AgdaPkt 2010-08-23 - Laserfiche WebLink

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6.1 F REP�RT To the Honorable Mayor and City Council and The Redevelopment Agency Board '� From the Ci Mana er and Executive Director August 23, 2010 SUBJECT Courthouse Square Vendor Kiosks-Amendments to Froyola Yogurt Lease and License Agreements RECOMMENDATION 1. Authorize, by motion, the Redevelopment Agency to amend a lease with Froyola LLC doing business as "Froyola Yogurt" for Lease Area 2A in Courthouse Square. 2. Authorize, by motion, the City to amend a license with Froyola LLC doing business as "Froyola Yogurt"for License Area 2A in Courthouse Square. BACKGROUND In November 2009, the Agency Board and City Council approved a Lease and License Agreement for Froyola LLC doing business as Froyola Yogurt to occupy a kiosk in Courthouse Square to sell frozen yogurt. At the time of the Agreement approvals, the anticipated opening date was April 2010. Due to personal family matters and the physical limitations to layout the tenant improvements that meet both the County of San Mateo Health Department and City regulatory requirements within the small 191 square foot kiosk, Froyola Yogurt has not opened. Specifically, the San Mateo County Health Department required a three compartment sink and other fixtures that had to be custom made because of the space limitations of the kiosk. The countertops and equipment had to be reconfigured to meet the Americans with Disabilities Act. Although the width of the entrance door is 34 inches, Froyola is required to have a 36 inch width for its employees to move within the kiosk. Additionally, in order to accommodate all necessary equipment, the Agency upgraded the electrical load from 100 amps to 150 amps. Froyola LLC is committed to opening Froyola Yogu�t but the delays described above and the overall start up cost of$104,000 ($83,000 tenant improvements and equipment and $21,000 food products, materials, marketing, first month payroll} are prompting Froyola LLC to request a rent modification. Froyola LLC has selected a contractor. Assuming the contractor starts construction by the end of August, the current expected opening date is October or November 2010 (six to nine weeks construction schedule). Since Froyola's kiosk is located in the rear of the pavi[ions, which is not as visible as tr�e kiosks fronting Broadway, the Agency Board had approved a lower than market rate rent of $400 per month. Due to the decrease in the current market rate rents and high tenant improvement costs, a reduction of rent from $400 to $330 per month is proposed.