REQUEST FOR PROPOSALS



REQUEST FOR PROPOSALS

FOR

RESTAURANT and MUSIC/ENTERTAINMENT VENUE

On The Santa Monica Pier

(256 Santa Monica Pier)

Proposals Due: October 12, 2011

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REQUEST FOR PROPOSALS FOR A RESTAURANT OPPORTUNITY

WITH EVENING MUSIC AND ENTERTAINMENT

AT 256 SANTA MONICA PIER, ON THE SANTA MONICA PIER

1. Restaurant Opportunity

• The City of Santa Monica seeks to identify interested, experienced, and qualified parties (“Operator”) to enter into a lease agreement to operate a lunch and dinner restaurant with alcohol service, evening music and entertainment, and other events. The creativity and imagination of the prospective Operator’s restaurant concept should expand upon and enhance the current offerings on the Pier. The restaurant is located at 256 Santa Monica Pier.

• The Santa Monica Pier offers prospective tenants excellent demographics, exceptionally high pedestrian traffic, and a festive ambience in one of Southern California’s most famous and distinctive seaside environments. The experienced restaurateur will have the opportunity to plan, design, renovate, operate, and maintain the restaurant and entertainment venue in one of Southern California’s most famous and distinctive seaside environments in accordance with all City, State, and County requirements.

• The City envisions an inviting, casual, and quality Restaurant with Entertainment that operates from an establishment, whose exterior and interior presentation contributes to the Pier’s festive ambience, adds to the vitality of the surrounding, area and introduces a concept that will meet the needs of Pier visitors and locals.

2. Lease Space

The lease space at 256 Santa Monica Pier (“Premises”) is approximately 4,309 sq. ft. that consists of 3,366 sq. ft. of interior space and 943 sq. ft. of exterior space in two outdoor dining patios along the front and back of the Premises.

The Premises is a multi-tenant building that was built in 1917 and remodeled in the early 1990s. The building houses two other restaurants, Santa Monica Pier Seafood, and an Italian Restaurant, Piazza al Mare that will begin tenant improvements in fall 2011, and is projected to open in early spring 2012. In the restaurant’s current configuration, the maximum occupancy of the Premises is 145 persons with tables and 211 persons without tables. The Lease Space is available in “as is” condition.

The location of the Lease Space is shown on Attachment A, and is just West of the famous Carousel Building and directly across from Bubba Gump Shrimp Company.

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3. Background

Built in 1909, the Santa Monica Pier’s ability to attract large crowds impressed Charles Looff, a pioneer amusement entrepreneur who had built Coney Island’s first carousel in New York. In 1916, after negotiations with the City of Santa Monica, Looff constructed his “Pleasure Pier” alongside the Municipal Pier. The Pleasure Pier featured the landmark Looff Hippodrome building, a California-Byzantine-Moorish-style fantasy that has housed a succession of vintage merry-go-rounds and Wurlitzer organs. It also boasted the Blue Streak Racer wooden roller coaster and the Whip and Aerospace thrill rides. Today, the Santa Monica Pier is known as one of the region’s premier recreational and entertainment destinations, attracting over six million visitors annually.

• The Santa Monica Pier is home to a unique collection of restaurants, shops and activities, including Bubba Gump Shrimp Co., Pacific Park Amusement Park, Santa Monica Pier Aquarium, operated by Heal the Bay, Playland Arcade and the historic Santa Monica Pier Carousel. The New York Trapeze School is the Pier’s newest attraction. Piazza al Mare, an Italian restaurant to be located at 250 Santa Monica Pier, is expected to begin construction on tenant improvements in Fall 2011 and be open in Spring 2012. Additionally, the restaurant at 330 Santa Monica Pier will be renovated under a new lease as Pier Burger, beginning Summer 2011.

• The Santa Monica Pier offers visitors one of the most dynamic public spaces in the region. Spectacular ocean vistas, and year-round events and attractions, notably the popular Thursday night summer Twilight Dance Series concerts, which annually attract over 100,000 people; outdoor film series, art festivals, and street performances.

