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<br />Market & Economic Feasibility of <br /> <br />Lodging and Related Developments <br /> <br />. Report developed by PKF Consulting in 2002 <br /> <br />. Conclusions included: <br />- A 200-room, full-service, conference-style, destination <br />hotel is market-justified <br />. Main restaurant seating for 200 <br />. Separate water-oriented restaurant for 75 <br />. 17,500 sq. ft. of meeting space <br />. Fitness center and indoor swimming pool <br />- City financial contribution in 2002 dollars was a <br />subsidized ground lease of $3m for the site and $13m <br />for development <br />- Annual TOT revenue in 2002 dollars of $lm <br />- Only one hotel is viable and the Blue Dolphin site is <br />referred <br /> <br />Connections Plan 2003 <br /> <br />. The Connections Plan was developed in 2003, <br />during a time when the hotel and restaurant <br />industries were suffering, to lay the groundwork <br />for future development <br /> <br /> <br />Restaurant Broker 2004 <br /> <br /> <br />. Project: City contracted with <br />preeminent Bay Area <br />restaurant broker, Paul <br />Stanners, who negotiated with <br />two quality restaurateurs- E&O <br />Trading Company and Faz <br /> <br />. Location: Blue Dolphin site <br /> <br />. Status: E&O considered for restaurant and 100 <br />person banquet facility due to better financing, more <br />staying power, history of quality development and <br />image as an up and coming restaurateur <br /> <br />Market & Economic Feasibility of Lodging <br />and Related Developments (continued) <br /> <br />- 225-seat, full service restaurant with <br />private banquet rooms is also market _ <br />justified <br />- The restaurant could be built on <br />either the Boatworks site or the site <br />to the North of EI Torito <br />- No financial contribution to a restaurant <br />facility would be required <br />- Annual lease income in 2002 dollars of $165k <br />7JP'l. <br />sI>>~ <br /> <br /> <br /> <br /> <br />Landry's Restaurants 2003 <br /> <br />Project: Joe's Crab Shack, a <br />restaurant/bar <br /> <br />. Location: Blue Dolphin site <br /> <br />. Status: City not interested in <br />a "peanuts on the ground" <br />eating and drinking <br />establishment <br /> <br />. Hurdle: Landry's was not <br />interested in placing a more <br />formal restaurant, such as <br />their Chart House brand <br /> <br /> <br /> <br />Restaurant Broker 2004 (continued) <br /> <br />. Hurdle: E&O required investment of $2.5m ($lm in <br />infrastructure improvements and $l.5m to build <br />restaurant shell). The City was unable to justify the <br />General Fund expenditure given constrained City <br />revenue and increasing expenditures (City was cutting <br />programs & services in 2004-05) <br /> <br />. Lessons Learned: <br />- Some mid-level chain concepts may require little or no <br />City investment (rent based on performance only) <br />- Premium dining establishment can be attracted on a <br />build-to-suit basis (City builds shell & infrastructure) and <br />will pay guaranteed market rent <br />- Marina Ad Hoc Committee wanted restaurant with better <br />name recognition <br /> <br />4 <br />