From
Megan Mahan
Title
Resolution authorizing an Economic Development Agreement and Five-Year Tenant Lease with Option to Renew for one Five-Year Term with Alchemy Events, LLC, for the Construction and Operation of a Restaurant at 321 Main Street
Presenter
Marty Wieder, Economic Development Director
Recommended Action
Approve
Analysis
Grand Prairie has made significant investments to revitalize our downtown area in the past few years with restoration of the Uptown Theater, development of a new Market Square, additional parking, working with building owners to create new facades, rebuilding sidewalks, and improving drainage. Adding to this focus on the downtown area, the City constructed a new Fire Station on the north side of Main Street. It provided a modern facility that serves the fire and EMS needs of the area. Grand Prairie Fire Department occupied the new Fire Station in the Fall of 2014, and the previously occupied 1950's era Fire Station has remained vacant.
To continue revitalization efforts in our downtown and attract more people into the area, the City desires to repurpose the old Fire Station as a restaurant. Staff prepared a Request for Qualifications (RFQ) and invited potential restaurant owners/operators to consider partnering with the City and promoting the viability of the downtown area as a destination. The RFQ was issued in April 2017, the City received four formal proposals, and three were selected for further investigation, negotiation, and interviews. Based on this process, staff recommended ALCHEMY EVENTS LLC as the tenant/restaurant operator who best fit the City's requirements.
ALCHEMY EVENTS LLC owners are experienced restaurateurs currently operating several venues in Los Angeles, CA. ALCHEMY EVENTS LLC president is Jason Alan Smith and vice-president Carlee Smith. Together, the two owners have a combined 10 years of experience in the food and event industry.
City staff negotiated an Economic Development Agreement with ALCHEMY EVENTS LLC to renovate the old Fire Station as a restaurant and to outline the process that the building may be purchased from the City. Under the Agreement, the City would hire a general contractor to renovate and remodel the old Fire Station, purchase furniture, fixtures, and equipment, and add an outdoor lawn area to repurpose the site as a restaurant and would spend $1,800,000 with $200,000 in contingency. ALCHEMY EVENTS LLC would provide an additional $78,000 toward the project during the Construction. The $78,000 is non-refundable once it has been spent. ALCHEMY EVENTS LLC would have the right to purchase the building and associated property for the Dallas Central Appraisal District’s appraised market value as determined prior to the date of issuance for the Full Certificate of Occupancy.
ALCHEMY EVENTS LLC would be required to directly oversee the management of the restaurant operation for the duration of the lease period.
Concurrently, a separate five-year Lease Agreement (Lease) would be executed with ALCHEMY EVENTS LLC as the tenant. The Lease would require ALCHEMY EVENTS LLC, to operate a restaurant with bar service open for lunch and dinner, six days a week. Rent would be calculated at 10% of food, mixed beverage, and catering capped at $81,375 annually. The City would give the tenant a 180-day grace period from the date the Full Certificate of Occupancy (CO) is issued before rent would commence in order to firmly establish the restaurant. The tenant would pay all costs for building and equipment maintenance, insurance, and utilities from the date of final CO. The tenant may not sublet the space and has no right to assign the lease without City approval. The Lease would expire upon purchase of the building by the tenant or could be renewed for one additional five-year term.
Financial Consideration
Funding for the City’s participation in the amount of $2,000,000 is available in Municipal Facilities Capital Projects Fund (405090) WO #01713903 (Old FS #1 Revitalization).
Body
A RESOLUTION OF THE CITY OF GRAND PRAIRIE, TEXAS, TO ENTER INTO A CHAPTER 380 ECONOMIC DEVELOPMENT AGREEMENT WITH ALCHEMY EVENTS, LLC FOR THE REMODEL OF A CITY OWNED FIRE STATION
WHEREAS, The City of Grand Prairie wishes to enter into this agreement to repurpose a vacant city-owned Main Street Fire Station as a restaurant and it is in the public interest to do so; and
WHEREAS, ALCHEMY EVENTS, LLC was selected after a competitive selection process to partner with the City and operate the restaurant under a lease; and
WHEREAS, ALCHEMY EVENTS, LLC has the option of purchasing the fire station if it meets certain requirements, and
NOW THEREFORE, BE IT RESOLVED, BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS:
Section 1. THAT the granting of this Chapter 380 Economic Development Agreement and Lease Agreement is approved and the City Manager is hereby authorized to execute contracts to effectuate this approval.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, ON THIS THE 21st DAY OF NOVEMBER, 2017.