Placement: Second Reading of Ordinances / Public Hearing
Action Requested: Motion / Vote
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Ordinance 23-02, Public Hearing, Authorizing a Lease Agreement between the City of Port St. Lucie and PIII Investments, LLC, for a Portion of Real Property Located at 2454 SE Westmoreland Boulevard (The Port District Riverfront Park) for a Riverfront Restaurant.
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Submitted By: Jennifer Davis, Interim Director, Community Redevelopment Agency
Strategic Plan Link: The City's Goal to enjoy culture, nature and fun activities.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Jennifer Davis, Interim Director, Community Redevelopment Agency and Margaret Carland, Senior Deputy City Attorney
2. Parties: City of Port St. Lucie and PIII Investments, LLC
3. Purpose: Execute a ground lease agreement in accordance with the negotiated terms and conditions between the City of Port St. Lucie and PIII Investments, LLC, for the development, construction and operation of a riverfront food garden in The Port District’s riverfront park site.
4. New/Renewal/Modified: New
5. Duration: Initial term of thirty (30) years, with four 5-year renewal options.
6. Benefits to Port St. Lucie: The creation of a destination along the North Fork of the St. Lucie River has long been a strategic priority of the City of Port St. Lucie. Through the development (and now construction) of a riverfront park and related park elements, the public will have a unique opportunity to connect with the river. The addition of a riverfront restaurant to the park site will enhance the draw to the site and surrounding amenities including the City’s Botanical Gardens, newly developed Historic Village, Pioneer Park Playground, and extensive interconnected trail network.
7. Cost to Port St. Lucie (Annual and Potential): There are no annual cost associated with the lease agreement. A synopsis of the anticipated annual revenue is outlined below. The cost of preparing the restaurant pad for the restaurant developer is included in the sitework for the overall Port District park project.
Presentation Information: A brief presentation will be provided by staff, if requested. A full presentation was provided to the Community Redevelopment Agency Board on December 12, 2022.
Staff Recommendation: Move that the Council approve the lease agreement between the City of Port St. Lucie and PIII Investments, LLC, for a period of thirty (30) years, with four 5-year renewal options.
Alternate Recommendations:
1. Move that the Council not approve the lease agreement between the City of Port St. Lucie and PIII Investments, LLC, and provide staff with additional direction.
Background: In late 2020, the City of Port St. Lucie engaged Colliers International to assist with marketing and recruitment efforts for the riverfront restaurant site in The Port District. Subsequently, Colliers worked closely with several interested parties and brought forward PIII Investments, LLC, with a restaurant village concept for the site in January 2022. City staff worked with the proposed developer on the lease terms and conditions over the last several months and presented the overall terms for review by the City’s Community Redevelopment Agency Board at the December 12, 2022 meeting.
Issues/Analysis: The leased area is contained within the overall park site, which is currently under construction by Ferreira Construction. As part of the lease agreement, the City is to deliver a “pad ready site” to the restaurant developer for the construction of a riverfront restaurant.
Financial Information:
The following provides a synopsis of the major lease terms for the project:
• Lease Term: Initial 30-year term, with four 5-year renewal options
• Base Rent: $40,000 annually, paid monthly; 3% escalation annually
• Percentage Rent: 4% of gross sales over $2,500,000
• Property Taxes and Assessments: Lessee will be responsible for paying property taxes and assessments associated with the leased parcel and the improvements thereon.
Special Consideration:
In addition to the financial terms set forth above, the lease contemplates the following:
• Improvements: Lessee will be responsible for obtaining all necessary permits and approvals and constructing all improvements within the leased area. Lessee’s improvements shall not exceed 15,000 SF in size and will include both indoor and outdoor dining options.
• Parking: Parking for the restaurant will be shared with the entire park site; valet parking is allowed in the lease agreement.
• Hours of Operation: Lessee shall, at a minimum, operate for lunch and dinner, 10 hours per day, 7 days per week, with holiday exceptions noted. The main dining venue is permitted to be closed on either Monday or Tuesday, so long as one another venue is open for serving food and beverages.
• Signage: Restaurant signage will be included in the Port District’s Master Sign Program.
• Exclusivity and Right of First Refusal: Leasehold improvements constructed by Lessee shall be the only improvements in The Port District park site for food and beverage services. City will be permitted to enter into short term agreements for the sale of food and beverage within The Port District park site for special events. The Right of First Refusal does not apply to non-City sponsored events.
Location of Project: The restaurant site is located along the east shoreline of the North Fork of the St. Lucie River, generally at the western edge of the Westmoreland Middle Tract site, south of Port St. Lucie Boulevard, in The Port District.
Attachments: 1. Ordinance; 2. Exhibit A to Ordinance - Lease Agreement and all related exhibits; 3. Location Map
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 8298
Legal Sufficiency Review:
Reviewed by Margaret M. Carland, Senior Deputy City Attorney. Approved as to Legal form and sufficiency by James D. Stokes, City Attorney.