DEPARTMENT: Aviation
DEPARTMENT HEAD: Frank Miller
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT:
Concession Agreement for a Brown Bag Sandwich Shop at Stinson Municipal Airport
SUMMARY:
This Ordinance authorizes a concession agreement with The Brown Bag Sandwich Shop, Inc. to operate a café at Stinson Municipal Airport. The initial term is one year with the options of four one-year renewals. The City will waive the guaranteed rent for the first year but the café will pay 2.7% of gross sales after the first $5,000 in monthly gross sales.
The café will operate under the name "Brown Bag Touch 'N Go Sandwich Shop" and serve sandwiches from 11 a.m. to 2 p.m. on Mondays through Saturdays. They will also provide catering services.
BACKGROUND INFORMATION:
The Brown Bag Sandwich Shop currently operates a sandwich shop at 11035 Wetmore Road and is interested in opening a second location at Stinson Municipal Airport.
Customers will be able to purchase sandwiches, chips and drinks from 11 a.m. to 2 p.m. on Monday through Saturday. The café will also provide catering services for Stinson airport-based businesses.
This concession contract is subject to the San Antonio Airport System's Airport Concessionaire Disadvantage Business Enterprise Program.
ISSUE:
Approval of this Ordinance is consistent with City Council policy to generate revenue through the leasing of City-owned property.
ALTERNATIVES:
City Council may elect not to approve this agreement, resulting in the development of a new solicitation for food and beverage services at Stinson Municipal Airport. This action would result in a delay of revenue to the City.
FISCAL IMPACT:
The agreement is for a term of one year with four one-year renewals. The Minimum Annual Guarantee (MAG) will be $0.00 for the initial one-year term. If the term is extended, the concessionaire will pay the City a minimal guaranteed rent in the total amount of $1,200.00. The MAG for the third year and each succeeding lease year will be calculated by multiplying 85% by the total amount of concession fees (MAG and percentage rent).
During the initial year, the concessionaire will pay the City each month 2.7% of gross sales after the first $5,000.00 in monthly gross sales. In the second lease year, if agreement is extended and in addition to guaranteed rent described above, the concessionaire will pay a percentage rent negotiated between the City and the concessionaire.
Payments after the first year will be the greater of the MAG and the percentage rent. During subsequent years, the café will also pay utilities associated with the café.
RECOMMENDATION:
Staff recommends the authorization of a concession agreement with The Brown Bag Sandwich Shop, Inc. to operate the Brown Bag Touch 'N Go Sandwich Shop at Stinson Municipal Airport.