• The Santa Monica Pier is one of the most recognized locations in the world and has been a featured backdrop for numerous motion picture and TV shows, such as “The Practice” ”Cellular”, “Mr. Bean”, “The Sting,” “Forrest Gump”, “24”, “Ugly Betty,” “Entourage” and “American Idol.”

• The Santa Monica Pier has convenient visitor parking located on the Pier and at adjacent parking lots. Parking on the Pier is usually available 24-hours a day, seven days a week, but may be closed to visitors at the discretion of the City, usually to accommodate special events or for public safety reasons. Parking is priced according to season.

4. Proposal Receipt

For consideration under this RFP, please submit Twelve (12) hard copies and one (1) electronic copy of your proposal by Wednesday, October 12, 2011. In addition, as part of the City’s sustainability efforts, we request that you conserve paper by printing and submitting double-sided hard copies.

Mail or hand deliver Proposals to:

City of Santa Monica

Economic Development Division

Attention: Donna Rickman, Project Manager

1901 Main Street, Suite E

Santa Monica, California 90405

(310) 458-8906

5. Site Visit and Additional Questions

A site visit is scheduled for Tuesday, September 13, 2011, at 10:00am. For questions regarding this site visit, contact Donna Rickman, Project Manager, at 310.434.8906, or donna.rickman@.

The answers to questions that may arise during the RFP process will be posted on the City of Santa Monica’s web site at Finance - Purchasing Section - City of Santa Monica. The Proposer should check the web site to see whether any modifications to this RFP have been posted prior to submitting their proposal.

6. Preferred Use

The Santa Monica Pier Leasing Guidelines identified the preferred use for 256 Santa Monica Pier as a “lunch and dinner restaurant with alcohol service, and with evening music and entertainment”.

7. Submittal Requirements

The submittal application and requirements are included as Attachment B. The following explains in more detail the City’s expectations and outcomes for this restaurant opportunity.

a. Lease Agreement

The selected restaurateur’s lease will be with the City of Santa Monica and negotiated by City staff. After lease preparation by the City Attorney’s Office, the lease is subject to review and approval of the Santa Monica Pier Restoration Corporation, which is a non-profit organization, designated by the City of Santa Monica to be responsible for specific activities, including advising the City on matters relating to leases and uses on the Santa Monica Pier. A draft copy of the Lease is included as Attachment C.

b. Lease Term

Proposal shall specify the desired period of lease and renewal options. The initial Lease term will be for a period commensurate to the Operator’s level of capital investment, not to exceed ten years. The right to exercise options, if any, will be negotiated, based on operational performance of the restaurant.

c. Lease Rate

The lease rate will be a minimum base rent plus a percentage of sales, whichever is greater, and shall be specified in the Proposal. Although base rent and/or percentage rents are a factor in evaluating proposals, other determinants will include the merits of the business plan, the marketing and management plan, the experience and qualifications of individual(s) proposing to participate in the operation of the restaurant and entertainment venue, evidence of financial strength, and capacity to operate said restaurant. Additionally, the ability of the prospective Operator to professionally and successfully manage a high-quality operation will be important considerations in the City’s decision-making process. The final lease rate will be determined during negotiation of the lease.

d. Marketing & Management Plan

The proposal must include a Marketing and Management Plan. The elements of the Plan may include a situational analysis, marketing strategy, competitor’s analysis, sales forecast, expense budget, human resource planning and action plan, as well as other considerations important to the Proposer.

e. Financial Assistance/Rent Concession

A request for rent relief credit, if any, to compensate the Operator for extraordinary capital investment, should be clearly stated in the Operator’s submittal.

f. Common Area Maintenance

The lessee will be responsible for payment of Common Area Maintenance fees for City maintenance of the public Pier areas, and for participation in the marketing and promotion of the Pier. This is a fixed cost of $7.20 per sq. ft per annum, effective July 1, 2011, with a CPI increase every two years.

g. Minimum Qualifications

Certain minimum qualifications have been established in order for proposals to be considered for the lease as described in this RFP:

• Operator must have three or more years of continuous experience in the development, management, and operation of a restaurant and entertainment venue or similar business that operates in a frequented commercial area.

