Memorandum 14-064 Lease Assignment on Lot 32 for Happy Face Restaurant

Memorandum 14-064

TO:                       MAYOR WYTHE AND CITY COUNCIL

FROM:                 LEASE COMMITTEE

THROUGH:        RENEE KRAUSE, CMC, DEPUTY CITY CLERK   

DATE:                  MARCH 21, 2014

SUBJECT:           RECOMMENDATION FOR A LEASE ASSIGNMENT ON LOT 32 FOR HAPPY FACE RESTAURANT

BACKGROUND

On March 21, 2014 during a special meeting of the Lease Committee discussion and review was conducted on a Lease assignment proposal from Yong Kim dba Lee & Kim, LLC  to lease  Lot 32 Homer Spit Amended also known the Happy Face Restaurant.

An excerpt of the minutes of the meeting follow for review of the discussions surrounding the recommendations.

B. Happy Face Restaurant Lease Assignment                                                                     

               1. Staff Evaluation & Recommendation

               2. Chapter 13.3 and Chapter 14- Assignments

HAWKINS/ZIMMERMAN – MOVED TO DISCUSS THE HAPPY FACE RESTAURANT LEASE ASSIGNMENT

Mr. Hawkins stated that he had a motion.

HAWKINS/MOVED THAT THE LEASE COMMITTEE MAKE A RECOMMENDATION TO HOMER CITY COUNCIL TO APPROVE THE ASSIGNMENT OF THE LEASE ON LOT 32, HOMER SPIT AMENDED TO YONG KIM DBA LEE AND KIM LLC WITH A TERM OF TWENT YEARS PLUS TWO FIVE YEAR OPTIONS, THAT THE LEASE ASSIGNMENT INCLUDE PERFORMANCE DEADLINES FOR THE PROPOSED LEASEHOLD IMPROVEMENTS AND THAT THE ANNUAL LEASE RATE BE NEGOTIATIED BY THE CITY MANAGER ON COMPLETION OF THE PROPERTY APPRAISAL.

There was a brief discussion on previous zoning violations and that the zoning has been changed to allow for overnight accommodations. The lessee responded to questions regarding insurance and financing will be completed upon receipt of the long term lease and deadline to close is expected the end of April.

VOTE. YES. HAWKINS, ZIMMERMAN, YAGER, LI.

Motion carried.

RECOMMENDATION: Approve the assignment of the lease on Lot 32, Homer Spit Amended to Yong Kim dba Lee and Kim, LLC., with a term of 20 years with two 5 year options that the lease assignment include performance deadlines for the proposed leasehold improvements and the annual lease rates be negotiated by the City Manager on completion of the property appraisal.