.. "."'~I'\:'~~'::~I~.I:~.'.T ...,.,T.~'.~I". .. ::~:... ........ ,.,C.::,.. . c, . ~T.w,\"-.'W".(' ...,...., .. .. '. .... c. . '.:.' .... .. ,'c. ,..... .......,.. '".' '... . !J:tri~l.l,I". ~ ..~,." .' . c. . :':.. :. . I .. " . ".<' .. . ~ . .,,! ';" l.~ .j.~ .~ I ,. WORKSESSION City Commission Worksession Minutes ) . c Date ~ -1~ 2-0 3 . . .. '. " . ~ . . . . . . . . V. 'r ~ . 'f~~>."' '.~ ',; ;~ ~./~'[>' ~. c ~?::..:. :.r. ~ SPECIAL WORK SESSION CITY OF CLEARWATER September 28, 1995 Present: Rita Garvey Sue A. Berfield Fred A. Thomas J. B. Johnson William Justice Elizabeth M. Deptula William C. Baker Kathy S. Rice Richard Hull Cynthia E. Goudeau Patricia O. Sullivan Mayor/Commissioner Vice-Mayor ICommissioner Commissioner Commissioner Commissioner City Manager Assistant City Manager Deputy City Manager Assistant City Attorney City Clerk Board Reporter The meeting was called to order at 9:02 a.m. at the Clearwater Beach Recreation Center for the purpose of discussing Pier 60 concession stand proposals. The City Manager announced there was a late bid which is not presently listed. She stated, if they file a protest, the Commission will be notified, No final decision is being made today. She stated, before they start the presentations, there is a need to establish the criteria and what weight they will carry. {;JJ,l.t~ '>l~ Commissioner Thomas requested each Commission member state who may have lobbied them in this regard, All Commission members indicated no one had lobbied them regarding the Pier 60 concession stand. After some discussion, the criteria and ranking of same was determined as follows: 1 ) Quality of service and economic return, two separate criteria, but considered to be of equal weight; 2) References and reputation; 3) Environmental awareness; 4) Past experience. The City Manager indicated, based on the presentations, the Commission would rank each bidder. Calculations would be made and would be presented to the Commission at their Monday work session. Ha1)1i1ton Family Proposal Ed Armstrong, attorney representing the bidders, stated this is actually a joint venture between the Hamilton family and Checkers Restaurants. He indicated the Hamilton family has the most experience in beach operations. He stated, regarding the criteria and the RFP, they provide the greatest overall economic return, have the fullness of resources to operate the concession stand, and have vast prior experience. Mr. Armstrong reviewed the prior experience of the Hamilton operations on the beach. He stated, overall, they have been good neighbors and have been at the beach pavilion since 1 964. He stated they have also operated the Clearwater Inn since 1 988 and it is a clean, comfortable hotel. He stated, both the Hamilton's and the Browns, the owners of Checkers, are pillars in the community. Mr. Armstrong indicated Checkers Restaurants operate in 23 states, and no one does it \--' mwssp09.95 09/28/95 .. ., \.' . . .. ~ .' . J . . .' t .. ...'. . : ~I:I:\~ t'....." . " ty,... , 1t~."~(:J . ~I.< ':'::". ' . . .' . ';" "\ 1"'""\ better that is on the bid list. He stated they plan to offer a limited Mexican menu as well, which will be a brand new product on the beach. He stated people are more comfortable with businesses they know. He felt having the Checkers name attached to the beach concession will guarantee greater sales. Mr. Armstrong stated, considering the overall economic return to the City, the Commission should not just consider the minimum rent. He stated the Hamilton's will be willing to also renovate the south beach pavilion into the tropical seascape theme. That benefit should be added to the rent figure. He stated, when the pavilion bid expires in five years, whoever gets the new bid will also get the improvements. He stated storage will not be necessary if the Hamilton's are awarded the bid and that will be a saving for the City. He stated all but one of the bidders has agreed to maintain the restrooms. He felt, due to Mr, Turner's bid not accepting the responsibility, that should be deducted from the . rent revenue from that bid. He stated the Commission needed to choose the bidder that was most likely to generate the highest return. Referencing the bids by City departments, Mr. Armstrong indicated the Engineering proposal does not use valid numbers and the Marina Department's proposal has inadequate staff and other unrealistic items. Regarding quality of service, Mr. Armstrong indicated Checkers has done a survey in six different markets. This survey found Checkers to be number one in taste, value and quality in four of those markets. This is in comparison with McDonald's and other similar businesses. t,:~::) Mr. Armstrong ended his presentation by saying, if this bidder is chosen, it will succeed. Others do not have the depth and breadth of this bid. Commissioner Justice questioned if this operation could go forward without the Checkers involvement. Mr. Armstrong indicated it could, but Checkers wants to be a part of the operation, Commissioner Thomas questioned