• Operator must have demonstrated managerial and staffing resources to maintain a high quality, successful operation.

• Operator must have demonstrated financial capacity to finance substantial capital.

• Capital improvements and operating costs for the business.

• Ability and commitment to complete all necessary work to commence operations expeditiously, including sufficient staffing to open the Restaurant.

h. Required Development Approvals

• Modifications to the exterior of the structure must be consistent with Santa Monica Pier Design Guidelines; dated December 1987, which can be viewed at Pier Design Guidelines.

• Modifications to the space will require review and approval by the Santa Monica Pier Restoration Corporation, the City through its planning and permitting offices, and may require approval by the City of Santa Monica Landmarks Commission for signage and exterior changes. In addition, review and approval from the Los Angeles County Department of Health and Planning Commission for permits related to alcohol, and review and approval by the California Coastal Commission may be required if the Premises are expanded or reconfigured.

i. Special Operational Requirements for Food Service

The City of Santa Monica has a Non-Recyclable Food Service Container Ban that went into effect on February 9, 2008, and a Plastic Bag ban that will go into effect on September 1, 2011. Information regarding the City’s Sustainable Food policy can also be found at the following website: Environmental Programs - Business: Container Ban - City of Santa Monica.

j. Proposal Preferences

The Santa Monica Pier Leasing Guidelines sets forth the City’s preference for locally owned, independent, non-formula operations that are financially and operationally capable of providing the Preferred Uses. A formula business is that which requires, by contractual arrangement, the maintenance of standardized name, services, décor, uniforms, facility design, signage and trademark/logos, menu and format identical to another business.

k. Negotiation Timeline and Good Faith Deposit

The City intends to identify a preferred tenant within 90 days of receipt of proposals. A good faith deposit may be required at the time negotiations commence, subject to an exclusive negotiation agreement. It is expected that the negotiating period will be no more than 90 days before a lease is presented to the PRC.

l. “As is” Condition and Improvements

The Premises shall be available to the Operator in an “as is" condition. The Operator must provide all leasehold improvements. The Landlord makes no representation or warranty as to the physical state of the Premises or the Pier.

8. Labor Peace

The City as Lessor has a financial or proprietary interest in Pier businesses and the risk of interruption of rental revenue and common area maintenance fees received by the City from Pier businesses would be minimized if such businesses were assured of labor peace. The Agreement will contain a Labor Peace Provision that will stipulate that the Operator be prohibited from employing practices that impede their employees' ability to organize and contract with a labor organization for the purpose of collective bargaining.

9. Non-Discrimination/Equal Opportunity

The Agreement will contain a Non-Discrimination/Equal Opportunity Provision that states Operator shall not discriminate against any individual because of race, creed, color, sex, age, national origin, sexual orientation, religion, Acquired Immune Deficiency Syndrome, disability, or ancestry, in connection with the license.

10. Indemnification and Insurance

If the Operator is selected, before beginning operations, the Operator shall procure and maintain at Operator's own expense for the duration of the agreement, the following insurance against claims for injuries to persons or damages to property that may arise from or in connection with the possession, occupancy, operation and use of the Premises by Operator, Operator's agents, representatives, employees or subcontractors.

✓ Comprehensive/Commercial General Liability of not less than $1,000,000 per occurrence,

✓ Worker’s Compensation and Employer's Liability,

✓ Waiver of Subrogation for Worker’s Compensation and Employer’s Liability,

✓ Personal Property Insurance coverage in the amount of at least 100% of the full replacement value; and

✓ Business Interruption

11. Cost Liability

✓ The Operator shall bear all costs associated with submitting the proposal.

✓ The City is not responsible for any internal or external delivery delays, which may cause any proposal to arrive beyond the stated deadline.

✓ The City of Santa Monica does not pay finder's fees or commissions for opportunities arising under this RFP. Any such compensation is between the Operator and his or her agent or broker, if any.

