DEPARTMENT: Center City Development and Operations Department
DEPARTMENT HEAD: John Jacks
COUNCIL DISTRICTS IMPACTED: 1
SUBJECT:
Amendment to River Walk Lease Agreement with JCS Acquisition, Inc. d/b/a Joe’s Crab Shack
SUMMARY:
This ordinance authorizes an Amendment to the River Walk Lease Agreement (Agreement) between the City of San Antonio and JCS Acquisition, Inc. d/b/a Joe’s Crab Shack to extend the Agreement’s term through November 30, 2022.
BACKGROUND INFORMATION:
Ordinance 2012-08-02-0549 authorized an Agreement with Joe’s Crab Shack-Texas, Inc. (a subsidiary of the Ignite Restaurant Group) for use of 98.87 square feet of River Walk Patio Space. On July 23, 2013, Ignite Restaurant Group notified the City that Joe’s Crab Shack-Texas, Inc. had merged with Crab Addison, Inc. and on January 10, 2017, Ignite Restaurant Group notified the City that Crab Addison, Inc. was converted to Joe’s Crab Shack, LLC.
Joe’s Crab Shack LLC’s Agreement was to expire on December 31, 2017 so in May 2017, staff began negotiations with Joe’s Crab Shack, LLC to amend and extend their Agreement through November 30, 2022 to be in-line with the expiration of their interior lease space. This amendment was to be brought forward for City Council Consideration in October 2017; however, on June 6, 2017 the Ignite Restaurant Group filed for Chapter 11 bankruptcy.
On August 17, 2017, Landry’s Inc. acquired all of Ignite Restaurant Groups assets. Shortly thereafter Landry’s, Inc. contacted the City expressing interest in finalizing the amendment to extend the Joe’s Crab Shack Agreement as initially planned. This ordinance will authorize an Amendment to the Agreement with JCS Acquisitions, Inc. (a subsidiary of Landry’s Inc.) d/b/a Joe’s Crab Shack to extend the Agreement’s term through November 30, 2022.
ISSUE:
Approval of this ordinance is consistent with the City’s policy of leasing River Walk patio space to adjacent businesses for outdoor dining alongside the San Antonio River.
ALTERNATIVES:
The City may elect not to amend the Agreement, which would result in the Joe’s Crab Shack’s occupancy becoming at will or terminating.
FISCAL IMPACT:
Under this Amendment, Joe’s Crab Shack will pay a rate of $2.71 per square foot per month effective January 1, 2018 and will increase 2.5% annually. The total amount to be received by Joe’s Crab Shack is summarized below:
|
Lease Year |
Rate |
Monthly |
Annual |
|
January 1, 2018 - December 31, 2018 |
$2.71 |
$267.94 |
$3,215.28 |
|
January 1, 2019 - December 31, 2019 |
$2.78 |
$274.86 |
$3,298.32 |
|
January 1, 2020 - December 31, 2020 |
$2.85 |
$281.78 |
$3,381.36 |
|
January 1, 2021 - December 31, 2021 |
$2.92 |
$288.70 |
$3,464.40 |
|
January 1, 2022 - November 30, 2022 |
$2.99 |
$295.62 |
$3,251.82 |
|
Total |
$16,611.18 |
All funds received will be deposited into the River Walk Capital Improvements Fund.
RECOMMENDATION:
Staff recommends approval of the Amendment to the River Walk Lease Agreement between the City of San Antonio and JCS Acquisition, Inc. d/b/a Joe’s Crab Shack to extend the Agreement term through November 30, 2022.