if the business would be owned equally. Mr. Armstrong indicated it would be a joint venture, in essence, a general partnership. Commissioner Thomas questioned what Checkers brings to the bid. Mr. Armstrong indicated advertising, marketing strength, and less of a learning curve. Commissioner Thomas questioned if a Checkers sign would be required. Mr. Armstrong indicated it would be preferred. but not required. In response to questions from Commissioner Thomas, Jerry Brown indicated Checkers has been recognized as number one in quality, speed, taste and value. He stated it has been proven that branded products guarantee more sales. Checkers is a recognizable name for which customers will be looking, He stated this will directly benefit the City. Commissioner Thomas questioned Mr, Brown's employment with Checkers, Mr, Brown indicated he was a member of the board, .-.,./ mwssp09.95 2 09/28/95 . ' . ~ '. ." , . " . .' t ~, . ~. , ~r::.::.'.". . ; '; . .~ Commissioner Thomas expressed concerns regarding Checkers' finances in the past 18 months. He questioned what would happen to the joint venture should Checkers go Chapter 11. Mr. Brown indicated Checkers is very solvent and the joint venture is something about which Checkers is very excited. He stated, if the City Commission does not want Checkers as part of the venture, it is willing to back out. Commissioner Thomas again questioned the legal ramifications if one partner winds up in Chapter 11. Mr. Armstrong indicated, if a business files for Chapter 11, they continue to operate and it is transparent to the consumer. He stated, if the Commission concurs, in the event either party files, the other party can come in and assume all liabilities. Commissioner Berfield questioned their environmental sensitivity. Mr. Armstrong indicated they would be happy to meet that requirement. In answer to a question, the City Manager indicated the value of the land is $118,000. Commissioner Thomas stated he felt it was grossly underestimated. ' The Commission recessed from 9:50 to 10:00 a.m. Pier 60 Concession .::) Steve Chandler, owner of the Beach Diner, stated his is an example of commitment to the community. He stated his bid is the best one on the table and offers the most financial return to the City. He stated it will be a City project. Steve Romin, attorney, Mr. Chandler's brother-in-law, handed out a booklet regarding Pier 60 Concession Proposal. He stated the numbers by staff are unrealistic. He stated the average daily rental of 28 umbrellas per day is extremely low. He stated, because they knew rentals would be important, they went out and counted umbrellas on the beach. He stated the highest was 111 and the lowest day was 51. He stated September is one of the slowest months. He submitted a video tape they had made regarding everything on the beach. He stated the Pier 60 concession bid is the only one that splits with the City 50/50 every dollar that comes in. He stated, when the umbrella proposals are taken into account, the apparent gap between the bidders closes. He stated the Chandler bid is unique, in that it offers a vision of exactly what they expect to do. Mr. Romin distributed shirts proposed to be part of the uniform worn by staff at the concession stand, He stated this will provide a team appearance with a simple, clean image. He sated they will also be visible and plan to provide services for lost children, a lost and found; and for people just needing assistance. He said there will also be a safety zone provided. He stated this is a closed proposal and Mr. Chandler is the only one who gave his total proposal from the beginning, He stated they propose promotional tie-ins, such as the "trolley twirl" ice cream cone with a trolley token. He stated these types of promotions are endless. , ....) mwssp09.95 3 09/2B195 . . .. . . . . . ~ '. ".... ... %~',:.:':.'... . ;:l, . ." " 'J Regarding the bids by the two City departments, it was indicated the concern was, if the City runs the business in competition with tax moneY', the City will have a greater liability exposure. Mr. Romin stated two of the bidders are from out of town he emphasized Mr. Chandler is at home in Clearwater and already operates the Beach Diner. Commissioner Berfield questioned their environmental efforts. Mr. Chandler indicated they will do everything to recycle what they can and will continue environmental efforts in every way possible. Mr. Baker expressed concerns regarding the limitation of the area in which they could rent umbreUas, Mr. Romin indicated they were aware there are no umbrellas in that location now and they had to count in the south beach area. Mr, Baker said he wanted to make sure they know they are limited to the 1,000 foot area. Mr, Romin indicated they were aware of this. Commissioner Thomas questioned if the City had ever audited the south beach concession, Ms. Deptula indicated she did not know if it had been done recently, but she knows the City does receive audited statements. Commissioner Thomas questioned if the City had eyer counted the people using umbrellas. Ms. Deptula indicated she could not say. Commissioner Thomas recommended establishment of a strong audit procedure. The City Manager indicated one probably already exists in the contracts, '.J The meeting recessed from 10:25 to 10:37 a.m. Pier Pavilion of Cle~rwater (Alexander) .