12. Statement of Rights and Understanding

The City may exercise, at its sole discretion, the following rights, and options with respect to this RFP:

a. to accept, reject, or negotiate modifications to any and all proposals as it shall, in its sole discretion, deem to be in its best interest; submission of an RFP does not bind the City to any action or to any party. Submissions do not create or assume any relationship, agency, or obligation by the City, its officers or employees;

b. to issue additional solicitations for proposals and/or addenda to the RFP;

c. to award the lease to the Operator the City has determined to be most responsive, who has submitted a complete proposal that meets the specifications and requirements that are deemed by the City most advantageous to and in the best interest of the City;

d. to negotiate with any one or more of the respondents;

e. to waive any irregularities in any proposal;

f. to select any proposal as the basis for negotiations or a lease agreement, and to negotiate with respondents for amendment or other modifications to their proposals;

g. to conduct investigations with respect to the qualification of each respondent to obtain additional information deemed necessary to determine the ability of the respondent to carry out the obligations of the lease. This includes information needed to evaluate the background, experience, and financial capability of the respondent.

13. Evaluation Criteria

The following Criteria, not necessarily listed in order of importance, will be used to evaluate proposals. The City reserves the right to weigh its evaluation criteria in any manner it deems appropriate. Criteria include:

1. Thoroughness and completeness of proposal in response to the RFP requirements, including scope, extent, applicability and quality of Operator's personal character, relevant experience, proposed building improvements, marketing and management plan, operational plan and business plan;

2. Operational capability and experience; and schedule for the commencement of proposed operations. Operator must have an adequate organization, evidence of financial strength and resources, and personnel to ensure a successful operation;

3. Compatibility of the business plan with the goals for Preferred Use as articulated in this RFP. The creativity and imagination of the business concept should expand/improve upon current offerings on the Pier. In addition, prior experience and success in similar business endeavors;

4. Operator’s references (including landlords) that can furnish the City with information regarding organizations or individual’s qualifications, accounts and credit;

5. Restaurateur’s has a demonstrated financial, managerial, and marketing capacity to build and maintain all aspects of the proposed restaurant operation. It is important that Operator demonstrate the financial capability to make needed capital and operational investments as proposed. The ability to obtain both investment capital and on-going operating capital will be important factors in determining financial feasibility of proposed operation;

6. Compatibility of proposed operation with the Santa Monica Pier and local community;

7. Compatibility with Pier Design Guidelines; and

8. Proposed revenue to the City based on competitiveness and appropriateness.

14. Proposal Evaluation

Prospective Operators who submit a proposal in response to this RFP may be asked to make an oral presentation to the committee and/or provide additional information, and provide food samples.

15. Real Estate Brokers Commission

The Santa Monica Pier Leasing Guidelines, approved by the City Council, prohibit payment of real estate commissions. Payment of any commission to a real estate agent or broker will be the responsibility of the tenant.

16. Proposal Submission Form

The Operator's response to the RFP shall include a comprehensive description of the manner in which it would successfully finance, design, construct, market, operate , and maintain the restaurant and entertainment venue on the Santa Monica Pier.

The following Proposal Submission Form Attachment (B) is provided to ensure the equitable presentation of each proposal. In completing this Proposal Submission Form, Operator may, (1) replicate this format, or (2) utilize this format and fill in the appropriate information, attaching extra pages when additional space is needed. If replicated, the Operator assumes all responsibility for ensuring that all sections and wording are replicated and all requested information be provided utilizing the required format. A submission that is incomplete may be cause for rejection of the proposal. For consideration, please submit Twelve (12) copies and one (1) electronic copy of your proposal by Wednesday, October 12, 2011.

