HomeMy WebLinkAboutCRPS-07-055 - Consent for Food Service Sublet Arrangement - Wat Regional Children's Museum1
I~TC~~R
Corporate Services
REPORT
Report To: Finance and Corporate Services Committee
Date of Meeting: April 23, 2007
Submitted By: Troy Speck
General Manager, Corporate Services Department
Prepared By: Lesley MacDonald,
Director of Legal Services and City Solicitor
Ward(s~ Involved: NIA
Date of Report: April 20, 2007
Report No.: CRPS - 07 - 055
Subject: Consent for Food Service Sublet Arrangement re: Waterloo
Regional Children's Museum
Recommendation:
That the City consents to a sublet arrangement for the provision of a food service component at
the Waterloo Regional Children's 1Vluseum premises, leased at 10-22 King Street Nest, should a
separate operator be secured through an RFP process, to be located in the former toy store space
located near the main entrance, under the terms and conditions set out in Report CRPS #07-055.
Background:
There is a provision in the Lease between the Children's Museum and the City of Kitchener
which requires the City's written consent to the sublet of any portion of the premises at 10-22
King Street West, provided the sublet is for a use which is ancillary to and supports the main use
as a children's museum. Staff has been approached by the Children's Museum seeking the City's
approval of a sublet arrangement for the provision of food services should the Children's
1Vluseum decide to pursue this type of arrangement rather than operate it directly. The City's
consent shall not be unreasonably withheld.
Report:
The Children's Museum recognizes that there is a reasonable expectation that their visitors can
purchase food or beverages during their visit. Initially the Children's 1Vluseum offered vending
machines for its visitors, which were subsequently removed by the operator. Currently the
2
Children's Museum offers a microwave, coffee for a donation and drinking fountains. They
would like to either operate a more structured food service themselves or secure the provision of
same from an independent food provider, secured through an RFP. At this point in time they
have not decided which direction they will take, but recognize they need the City's permission if
they secure a separate operator through an RFP process. In anticipation of this decision they seek
Council approval of any such sublet arrangement that may be reached through an RFP process.
Staff supports a sublet arrangement for the provision of a food service component at the
Waterloo Regional Children's Museum premises, should a separate operator be secured through
an RFP process, said consent to be on the following terms and conditions:
1. the City is not responsible for the costs of any leasehold improvements or modifications
required to accommodate the food service;
2. that the construction of any leasehold improvements or modifications and the operation
of the food services component be in compliance with all Federal, Provincial and
Municipal requirements including but not limited to the Building Code, the Fire Code and
Health regulations;
3. that the City's Director of Facilities Management approve any renovations;
4. the Children's Museum is responsible for any property taxes attributable to the food
service operation and will pay any bills in that regard upon receipt from the City; and
5. that the Children's Museum may retain all revenue/rent for the first five (5) years of the
food services operation and, six (6) months prior to the expiry of the first five years of
operation, the Children's Museum shall provide the City with financial statements for the
term of the operation and thereafter pay the City a proportionate share of the profits, the
rate to be negotiated.
Should the Children's Museum decide to operate a more structured food service themselves, they
are currently obligated to:
• pay any taxes that maybe applicable to their use,
• any renovation costs
• comply with all applicable laws
• pay all operating costs, including utilities; and
• secure City consent for any change to structural components.
Financial Implications:
Council should be reminded that the Children's Museum owes an outstanding debt to the City in
the amount of $242,230.00, which is broken down as follows:
Elevator $ 90,000.00
Construction costs $ 70,252.57
Interest $ 81,977.43
$242,230.00
3
Staff has reviewed the financial statements for the museum for 2005 and 2006, which
demonstrate very limited, or no current ability to re-pay the debt owing to the City. David
1Vlarskell, Executive Director of the museum well be in attendance at the Finance and Corporate
Services Committee meeting to answer any questions Council may have.
Communications: NIA
Conclusion:
Staff supports a sublet arrangement for the provision of a food service component at the
Waterloo Regional Children's Museum premises, leased at 10-22 King Street West, should a
separate operator be secured through an RFP process, said support contingent on the terms and
conditions set out within this report.
Troy Speck.
General Manager, Corporate Services Department