\, Stephen Thacker representing Mr. Alexander stated quality of service is tied to the number one factor of economic return. He stated people will go to the beach but how they are treated will be part of their impression of Clearwater, He stated Mr. Alexander operated a concession on the beach from. 1961 until recently, The quality of service has been outstanding with no complaints. He stated the relationship between the vendor and City staff is part of the quality of service. He stated Mr. Alexander has always willingly agreed to the City's request. He stated Mr. Alexander also provides community services having established a policy of lost and found and on injured birds. He stated Mr. Alexander has a track record of outstanding quality of service. Mr. Thacker also reported that during Mr. Alexander's operation of the concession stand over the last 11 years, the average revenue to the City was $111,233.76. He stated Mr, Alexander did not complain regarding the drop off in the business during the Pier 60 construction. He disagreed with the optimistic estimate for umbrella rentals presented by the previous bidder. He stated that City staff is on the list of references for Mr. Alexander and that he has an excellent reputation as a concessionaire. v mwssp09.95 4 09/28/95 '- . \ . ,. ;. < ..' .' J . .. ..' I I W;.~.'" :'-'" I (''''k> ''''UT . .....,) ... ':r- Regarding the environmental issues, he said Mr. Alexander is willing to comply with any request regarding that. Regarding Mr. Alexander's past experience Mr, Thacker indicated Mr. Alexander has done this for 34 years and does not wish to retire. Mr, Thacker emphasized whoever is selected will be an ambassador of Clearwater and the public and visitors will be effected by their experience with the concession stand. He stated the City needs a good ambassador. Commissioner Thomas questioned the management team. Mr. Thacker indicated that in addition to Mr. Alexander, Jim Alexander, Mr. Alexander's son, will be working full time in the business. Regarding the portion of the proposal that calls for Mr. Alexander having the right to select a CPA, Mr. Thacker indicated that was from previous leases and there was no other thought given to that provision, He stated if the City wants something different they will be willing to accommodate. He stated an audit was done on the lease every year and payments were always made in a timely manner. He stated, regarding financial backing, the day the lease is signed an additio'nal $100,000 wlll be placed in the company to buy equipment lien free. Commissioner Thomas again questioned the value of the land. Mr. Baker indicated if compared to the price paid for the Standrich Property it would be about a million, but that was not a real estate appraisal. Commissioner Thomas stated there was not a more valuable piece of property on Clearwater Beach. Eogineering Department. Pier 60 Grill Rich Baier and Tracy Bruch of the Engineering Department presented the bid. Ms. Bruch indicated the initial thought was that the parking system employees are out on the beach every day and they saw this as a tremendous revenue source for the City. Mr, Baier indicated this was a team approach with Ms. Bruch, Margie Simmons of the Finance Department, and Cindy Mayberry in the Engineering Department, a past restaurant manager. He emphasized 100 percent of the net revenue will go to the City with no middle man. The Engineering team will directly reflect the City goals and values, those being public safety, economic development, and tourism with excellent customer service. He stated this revenue stream could be earmarked for tourism infrastruct~re on the beach and aesthetic projects. He stated the City would be promoted on the utensils, cups, and plates. He stated it could also serve other functions such as change machines, etc. He believed the opportunities are endless. Mr, Baier indicated the numbers presented by staff are based on prior receipts of the Pier Pavilion. He stated they did their research and their proposal is conservative yet aggressive. Given the design of the building it is not a place where people will come and just get food. He stated people will want to use the building to enjoy the City's most valuable asset, the Beach. Ms Bruch explained the financing and stated the gain to the City in the first year would be $386,900. Mr. Baier indicated the income from cabana and umbrella rentals would be $28,000, mwssp09.95 5 09/28/95 . '. .' I . . - . .' L " . + . L.. f M~~<;... . ,'"' Mr. Baier indicated there would also be value to some of the intangibles the City Department could offer. He stated this City Department will avail itself of all programs to put forth the best management