17. Attachments

A. Santa Monica Pier Site Map

B. Proposal Submission Form

C. Sample Lease Agreement

D. Contact Directory

Attachment A – Site Map

Attachment B

PROPOSAL SUBMITTAL FORM

All proposals must include this Proposal Submission Form containing answers to questions relating to Operator’s organization, personnel, experience, and concept that would substantiate its qualification and capabilities to perform the services required by the scope of the RFP. In filling out this Proposal Submission Form, Operator may, (1) replicate this format, or (2) utilize this format and fill in the appropriate information, attaching extra pages when additional space is needed. If replicated, the Operator assumes all responsibility for ensuring that all sections and wording are replicated and all requested information be provided utilizing the required format.

SECTION I. 256 SMP PROPOSED OPERATION AND SUBMISSION REQUIREMENTS

a) Statement of Interest: this letter should provide a statement of interest highlighting the Operator’s qualifications, and understanding of the requirements of this opportunity.

b) Project Team Resume(s): identify the project team and specify the relevant experience of the team members and key consultants.

c) Experience: Describe the experience of team members in the development and management of a food service establishment and music and entertainment venue including specific roles in the operation, dates, size, type of operation, type of tenant improvements, and amount of annual revenues for the three (3) most current consecutive years for each restaurant. Additionally, please provide copies of menus if possible.

d) Financial Capability: (SUBMIT THIS ITEM UNDER SEPARATE COVER AND MARK CONFIDENTIAL). Present evidence that the Operator has or will have the financial capability to carry out the proposed commitments. Evidence may include complete financial statement, audited if possible, for the last completed fiscal year; detailed financial resume/balance sheet of principal participants(s) listing all income, expenses and assets, including partial ownership interest in and income from any partially owned assets and list direct and contingent liabilities. This information will assist City to determine if Operator has the financial resources to carry out the operation as well as provide a guarantee of lease.

e) Concept and Operations: Please attach narrative description of the proposed operation, including type of food or proposed menu, music and entertainment, décor, hours of operation, price points, and other services or amenities to be included.

f) Operational Pro Forma: Provide an operational pro forma for the first 36 months of operation detailing annual revenue and expenses.

g) Marketing and Management Plan:

Please attach a Marketing and Management Plan.

h) Proposed Design: Describe how your proposed design rendering and/or floor plan illustrates how your concept will function within the building, and provide a schedule for making required improvements.

i) Capital Improvements: Provide a detail description including estimated amount of all construction costs proposed including design, physical improvements, equipment and fixtures, design and construction contingencies, and other investments. Indicate if these investments will be made before opening for business.

j) Architect/Contractor: If you have identified a designer and/or contractor for this project, please list their names and describe your prior working relationship.

k) Proposed Lease Fee and Term: Indicate a proposed Lease Fee (including base and percentage rent) term of lease and other lease fee structure that you may want the City to consider.

l) Other terms and conditions:

Specify any other terms or conditions requested of City.

SECTION II. OPERATOR INFORMATION

a) Name of Company (Legal Name):

b) Name and Title of Representative:

c) Name of business partners and percentage of ownership if applicable: ___________________________

d) Mailing Address:

e) Business Phone Number and Fax Number:

f) E-mail address:

g) Form of Organization (please check one):

____ Sole Proprietorship – Complete Section B-1

____ Partnership- Complete Section B-2

____ Corporation – Complete Section B-3

____ Limited Liability Co. – Complete Section B-4

h) Bankruptcy Information: In the past seven (7) years, have you, your officers or affiliates in this proposal, been declared bankrupt, filed a petition in any bankruptcy court, filed for protection from creditors in bankruptcy court, or have involuntary proceedings filed in bankruptcy court? (select one) ____Yes ____No

i) Pending Litigation: Are you, or your officers or affiliates in this proposal currently in any pending litigation? If yes, please explain?

B-1 Sole Proprietorship

a) Proprietor’s Name:

b) Business Name:

c) Residence Address:

d) Business Address:

e) Business Phone and Fax:

f) Name of full time managing officer or managing employee:

g) Attach resumes of owner(s) and full time managing officer(s) or managing employee(s).Section B-2:

B-2 Partnership

a) Please check the applicable organization:

General Partnership _____ Limited Partnership _____

b) Partnership Agreement Recorded? (select one) Yes _____ No _____

c) Name addresses and partnership share of each general and/or limited partner (add additional sheets as necessary). If limited, general partner must be identified:

Name Address Share

1.

