09. Blue Pheasant LeaseDEPARTMENT OF PARKS AND RECREATION
CUPERTINO
Agenda Item No. ~
Meeting Date: September 2, 2008
SUBJECT
Blue Pheasant Property Lease Option Renewal
BACKGROUND
The Blcae Pheasant Property includes a building of approximately 6800 square feet, including the
kitchen, bar, banquet room, and the non-exclusive use of 92 parking spaces. In the current lease
agreement, the lessee is given the option to extend the term on all provisions contained in the lease,
except base rent for a fve year period following the expira.tion of the current terms. Mike Tsachres
has been the lessee since 2005, and he is in good standing by paying his monthly rent on time.
In the (ast ftve years, the City has incurred the following expenditures on the Blue Pheasant Property:
Operating Costs $41,738
Capital Cost for Re-Roofing I 29- 0.953
Total Expenditures $ I 62,691
Operating costs include such items as the City's portion of property tax, ADA access ramp, sidewalk
repair, and Sanitary District fees. The City's only other obligatian for maintenance on the property is
for the joint use parking fot and exterior wal(s. The lessee is respansible for all other maintenance to
the restaurant and bar,.and is required to maintain the property in good and safe condition at his own
expense.
DISCUSSION
Staff met with Mr. Tsachres on August I 8, 2008, to discuss the terms for month(y base rent After
some discussion and reviewing of marl<et clata, staff and Mr. Tsachres came to a tentative agreement
for the following monthly base rent
Commencing Date Monthly Base Rent Annual Ren~
April I, 2009 $8374 $ I 00,4$8
April I, 20 I 0 $8626 $ I 03,5 f 2
April I, 201 I $8885 $106,62Q
April I, 20 I 2 $9 i 52 $ I 09,824
April I, 20 I 3 $9427 $1 I 3,124
Lease Rent Total $533,568
This tentative agreement adds $500 to the monthly 2008 base rent and then adds 3% annually.
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RECOMMENDATION
Authorize the City Manager to execute a(ease extension agreement with Mike Tsachres, current
operator of the Blue Pheasant Restaurant, with the terms for monthly base rent for a five (5) year
period to be $500 above 2408 base rent with a 3% annual increase.
SUBMITTED SY:
.
Julia A. Lamy, Recre tion Supervisor
APPROVED FOR SUBMlSSI~N
TO CITY COUNCIL:
~~i~~
David W. Knapp, City Manager
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EXTENSION AND AMENDMENT 4F LEASE AGREEMENT BETWEEN THE
CITY OF CUPERT[NO AND HUNGRY JACK°S RESTAURANT
CORPORATION AtdD MIKE TSQCNRES
This Agreement between the City of Cuper~ino, a California municipal
corporation {the "City"), ancf Hungry Jack's Restaurant Corporation, a Califamia
corporatian, and Mike Tsachres (collectively "the Lessee") constitutes an
extension and amendment of a certain Lease Agreement ("the Lease"} executed
between the City and the Lessee's predecessor in interest, The Blue Pheasant
Restaurant, a Califomia carporation ("Predecessor in lnterest") on or about April
1, 2004 for the lease of the premises known as "The Blue Pheasant Resfaurant"
{the "Property") and more particularly described as 22100 Stevens Creek
Boulevard, City of Cupertino, Gounty of San#a Clara, and State of Califomia
WITNESSETH:
WHEREAS, on April 1, 2004 the City and Predecessor in Interest
executed a lease for the Property; a copy of which is attached hereto; and
WHEREAS, on or about Aprif 7, 2004,Predecessor in lnterest assigned,
with the consent of the City, all right, title and interest in the Lease to Lessee; and
WHEREAS, the present E.ease term expires March 29, 2009; and
WHEREAS, Lessee, pursuant to Paragraph 3 of the Lease, has the option
to extend ~he term of the Lease for a period of five {5) years beyond the
expiration da#e of March 29, 2009, under the same terms and conditions as
contained in the Lease executed on ;4pril 1, 2004 with the exception of the Base
Rent Term described in Paragraph 4 of the Lease; and
WHEREAS, Lessee has, within the time prescribed in the Lease, provided
notice of Lessee's intent to exercise the option above-described; and
WHEREAS, the City and Lessee have agreed to a new Base Rent to be
charged.