program. They will also propose environmental aspects such as a dry retention swell and no grease traps and inline insinkerator. He stated turtle friendly lights wourd also be installed, He stated they believe a City Department can best manage, maximize returns, and present the values the City wants to display. Commissioner Justice questioned how the City Department would be able to run the concession stand. Mr. Baier indicated that a member of the team is a restaurant manager and would absorb the work load. Ms. Bruch indicated they would be hiring a full time manager. Commissioner Thomas questioned the expenses for the umbrella rentals. Ms. Bruch indicated that included 100 umbrella, 50 cabanas, 300 chairs, and the equipment to get the items onto the beach. Commissioner Thomas requested clarification regarding the terminology and questioned the umbrellas being separate from cabanas. The Chandler proposal is all umbrellas. The Hamilton's indicated that cabanas are put out during cooler months and they rent one for six months and the other for six months. Commissioner Thomas questioned how many rentals there would be per day. Mr. Baier indicated the City's rental rate would be lower but, was not sure he agreed with the number presented by previous presenters. Commissioner Thomas stated the concession should charge what the market would bear. (.....'\ ',~f 'Commissioner Thomas questioned proposed food costs. Ms. Bruch indicated it included inventory for sundries and food and packaging would be separate. She stated they believed this to be a valid projection. Commissioner Thomas said he was trying to find what the food would cost, Ms. Bruch indicated the expenses are all grouped together. Commissioner Johnson questioned the operation of the grill by the present staff. Mr, Baier indicated management of it would be by present staff not the operation. He stated they would hire 1 full.time and 1 part~time manager and 11 part-time staffers, Commissioner Berfield questioned the umbrella rental rate. Ms. Bruch indicated initially they had not included that in the bid and they don't have the prices set. She stated the City would not set prices lower than others doing business on the beach, Commissioner Justice expressed concern regarding the City assuming all the liabilities. Mr. Baier point out it would also reap all the profits. Commissioner Thomas stated, if the Chandler numbers were used on the City proposal, there would be $365,000 profit coming to the City, Marina Proposal Bill Held, Harbormaster, stated their concept Is different. He stated the concession will become a division of the Marina Department. The proposal is to operate for 5 years and if the City is satisfied with the operation they would then ask for another 5 year lease. He , .. ......) mwssp09.95 6 09/28/95 8'~;)' . ~:~.:.,;,r...' . ,~ stated they would hire 8 full~time equivalents and a supervisor. He stated if gross sales are over $650,000 an additional employee would be hired. Mr. Held reported he prides himself in customer service. He stated the Marina operates Pier 60, which has an 87% good to excellent rating, He recommended that whoever gets the concession should also get the umbrella rentals. He felt the revenues should be used for future development of the site, maintenance, and repair, He reported the Marina has operated Pier 60 fishing pier since 1983 and already sells hot dogs, sandwiches, and rents equipment, He stated it is a 24 hour a day, 7 day a week operation, They have an excellent accountability of revenue. Revenue projections range from $620,100 to $236,725. He stated the prices for the food would be based on a survey of other beach establishments, He stated salaries for the concession would be based on merchandise sold. This would also be a safe area as are all the Marina facilities. Gas appliances would be used and as best as could, recycled products would be used. Mr. Held reported for the umbrella concession the Marine Department already has a storage area, He stated they proposed 100 umbrellas, 50 cabanas, 200 chairs, and a tractor trailer to move the items. The revenue projected from the umbrella concession range from $30,000 to $130,000. He stated the projected return to the City is a conservative figure and he believes the revenue will actually be better. He stated if they get the concession they will do a good job. I..r"..\.