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Sparks City Council Meeting 9/14/2020 2:00:00 PM

Meeting Link: https://zoom.us/j/96712069902
Meeting Dial-in #: 669-900-6833 Meeting ID: 967 1206 9902

General Business: 9.9

Title: Consideration, discussion, and possible approval of an Addendum to the Agreement for Concessions at Sparks Marina Park with Goodwin-Huett Enterprises, Inc.
Petitioner/Presenter: John Martini, Assistant City Manager for External Services/John Martini, Assistant City Manager for External Services
Recommendation: Staff recommends City Council approve the Addendum to the Agreement for Concessions at Sparks Marina Park with Goodwin-Huett Enterprises, Inc.
Financial Impact: If City Council approves the Addendum, the City's rental income for concession services at Sparks Marina Park will be reduced by fifty percent, or $1,900.00, for calendar year 2020.
Business Impact (Per NRS 237):
    
A Business Impact Statement is not required because this is not a rule.
Agenda Item Brief:

Due to COVID-19, the beach at Sparks Marina Park has been closed for several months, and all events have been cancelled for the foreseeable future. As a result, the concession contractor at the Marina has experienced dramatically reduced sales. In light of the negative financial impacts, the contractor requested a temporary rent reduction of fifty (50) percent. If approved, this Addendum would grant that request.



Background:

In 2012, the City approved an agreement with Goodwin-Huett Enterprises, Inc., doing business as Goodi's Fresh Squeezed Lemonade (Goodi's), for concession services at Sparks Marina Park (Marina). That agreement was renewed in April 2020. Under the current agreement, Goodi's pays the City rent in the following amounts: $1,000.00 for Memorial Day through June 30; $1,800.00 for July 1 through July 30; and $1,000.00 for August 1 through Labor Day. The current agreement also contemplated prorating or cancelling rent if Goodi's was not able to open. 

On March 15, 2020, the City cancelled all special events through at least April 30, 2020, in order to slow the spread of COVID-19. No special events are scehduled at the Marina for the remainder of Goodi's operating season. In addition, the swimming beach at the Marina has been closed. These factors have had a signficant negative impact on Goodi's sales at the Marina. Given these financial difficulties, Goodi's contacted City staff and requested to amend the current agreement by reducing rent by fifty (50) percent for 2020. If approved, the proposed Addendum would grant that request.



Analysis:

Neither staff nor Goodi's knows when special events may safely resume. Staff anticipates that when events resume, attendance - and food and beverage sales - will be greatly reduced. In other words, staff anticipates that Goodi's revenue will be reduced for the foreseeable future.

Therefore, under Section A of the proposed Addendum, Goodi's rent obligations would be reduced by fifty (50) percent for 2020. In other words, Goodi's would be obligated to pay the City $500 for June, $900 for July, and $500 for August. As of the writing of this staff report, Goodi's has already paid the full rent payments for June and July. Therefore, Section B allows excess payments to be applied as a credit toward Goodi's future rent payments. Alternatively, if Goodi's does not extend the Agreement for 2021, Goodi's may request a refund of any excess payments. 

The term of the Addendum is through December 31, 2020, so Goodi's rent obligations will resume in full in 2021. In addition, either the City or Goodi's may terminate the Addendum for any reason with thirty days' notice. Terminating the Addendum would mean that the original Agreement would resume in full force and effect. 

Goodi's has successfully operated the concession business at the Marina for many years. Staff believes Goodi's continued operation at the Marina is in the best interests of the City and the public. Therefore, staff recommends approval of the Addendum.



Alternatives:

1. Council may approve the Addendum as proposed.

2. Council may reject the proposed Addendum and give further direction to the City Manager.



Recommended Motion:

I move to approve the Addendum to the Agreement for Concessions at Sparks Marina Park with Goodwin-Huett Enterprises, Inc.



Attached Files:
     Goodi's C-1311 Addendum.pdf
     Goodi's C-1311 Extension.pdf
     Goodi's C-1311.pdf

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