HomeMy WebLinkAboutAgenda Statement 1988/01/19 Item 5COUNCIL AGENDA STATEMENT
• Item 5
Meeting Date - 9-$8
~ rovin an a reement with
ITEM TITLE : Resolution,~~~, apP g g
Charles Costa Enterprises for operation of
the Visitor Information Center
SUBMITTED BY: Deputy City Manager
REVIEWED BY: City Manager~(4/5th Vote: Yes No X )
The Bayfront/E Street Visitor Information Center has been
operated by Charles Costa Enterprises since July 30, 1987.
The current agreement, which expires January 30, 1988, was
for a six-month trial period. The short term of-.the
expiring agreement was intended to permit both the City and
Mr. Costa to evaluate the feasibility, desirability, and
appropriate provisions in a potential longer-term contract.
Staff and Mr. Costa have concluded that the results of the
trial period were satisfactory and we have negotiated a new
three-year agreement for Council's consideration.
RECOMMENDATION: That Council adopt the resolution
approving a three-year agreement with
Charles Costa Enterprises for operation
• of the Visitor Information Center.
BOARDS/COMMISSIONS RECOMMENDATION: N/A
DISCUSSION
At its meeting of June 17, 1987, the Council considered
three proposals for the on-going operation of the Visitor
Information Center, including a proposal from City staff.
After expressing some reservations about the potential
commercialization of the Center, Council directed staff to
attempt to negotiate a six-month contract with Charles Costa
that would permit the operation to beroved by the Council
months. The resulting contract was app
on July 14, 1987 and commenced on July 30, 1987.
During the six--month period in which Mr. Costa has operated
the Center, staff has monitored the operation in terms of
appearance, visitor promotion and public service. Based on
this review, staff has concluded that Mr. Costa's operation
provides a satisfactory balance of appearance/visitor
promotion/public service with low cost (and potential
revenue in the proposed contract) to the City and County.
Although staff continues to have some concerns about the
appearance and level of commercialization in the Center,
both the existing and the proposed new agreements do provide
• limits on the layout and the commercial activities. In
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• Page 2, item 5
• Meeting Date 1-19-88
terms of visitor promotion and public service, staff has
• found Mr. Costa's operation to be satisfactory, as described
below.
To date, staff has not received any complaints concerning
Mr. Costa's operation. Staff has also sent persons posing as
out-of-towners into the Center to evaluate the adequacy of
information provided, cleanliness of restrooms, politeness
of Center staff, etc. In each of these tests, the persons
sent to the Center reported that the service was good or
excellent and that all other aspects of the operation they
were asked to evaluate were acceptable.
During the six-month period of the existing contract, Mr.
Costa has operated the Center at a slight loss without even
considering the value of his own time. His highest monthly
gross sales amount during this period has been $5,500. He
has recently increased his retail stock, licensed his staff
to sell Mexican insurance, and started a hotel/motel
referral service. In addition, the new contract would allow
him to operate a portable hotdog stand in the exterior
vending machine area (see item 11 below). Mr. Costa
anticipates that these steps will make the operation
financially viable.
The provisions in the proposed new contract closely resemble
the current expiring agreement. The major differences
• involve rental payments to the City/County when gross sales
exceed $8,500/month (see item 2 below), a reduction in
City/County maintenance costs (see items 3 and 12 below),
and the addition of some allowable commercial activities
(see item 11 below). The terms of the contract are
summarized below.
1. Term. The term of the agreement is for three
years beginning on January 31, 1988.
2. Rent. Monthly rent will be assessed as follows:
a. No rental payment when monthly gross sales
total $8,500 or less.
b. Ten percent of monthly gross sales in excess
of $8,500 up to $11,500.
c. Fifteen percent of monthly gross sales in
excess of $11,500.
(The expiring agreement did not require any rental
payments.)
3. The operator shall be responsible for all interior
improvements and maintenance (In the previous
• contract, the City/County was responsible for up
Page 3, item 5
Meeting Date 1-19-88
to $1,000 in janitorial and restroom supplies per
6 months.) The City/County are responsible for
• exterior maintenance.
4. The operator is required to submit a statement of
gross sales each month, and the City has the right
to audit such statements.
5. The hours of operation will be at least from 8:00
a.m. to 6:00 p.m. on weekdays, and from 9:00 a.m
to 6:00 p.m. on weekends and major holidays. The
Visitor Information Center may be closed on
Thanksgiving, Christmas and New Year's Day.
6. The attached agreement includes guidelines the
.operator must follow in terms of the level of
staffing, capabilities of the Center staff and the
type of public information to be dispensed. In
addition, the contract emphasizes the importance
of the image portrayed by the operator to persons
visiting Chula Vista.
7. The operator shall maintain $1 million liability
insurance consistent with guidelines established
by the City Attorney's Office and the City's Risk
Manager.
8. Termination. The City may terminate this
• agreement at any time and for any reason by giving
the operator 60 days written notice. The City may
also terminate the agreement for cause by giving
the operator seven days written notice. In
addition, the City may terminate the agreement on
24 hours notice if the operator fails to maintain
the minimum operating hours established by the
contract.
9. The operator is prohibited from erecting or
creating any signs on the premises which are
visible from the outside without the City's
approval.
10. The operator must maintain a fully stocked
brochure rack for use by the public.
11 The level of commercial activities will stay as
. it currently is with the following exception:
A portable hotdog stand may be placed in the
exterior vending machine area. This stand
would include an ice cream container, a
refrigerator, a refrigerator freezer, a bread
rack and the hotdog container. Items to be
• sold include hotdogs, nachos, chips, cookies,
Page 4, item 5
Meeting Date 1-19-88
ice cream and cold drinks. This stand must
• be staffed at all times when the Visitor
Information Center is open, and it will not
impede pedestrian traffic through the Center
area.
12. The City is no longer responsible for reimbursing
the operator for costs associated with janitorial
and restroom supplies. However, the City will
cover all water utilities costs, which are
estimated to be approximately $600 per year. The
operator is required to pay the electricity costs
for operation of the Center.
FISCAL IMPACT: Adequate funds are available in the Bayfront
Trolley Station budget to cover the limited ongoing costs
associated with this contract. Other than exterior
maintenance, the only City/County cost required by this
contract is the estimated $600 per year for water.
•
•
Depending on the gross sales generated by the Center, the
City and County could receive revenue from the operation of
the Center. Although the Center has not generated more than
$5,500 per month in gross sales thus far, the Operator
anticipates substantial increases in sales in the future.
The City/County will receive 10~ of any gross monthly sales
in excess of $8,500 and 15% of any amount above $11,500.
For example, $16,167 in gross sales in a month would result
in a $1,000 rental payment to the City/County for the month.
MC:hr
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~~the City Council of
Chula Vista, Calif/ornla
Dated ~O