~ ..../~(: Mayor Garvey expressed concern if the Marina did not have beach guards additional funds would have to come out of this. Mr. Held indicated he thought if the umbrella concession uses the old beach guard building there should be some compensation' to the parking fund. Mayor Garvey stated moneys are needed for tourist promotion. She questioned their experience running a concession stand. Mr. Held indicated they do operate Pier 60 with a supervisor and do have experience. Commissioner Thomas questioned the margin indicating that they are projecting $412,000 in retail sales with $290,000 in cost at 75% food cost. Mr. Held indicated they have included everything they would use including cups, plates, etc. Commission Thomas expressed concern regarding the numbers stating something did not compute. Commissioner Thomas questioned an interfund transfer of $10,000. Mr. Held indicated that they always charge an enterprise fund for management of the concession. The meeting recessed from 11 :50 a,m. to 1 :05 p.m. Gus Saravanos Proposal Mr, Saravanos indicated he had been a Clearwater resident for 1 5 years. He stated for the last 40 years he has been in the restaurant business, one in Zepherhills, Florida and one in Flushing, New York. He stated he proposes outside seating with picnic style benches. y mwssp09.95 7 09/28195 I . ' ~ ... , ,. ' . . ", . ,," . ~';:'~t:..... '. :;,;' .-., He stated his restaurants have been known for their fine food and that nice items will be on the menu, such as grouper sandwiches, fried shrimp and clams, and calamari. He stated he will also offer at least three kinds of salad. He stated he can start anytime working with the City and welcomes suggestions to make the proposal better. He distributed menus from the two restaurants, Commissioner Thomas questioned Mr, Saravanos guaranteeing $115,000 a year to the City. Mr. Saravanos indicated he would guarantee that. Commissioner Berfield questioned weather he would be using environmentally sensitive products, He indicated he would, Commissioner Garvey expressed concern regarding there being so little information. she was not sure exactly what was being proposed. Commissioner Berfield questioned if there would be any inside seating. Mr. Saravanos indicated there would not be. The meeting recessen from 1: 14 to 1 :25 p.m. Turner Proposal ..;.;(jl", t,,~:1 Charles Turner, Jr. indicated he has been in the restaurant business for 20 years. He stated he has 6 units 12 full service food courts, an ice cream, snack bar, and sports bar). He stated he had a beach concession in Sarasota County, in which he replaced the entire kitchen to better servlc'e people. He increased sales by 1 5 % and commission to the County by 30%. He stated he is very good at doing beach concessions. He felt it was important Clearwater be happy with the operation. He stated he envisions breakfast, lunch, and dinner but did not envision sit down type diners. He stated he would be open for business when ever warranted. He stated they would not be there to take away business from any other restaurants. If awarded the concession he would put in new equipment. He stated he is prepared to bring in a food service design company to review the plans, Regarding a souvenir shop he indicated he is already doing business with the people with whom he would need to do business. He felt he could make the concession successful and proposed a separate ice cream parlor. His proposed economic return to the City would be a guaranteed rent of $144,000 a year, also 10% of sales over $300,000 with an additional 2% for sales over $800,000. He stated he has asked for exclusivity in the contract and that was because he saw a lot of vendors on the sidewalk. He stated he is a hands on manager and pays close attention to the business, He stated his goats are to increase sales from 5% to 10% per year and provide more revenues on a early basis. He stated he would join the Chamber and support community activities. Commissioner Johnson questioned weather he was presently renting cabanas and umbrellas, He indicated he was. t...) mwssp09.95 8 09/28/95 ,~ .. ~ .'. I . . . . . . ; , . .~~.<, 1~~'~i: . \) .. , .~~~r?,;~;:".~/.,~~.:,"::L:::::i\;.::i::/ ::;:j.:~.: ;'::~ :<:..:::..~;:' .~::.~',:.,.. ..:." .' '. ,1.> . . .,.\;;'; '.. ' ... I . ':: ' .:' .".. ': ~.:": \J~:'~:~A~ .,' , ......".r, Commissioner Berfleld questioned his sensitivity to environmental issues. He indicated he would do whatever the City wants within reason. He stated cleanliness and neatness is Important to him inside and out of the facility. ~, Ii Mr. Baker stated in the proposal it included caveats regarding bathrooms. He questioned if Mr. Turner felt this meant to 2 restrooms 100 ft on either side and indicated that this facility will have it own restrooms. Mr. Turner indicated he would maintain the ones in the facility. He said he did not want to get involved in the maintenance business but had no problem with bathrooms on-site for staff and employees. Mr. Turner stated he prepared a matrix comparing the proposals. Commissioner Berfield questioned if the rentals are an integral part of the proposal. Mr, Turner said they are an important part of the package and believed his proposal was the best for. the City. Ms. Deptula suggested this item be added to the end of the Work Session on 'Monday for the Commission to decide how to proceed. She requested the Commission leave their evaluation sheets and their rankings would be calculated. She questioned if the Commission wished to maintain the scheduled CPR class currently listed at the. end of the Work Session. Consensus was to cancel the CRP class. The meeting adjourned at 1 :48 p.m. o > ~ mwssp09,95 9 09/28/96