Title
Resolution authorizing the execution of Three Leases among the City of Hampton and Hampton Watersports LLC and Virginia Beach Watersports LLC for the purpose of conducting watersports activities and concession services at the following locations:
A. Mill Point Park, designated as a portion of LRSN 2003201. Specifically:
1,875 square feet (15’ x 125’) - (the “Dock”);
192 square feet (12’ x16’) - (the “Concession Facility”);
180 square feet (12’ x 15’) - (the “Storage Area”); and
the non-exclusive right of access to 534 River Street, Hampton Virginia, portion of LRSN 2003323 consisting of 6,600 square feet (55’ x 120’) square feet (the “Launching Area”)
B. Buckroe Beach. Specifically:
40,200 square feet variable width on the public beach - (the “Beach”);
1,500 square feet (30’ x50’), LRSN: 12007407- (the “Concession Facility”); and 500 square feet (10’ x 50’), LRSN: 12006702 - (the “Storage Area”)
C. Blue Bird Gap Farm, designated as a portion of LRSN 2000012. Specifically:
1,500 square feet (30’ x 50’)-(the “Concession Facility”);
4,200 square feet - (the “Dock”) including a 10’ x 10’ storage facility
Purpose
PURPOSE/BACKGROUND/DISCUSSION:
On January 6 2017, the City of Hampton received an Unsolicited Proposal from Virginia Beach Watersports LLC for the purpose of providing watersport rental activities and concessions at three park sites in the City. Under the terms of the lease, the Tenant, which is now Hampton Watersports LLC and Virginia Beach Watersports LLC, collectively, will pay a percentage use fee for the use of each location. The locations and terms are as follows:
A. Mill Point Park for offering water sports opportunities such as the rental of jet-skis, up to two (2) Fourteen foot (14’) to sixteen foot (16’) boats, paddleboards, kayaks; the offering of water sport lessons; and for the provision of retail sale of items such as food, beverages, sunscreen, water and beach towels and other related beach sundries in the Concession Facility and storing necessary equipment in the Storage Area, specifically in the following areas:
• 1,875 square feet (15’ x 125’) - (the “Dock”);
• 192 square feet (12’ x16’) - (the “Concession Facility”);
• 180 square feet (12’ x 15’) - (the “Storage Area”); and
• The non-exclusive right of access to 534 River Street, Hampton Virginia, portion of LRSN 2003323 consisting of 6,600 square feet (55’ x 120’) square feet (the “Launching Area”)
The Tenant agrees to pay the City an annual fee of:
• Three percent (3%) of gross sales year-one 2017 not to exceed $2,680
• Four percent (4%) of gross sales year-two 2018 not to exceed $6,000
• Five percent (5%) of gross sales year -three 2019 not to exceed $8,000
• Six percent 6% of gross sales year-four 2020 not to exceed $10,000
• Seven percent (7%) of gross sales year-five 2021 not to exceed $12,000
B. Buckroe Beach for offering water sports opportunities such as the rental of jet skis, paddle boards, kayaks; the offering of water sports lessons; and for the provision of retail sales items such as food, beverages, sunscreen, water and beach towel and other and other related beach sundries in the Concession Facility and storing necessary equipment in the Storage Area specifically in the following areas:
• 40,200 square feet variable width on the public beach - (the “Beach”);
• 1,500 square feet (30’ x50’), LRSN: 12007407- (the “Concession Facility”); and 500 square feet (10’ x 50’), LRSN: 12006702 - (the “Storage Area”)
The Tenant agrees to pay the City an annual fee of:
• Three percent (3%) of gross sales year-one 2017 not to exceed $4,000
• Four percent (4%) of gross sales year-two 2018 not to exceed $6,000
• Five percent (5%) of gross sales year -three 2019 not to exceed $8,000
• Six percent 6% of gross sales year-four 2020 not to exceed $10,000
• Seven percent (7%) of gross sales year-five 2021 not to exceed $12,000
C. Blue Bird Gap Farm for offering water sports opportunities such as the rental of paddleboards, kayaks, and canoes; the offering of water sport lessons; and for the provision of retail sale of items such as food, beverages, sunscreen, water and beach towels and other related beach sundries in the Concession Facility and for storing necessary equipment in the Storage Facility and designated as a portion of LRSN 2000012 specifically:
• 1,500 square feet (30’ x 50’)-(the “Concession Facility”);
• 4,200 square feet - (the “Dock”) including a 10’ x 10’ storage facility
The Tenant agrees to pay the City an annual fee of:
• Three percent (3%) of gross sales year-one 2017 not to exceed $2,680
• Four percent (4%) of gross sales year-two 2018 not to exceed $6,000
• Five percent (5%) of gross sales year -three 2019 not to exceed $8,000
• Six percent 6% of gross sales year-four 2020 not to exceed $10,000
• Seven percent (7%) of gross sales year-five 2021 not to exceed $12,000
Each lease is renewable for up to five (5) years. The City will provide electrical hook up to each site, except for the Mill Point location. All other amenities including concession stands and storage will be provided by the Tenant.
City staff recommends approval of the Resolution.
Impact:
Estimated revenue from percentage use fee will include: Year One - up to $15,360; Year Two - up to $27,000; Year Three - up to $36,000; Year Four - up to $45,000; and Year Five - up to $54,000; plus amusement and sales tax from total gross sales each year.
Recommendation:
Rec
1. Conduct a Public Hearing
2. Approve the Resolution.
Body
WHEREAS, the City received an unsolicited proposal from Virginia Beach Watersports LLC for the purpose of providing watersport rental activities and concessions at three park sites in the City, namely, Mill Point Park and 534 Back River, Buckroe Beach, and Blue Bird Gap Farm;
WHEREAS, city staff negotiated lease terms with Hampton Watersports LLC and Virginia Beach Watersports LLC, collectively, who will pay a percentage fee for the use of each location for an initial term of one year with four additional one year renewal terms; and
WHEREAS, the Council has determined that the terms and conditions of each of the three leases attached hereto are acceptable.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Hampton, Virginia, that it approves the leasing of the following city properties:
A. Mill Point Park, designated as a portion of LRSN 2003201. Specifically:
1,875 square feet (15’ x 125’) - (the “Dock”);
192 square feet (12’ x16’) - (the “Concession Facility”);
180 square feet (12’ x 15’) - (the “Storage Area”); and
the non-exclusive right of access to 534 River Street, Hampton Virginia, portion of LRSN 2003323 consisting of 6,600 square feet (55’ x 120’) square feet (the “Launching Area”)
B. Buckroe Beach. Specifically:
40,200 square feet variable width on the public beach - (the “Beach”);
1,500 square feet (30’ x50’), LRSN: 12007407- (the “Concession Facility”); and 500 square feet (10’ x 50’), LRSN: 12006702 - (the “Storage Area”)
C. Blue Bird Gap Farm, designated as a portion of LRSN 2000012. Specifically:
1,500 square feet (30’ x 50’)-(the “Concession Facility”);
4,200 square feet - (the “Dock”) including a 10’ x 10’ storage facility
and, accordingly, the City Manager or her authorized Designee is authorized to execute and deliver to Hampton Watersports LLC and Virginia Beach Watersports LLC, VHS the leases in substantially the same form as hereto attached.
Adopted at the regular meeting of the City Council of the City of Hampton, Virginia, held on March 22, 2017.