NOW THEREFORE, it is agreed between the City and the Lessee as
fol~ows:
Effective Apri[ 1, 2009, the term of the Lease shall be e~cfended from
Apri) 1, 2Q09 until March 31, 2Q13. ~
2. Effective April 1, 2009, Paragraph 4(a) af the Lease shall be amended
to read as follows::
4. BASE RENT .
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a) Lessee shall pay to the City a month(y base rent, without
deduction or setoff, as follows:
Corrimencing
Date Mon~hly
Base Rent
Annua! Rent
April I, 2009 $8374 $I00,488
April I, 20 f 0 $8626 $ I 03,5 i 2
April l, 201 1 $8885 $IOb,b20
. April 1, 2012 $9152 $109,824
April I, 20 I 3 $9427 $ I i 3,124
Lease Rent
Total
$533,568
3. All other terms.and provisions of the Lease will remain in full force and
effect.
IN WiTNESS WHEREOF, the parfies have executed this Extension and
Amendment to Lease Agreement on {~va~st a7 , 2008.
THE CITY:
Date:
ASSIGNEES:
By:
DAVID KNAPP, City Manager
ATTESTED BY:
Date:
HrJi~4GRY JACK'S RESTAURANT
CORPORATfON by MIKE
TSACHRES, President
Date:
~ ~~~
~
MIKE TSACHRES, as an
Individuaf
Kimberly Smith, City Clerk
Approved as to Form:
Date:
Charies T. Kilian, City Attomey
Date: /~~9~s~ Z7~ ~.od8
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2
C~1~iFORN1A ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of S QYt`Ca e~ Q~0._
On ~~St Z7~ ZOC~ before me, #~tvn Marce Smt~h, J~otarv ~~bl~c ,
Date , Nere Insert Name and Title of the Officer
personally appeared t
n,~~s~ oi s~~an5~
who proved to me on the basis of satisfactory evidence ta
~ ~~~ be the person(,s'} whose name(,s'J is/are subscribed to the
Cort~r~ion # 1615404 ~+E~hin instrument and acknowledged to me that
he/ executed the same in hiy~~;;nz~~ authorized
No~tarY R~b~c - CaN~oeNa ~ ~
;anloCbaCo~xqy capacity(~ies), and that by his/he~}~reir signature(s~ on the
- .~eo^~-~~1+~-~.~ instrument the person(8~j, or the entiry upon behalf of
~ ~ which ihe person~ acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws
of the State of California that the #oregoing paragraph is
true and correct.
WITNESS my hand and officia! seal.
Place Nata sea~ qnove Signature ~~~~~~~`~~
rY Signature ot Notary Public
OPTIONAL
Though the information below is not required by /aw, it may prove valuable to persons relying on the documerrt
and cpuld prevent fraudulent removal and reaftachment of this form to another document.
Description of At#ached Documet~t
Fx-te~~-an a,na fFmeriame.rt-~ of Lea~~ ,~9~eenzerti be.~t~eean
Titfe orType of Document: -~.~, ~~ ~ ~ ~ __ ~__~~.,_,M...._, i,. _ LF_ 7'~~...c _. ~_ ..~ ~_ .__
Document Date: ~nd Mi~e
Signer(s) Other Than Named Above:
Capacity(ies} Claimed by Signer(s)
Signer's Name:
^ individuai
^ Corporate Officer - Title(s): _
^ Partner - O Limited ^ General
CJ Atiorney in Fact
~ Trustee
^ Guardian or Conservator
D Other:
Signer Is Representing:
.
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Number o# Pages: _ o"'Z-
Signer's Name:
^ Individual
^ Corporate Officer-Title(s): _
^ Partner - I~ Limited ^ Genera!
^ Attorney in Fact
O Trustee
^ Guardian or Conservator
^ Other:
Signer Is Representing:
.
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~2007 Natiornal Ndary Assoaation • g35p pe Solo ,4vy., P.O. Bo~t 2402 • Chatsworth, CA 9131 &2402• www.Nat{one~lohary.org Nem ;@5967 Reorder: Cal TW-Free'I •800-8766827
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EXHIBITS
BEGIN
HERE
Blue Pheasant Property
Lease Option Renewal
~;
.~
N
i
2004-2008 City Expenditures on the
Blue Pheasant Property
Operating Costs
Ca pits I Cost
T_L_ 1 r- --- - -- -~~~- - -- -
i~~ai Cx~er~Ui~ures
$41,738
120 953
$11~2,1~91
Base Rent Collected April 2004-August 2008.
$399,107
Blue Pheasant Restaurant
Community Contributions
• 50% food discount for golfers from Blackberry
Farm Golf Course
• 2s% senior discount on food
• 25% discount on food for non-profit
organization events held at the restaurant
RECOMMENDATION
Authorize the City Manager to execute a lease
extension agreement with Mike Tsachres,
current operator of the Blue Pheasant
Restaurant, with the terms for monthly base
rent for a five (5) year period to be $500
above 2008 base rent with a 3% annual
increase.