2.

3.

4.

d) Please describe how long and in what capacity the principals have worked together:

e) Name of full time managing officer or managing employee:

f) Attach a complete copy of the fully executed Partnership Agreement.

B-3 Corporation

a) Organized Under Laws of: ________________________Calif. Permit No.:

b) Date Organized: ____________________ Head Office Located:

c) Mailing Address:

d) Business Phone and Fax:

e) Is the corporation held: (select one) Publicly _____ Privately ______

f) If publicly held, how and where is the stock traded?

g) List the name, title and amount of stock/membership interests held by each corporate officers, each member of the board of directors, and each “principal“ stockholder/member (principal stockholder/member defined as a stockholder who holds 10% or more of the outstanding stock or membership interests of the corporation). Use additional sheets as necessary.

Name & Title (officer, board member, principal stockholder) Amount of Stock or Interest

1.

2.

3.

h) Attach complete copy of Articles of Incorporation.

B-4 Limited Liability Company

a) Date the LLC formed: Location LLC formed:

b) Was Article of Organization filed? (Select one) ___Yes ___No If yes, when?

c) Provide name, and address of each member (add additional sheets if necessary)

Name Address

1.

2.

3.

4.

d) Is the management of the limited liability company vested in one or more managers? If yes, please provide name and addresses of the manager:

e) Please describe how long and in what capacity the principal members have worked together:

f) Provide the date of dissolution of the limited liability company, if any.

g) Attach complete copy of the fully executed Articles of Organization and any Amendments.

Section III. REFERENCES

Industry References

Please provide at least three industry references that can furnish the City information regarding organization or individual’s experience. Include contact names and phone numbers. This information will be used to evaluate each Proposer’s service history.

1. Contact Name: Tele #:

Brief Description of Relationship:

2. Contact Name: Tele #:

Brief Description of Relationship:

3. Contact Name: Tele #:

Brief Description of Relationship:

Credit/Bank References

Please provide at least two banks, lender or other financial institution references that can furnish the City with information regarding organizations or individual’s accounts and credit history. Include contact names and phone numbers.

1. Contact Name: Tele #:

Brief Description of Relationship:

2. Contact Name: Tele #:

Brief Description of Relationship:

Landlord References

Please provide at least two recent landlord references (including current landlord if leasing). Include contact names, phone numbers, and address of property leased.

1. Contact Name: Tele #:

Address of Property Rented:

2. Contact Name: Tele #:

Address of Property Rented:

SECTION IV.

Having examined and understood the terms, conditions and specifications, and being familiar with the general nature of this request for proposal, the following is hereby proposed for consideration and evaluation:

Signature Authorized Representative Date

___________________________________

Print Name and Title of Authorized Representative

Attachment C – Sample Lease Agreement

EXHIBIT D

CONTACT DIRECTORY

1. Questions regarding this RFP and general lease questions may be directed to:

Donna Rickman

Project Manager-Economic Development

(310) 434-2689

donna.rickman@

2. Questions regarding the Pier Restoration Corporation (PRC) activities including Pier marketing and special events may be directed to:

Steve Gibson

Acting Executive Director

(310) 458-8901

Steve@

3. Questions regarding City Planning regulatory approvals including Landmarks Commission may be directed to:

Scott Albright

Senior Planner

(310) 458-5215

Scott.Albright@

Question regarding alcohol licensing may be directed:

California Department of Alcoholic

Beverage Control

(310) 412-6311

5. Questions regarding State of California Coastal Commission review and approvals may be directed to:

California Coastal Commission

200 Oceangate, 10th Floor

Long Beach, CA 90802

(562) 590-5071

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Twelve (12) copies and one (1) electronic copy of the Proposal must be received no later than

October 12, 2011

Mail proposal to the following address:

City of Santa Monica

Economic Development Division

Attn: Donna Rickman, Project Manager

1901 Main Street, Suite E

Santa Monica, CA 90405

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