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HomeMy WebLinkAboutResolution No. 2020-94KENAI CITY OF KENAI RESOLUTION NO. 2020-94 Sponsored by: Administration A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AMENDED RESTAURANT CONCESSION AGREEMENT AT THE KENAI MUNICIPAL AIRPORT WITH BROTHERS CAFE. WHEREAS, on August 1, 2018, Council passed Resolution 2018-42 authorizing the City Manager to enter into a restaurant concession agreement with the Brothers' Cafe; and, WHEREAS, for the rights and privileges granted under the agreement, the Brothers' Cafe paid a monthly percentage of 5% of gross receipts plus applicable sales tax for August and September of 2018 and 10% plus applicable sales tax for all months after September 2018; and, WHEREAS, on March 6, 2019 Council passed Resolution 2019-14 authorizing the City Manager to enter into and amended concession agreement with the Brothers' Cafe recognizing decreased business due to the terminal rehabilitation project that allowed forgiveness of the monthly payment due the City; and, WHEREAS, based on that authorization, between March of 2019 and July of 2020, when the terminal rehabilitation project was completed, Brothers Cafe was required to make either a reduced payment of 5% or no payments to the City based on gross receipts; and, WHEREAS, the Brothers' Cafe is experiencing a continued decrease in their business primarily due to the substantial reduction in the numbers of the traveling public as a result of the RAVN Alaska bankruptcy and the COVID-19 pandemic and is requesting continued rent relief for the months of August 2020 through June of 2021, when their contract with the City is eligible for renewal; and, WHEREAS, City Administration has reviewed their financial data and determined that the request is reasonable due to continued impacts as a result of the COVID-19 pandemic. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That the City Manager is authorized to execute an amendment to the concession contract with the Brothers' Cafe to amend the monthly percentage fee they pay to the City in a range from 0% to 10% of gross receipts plus applicable sales tax until June of 2021 based on a review of the gross receipts as reported monthly by the Brothers' Cafe, in compliance with applicable FAA requirements. Section 2. That this resolution is retroactive to payments due in August of 2020. Section 3. That this resolution takes effect immediately upon adoption. Resolution No. 2020-94 Page 2 of 2 ADOPTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 16`h day of December, 2020. ATTEST: J mi Heinz, CMC, City Clerk O 't)S� Oo G^!DED KENAI City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www1enai.city MEMORANDUM TO: Mayor Gabriel and Council Members FROM: Paul Ostrander, City Manager DATE: December 8, 2020 SUBJECT: Resolution 2020-94 — Airport Restaurant Contract Amendment In August of 2018 the Council passed Resolution 2018-42 authorizing the City Manager to enter into a restaurant concession agreement with the Brothers' Cafe for a two-year term with an opportunity to extend for three successive one-year terms. They have been operating out of the Kenai Municipal Airport since that time. The original agreement anticipated that the Cafe would pay 5% of their monthly gross receipts over the first several months of the Agreement and 10% of monthly gross receipts over the remaining term of the Agreement. The Cafe has been impacted by several events outside of their control, initially by the Airport Terminal Rehabilitation Project, and more recently by the COVID-19 pandemic and the accompanying decrease in the number of travelling public exacerbated by the RAVN bankruptcy. Council approved rent relief to the Cafe during the Terminal Rehabilitation Project due to impacts during the construction period. This resulted in the Cafe paying either 5% of monthly gross receipts or no monthly payment from March of 2019 to July of 2020, when the project ended. This resolution would authorize the City Manager to execute an amendment to the concession contract with the Brothers' Cafe that would provide the possibility of further rent relief beginning in August of 2020 through June of 2021. The City Manager would be authorized to set the monthly payment in a range from 0% to 10% with justification based on the gross receipts as reported monthly by the Cafe.