Item No. {{item.number}}
Town of Atherton
CITY COUNCIL STAFF REPORT – ACTION ITEM
TO: HONORABLE MAYOR AND CITY COUNCIL
GEORGE RODERICKS, CITY MANAGER
FROM: ROBERT OVADIA, PUBLIC WORKS DIRECTOR
DATE: DECEMBER 6, 2023
SUBJECT: AMENDMENT TO LEASE AGREEMENT WITH
MADEMOISELLE COLETTE TO ADJUST THE RENT
DEFERRAL PERIOD FOR THE CAFÉ AT THE LIBRARY
RECOMMENDATION
It is recommended that the Council consider an amendment to the current lease agreement with Mademoiselle Colette, Inc., for the café located at the Atherton Library in the Historic Town Hall building, extending the initial rent deferral period; authorize the City Attorney to prepare the lease amendment; and authorize the City Manager to execute the amendment.
BACKGROUND
Following completion of the new Town Center and Library complex, the Town entered into a lease agreement with Mademoiselle Collette, Inc., for a new café at the Atherton Library, in the Historic Town Hall Building. The lease agreement commenced on July 1, 2023, with an initial term of five (5) years, extendable for one (1) additional five (5) year term upon mutual agreement. Monthly rent is set at 4% of gross receipts generated in the previous month of operations, capped at $35,000 annually during the initial lease term. In consideration of the cost of tenant improvements, time to complete the improvements and allow for operational startup, the tenant’s rent obligation was deferred, with a commencement date of July 1, 2023.
Due to various issues, related to obtaining a contractor and delays in completing construction, the café did not open until September 24, 2023.
ANALYSIS
On October 11, 2023, following opening of the café, the City Manager received email correspondence from Debora Ferrand, CEO of Mademoiselle Colette, Inc., requesting an extension of the rent deferral period through March 2024, along with assistance with getting the word out regarding the opening of the cafe.
Mademoiselle Colette Lease Amendment
DECEMBER 6, 2023
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5 The email advised that they had hit a number of operational issues which prevented them from opening on-time and that the cost of completing the tenant improvements were 100% over budget.
Though there is positive feedback regarding the café and its offerings, business has been slower than expected. Additionally, there is a concern regarding the coming winter and potential sales drop with lack of indoor seating.
The request is intended to assist in making up for lost time in opening the café and in setting the café on a more stable starting foundation to maintain operations and is supported by staff. If approved, rent payments would commence on May 1, 2024, based on revenue generated in April 2024.
Staff has already addressed the issue of an address and additional advertising via Town channels.
However, the Council may also wish to discuss with Ms. Ferrand any other areas, to include but not be limited to, hours of operation, status of liquor license, and winter operations.
FISCAL IMPACT
There is limited fiscal impact as rent is 4% of the café’s prior month’s receipts.
GOAL ALIGNMENT
This Report and its contents are in alignment with the following Council Policy Goals:
• Goal Area B – Preserve Small Town Character and Quality of Life • Goal Area C – Create and Expand the Town Center/Library
POLICY FOCUS
The Town Council discussion should focus on the desire to support the café at the Town Center during its initial months of operation as was intended with the lease agreement.
PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders –to include, but be not limited to, media outlets, school districts, Menlo Park Fire Protection District, service provides (water, power, and sewer), and regional elected officials.
COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has not been before a Town Committee or Commission Mademoiselle Colette Lease Amendment
DECEMBER 6, 2023
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5 ATTACHMENTS
1. Mademoiselle Colette Rent Deferral Request
2. Lease Agreement