Title
Charlotte-Mecklenburg Government Center Restaurant Lease
Action
Action:
A. Adopt a resolution approving the lease of approximately 4,730 square feet of city-owned property at 600 East Fourth Street (parcel identification number 125-026-01) to Govt. Restaurant, LLC for the operation of a restaurant, and
B. Authorize the City Manager, or his designee, to negotiate and execute all documents necessary to complete the lease of the property.
Body
Staff Resource(s):
Phil Reiger, General Services
Gregory Crawford, General Services
Sheila Anderson, General Services
Explanation
§ Within the Charlotte-Mecklenburg Government Center (CMGC), there is approximately 4,380 square feet in the lobby reserved for restaurant operations and another 350 square feet in the basement for restaurant storage and a walk-in freezer (together, Restaurant Space).
§ Since 1999, this Restaurant Space has been leased and operated by Showmars, offering breakfast and lunch options Monday through Friday to occupants of CMGC and the general public.
§ The city issued a Request for Proposals (RFP) for the Restaurant Space on November 2, 2023; four responses were received.
§ Pita Boy, Inc. (d.b.a. Kostas Kitchen) best meets the city’s needs in terms of qualifications, experience, cost, and responsiveness to RFP requirements.
§ After selection, the owner of Pita Boy, Inc. established a new LLC, Govt. Restaurant, LLC, for the purpose of leasing the Restaurant Space and assigned the RFP rights to the newly established LLC.
§ Kostas Kitchen has decades of restaurant management experience and will provide continuity of operations during the transition, as well as continued employment of existing CMGC Showmars staff.
§ Lease terms include:
- Five-year term, with one option to renew for an additional five years;
- Rent in the amount of $2,502.96 per month in the first lease year, increasing at a rate of three percent per year;
- Kostas Kitchen will assume the remaining balance of the Promissory Note issued to Showmars in 2016 for restaurant improvements, with repayment being amortized over the life of the lease with a two percent annual interest rate, paid monthly.
- City will pay for water and electricity service, and Kostas Kitchen will pay for all other utilities and services, including gas;
- Kostas Kitchen will maintain and repair all kitchen equipment, including city-owned leasehold improvements such as the walk-in freezer and walk-in cooler;
- Kostas Kitchen will maintain and repair all the dining room furnishings, which are owned by the city;
- Restaurant will provide breakfast and lunch services Monday through Friday from 7:00 a.m. to 3:00 p.m., excluding city-observed holidays and building closures; and
- Menu will include healthy meal options, such as fresh fruits and vegetables, whole grain products, lean grilled meats, and other foods having one or more of the following characteristics: high fiber, low saturated fat, low calorie, natural or unprocessed, low sodium, and high nutrition value.
Background
§ In 1999, the city conducted an RFP for a restaurant at CMGC and selected Showmars. Following this selection, City Council approved a five-year lease for the Restaurant Space with one, two-year renewal option.
§ On December 13, 2004, City Council approved a 10-year lease with Showmars for the Restaurant Space with one five-year renewal option.
§ On June 13, 2016, City Council:
- Approved a five-year lease with Showmars for the Restaurant Space with one five-year renewal option;
- Authorized $150,000 for tenant improvements, which represented the city’s share of renovations to the Restaurant Space; and
- Authorized an advance of up to $95,000, which was Showmars’ cost share of improvements, with repayment amortized over the life of the lease at a two percent annual interest rate, paid monthly.
§ During the renovation in 2016, Showmars invested an additional $55,000 to replace kitchen equipment with newer, energy-efficient appliances.
§ For nearly 25 years, Showmars has been a dependable partner.
Charlotte Business INClusion
This is a Real Estate Leasing and Acquisition Contract and is exempt under the CBI Program.
Fiscal Note
Funding: Revenue from lease will be deposited into the General Fund
Attachments
Attachment(s)
Resolution