REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
January 9, 2024
FROM
BEAHTA R. DAVIS, Director, Regional Parks Department
SUBJECT
Title
Amendments to Revenue Lease Agreements with LandD Inc. for Concession Areas at the Calico Ghost Town Regional Park
End
RECOMMENDATION(S)
Recommendation
1. Approve Amendment No. 1 to Revenue Lease Agreement No. 17-799 with LandD Inc., for the continued operation of the Calico Lil’s Saloon concession at Calico Ghost Town Regional Park, which will amend the minimum monthly lease fee in which the County will receive lease fees of no less than $64,800 for the duration of the contract extension, effective October 1, 2022 through September 30, 2027 (Four votes required).
2. Approve Amendment No. 1 to Revenue Lease Agreement No. 17-798 with LandD Inc., for the continued operation of the Popcorn Wagon No. 2 concession at Calico Ghost Town Regional Park, in which the County will receive lease fees of no less than $6,000 for the duration of the contract extension, effective October 1, 2022 through September 30, 2027 (Four votes required).
3. Approve Revenue Lease Agreement with LandD Inc., to operate the Calico Sweet Shoppe concession at Calico Ghost Town Regional Park, in which the County will receive lease fees of no less than $30,000 during the initial five-year term, from December 20, 2023 through November 30, 2028, with two three-year options to extend the contract (Four votes required).
(Presenter: Beahta R. Davis, Director, 387-2340)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). Under Amendment No. 1 to Revenue Lease Agreement No. 17-799 for the Calico Lil’s Saloon concession, LandD Inc. (Concessionaire) will pay the Regional Parks Department (Department) a minimum monthly lease fee or percentage of gross income, whichever is greater, which gradually increases over the term of the lease as listed below:
1. October 1, 2022 - September 30, 2024: $1,000 or 8.25% of gross income, whichever is greater.
2. October 1, 2024 - September 30, 2026: $1,100 or 8.5% of gross income, whichever is greater.
3. October 1, 2026 - September 30, 2027: $1,200 or 8.75% of gross income, whichever is greater.
Under Amendment No. 1 to Revenue Lease Agreement No. 17-798, for the Popcorn Wagon No. 2 concession, the Department will receive a monthly minimum fee of $100 or 7% of gross income, whichever is greater, for the remainder of the amended lease term.
Lastly, upon approval of a new Revenue Lease Agreement for the Calico Sweet Shoppe concession, the Department will receive a monthly minimum fee of $500 or 8.5% of gross income, whichever is greater, for the initial five-year term.
The Concessionaire will also pay 3.5% of the monthly gross income per concession contract, as an advertising fee for promotion of the Calico Ghost Town Regional Park (Park). The Department will match the Concessionaire’s advertising fee payment equal to a minimum of one and a half times the 3.5% collected.
The Concessionaire will also submit a $1,000 security deposit following the execution of the new Revenue Lease Agreement to secure compliance with lease terms. Adequate appropriation and revenue have been included in the Department’s 2023-24 budget and will be included in subsequent recommended budgets throughout the life of the agreements.
BACKGROUND INFORMATION
The Department operates and maintains eight regional parks, including the Park, located in the unincorporated community of Yermo.
On October 17, 2017 (Item No. 25), the Board of Supervisors (Board) approved Revenue Lease Agreements 17-798 and 17-799 with the Concessionaire for the operation of the Popcorn Wagons and Lil’s Saloon at the Park, for the period of October 17, 2017 through September 30, 2022, and an option to extend both agreements for one additional five-year period.
Pursuant to the contract terms for Revenue Lease Agreement Nos. 17-798 and 17-799, the Concessionaire provided the Department with advance written notice of intent to extend and paid the required option fee of $500 for each agreement. At the time of the extension requests, the Department and Concessionaire were negotiating terms of a settlement agreement for the Calico House Restaurant. The Department was unwilling to process these amendments until terms could be agreed upon and the settlement agreement was executed. On December 19, 2023 (Item No. 82), the Board approved the Calico House Restaurant settlement agreement.
In accordance with the proposed lease amendments, the Concessionaire will continue the operation of Calico Lil’s Saloon and Popcorn Wagon No. 2 concession at the Park with a retroactive effective date of October 1, 2022. The terms of the amendments are for a period of five years each, but the agreement may be terminated earlier by either party for convenience with at least 30 days’ written notice.
The recommended agreement between the Department and Concessionaire for the Calico Sweet Shoppe has a five-year initial term commencing December 20, 2023. This agreement is retroactive due to an administrative error. The Department has identified and rectified the error to prevent its recurrence in the future.
Regional Parks requires four votes to lease park property for a concession due to Government Code section 25536. This item is being presented at this time as this is the first available date following the required operational, fiscal, and legal reviews.
Approval of all three agreements, Calico Lil’s Saloon concession, Popcorn Wagon No. 2 concession, and Calico Sweet Shoppe concession, aligns with the County and Chief Executive Officer goal and objective to operate in a fiscally-responsible and business-like manner by allowing the Department to leverage its amenities and land to raise revenue to support park maintenance and development.
PROCUREMENT
The Department released Request for Proposals (RFP) No. PARKS23-PARKS-4537 on April 1, 2023, for proposals for the management of Building No. 18, known as the Calico Sweet Shoppe Concession. The Department received one proposal from the Concessionaire. Following review of the proposal by Department management and County Finance, the proposal received from the Concessionaire was in line with the direction of the County and the Department. The Department is satisfied with the proposal for the operation of this concession and believe that the Concessionaire can provide a valuable service at the Park.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Suzanne Bryant, Deputy County Counsel, 387-5455) on November 20, 2023; Finance (Elias Duenas, Administrative Analyst, 387-4052) on December 14, 2023; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on December 19, 2023.