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Staff Report
City Council
Item No. 6.D
Meeting Date: August 9, 2023
From: Ryan Hunt, Communications and Events Manager
Title: Concessionaire Agreement Renewal (City of Cathedral City & Kick Back Cinemas)
City Council
RECOMMENDATION:
To approve a Concessionaire Agreement with Kick Back Cinemas Cathedral City, LLC to operate the Cathedral City Community Amphitheater's concession stand.
BACKGROUND:
This is a proposed renewal of the Concessionaire Agreement between the City of Cathedral City and Kick Back Cinemas Cathedral City LLC, at the Community Amphitheater. Kick Back Cinemas has been managing the concession stand at this venue since a pilot program was established in October 2021.
The amphitheater is designed to serve as a multi -use venue f or concerts, food truck events, art shows, festivals, outdoor theater, private functions, and as a park for residents and visitors. It has a building located in the southwest corner of the park that contains space for a concession stand.
DISCUSSION:
The management team of the Mary Pickford Theatre (MPT), known as Kick Back Cinemas Cathedral City LLC, approached staff about a few enhancements that could make managing the concession stand a success for both the City and MPT:
• The City will provide an electrical outlet for a kettle corn popper that MPT can use outside the building on the West side or north corner near the front window. • Net Receipts shall be defined as Gross Sales Receipts of Kick Back Cinemas from all sources at the City Event minus the sum of sales tax, cost of goods, and a monthly internet connection for the Concession Stand not to exceed $450 per month, prorated per City Event per Month. An accounting of sales from each event, along with documented expenses and payment in U.S. dollars, s hall be made within 30 days of the end of each event.
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The MPT is located just down the street from the concession stand. Like the MPT, the operators of the concession stand would sell concessions items such as Popcorn, Hot Dogs, Candy, Fountain or Bottled Soda, Bottled Drinks, Bottled Water, Chips, Cookies, Kettle Corn, Cheese Corn, Coffee, or any other item currently being sold at the MPT that can also be served at the concession stand with its cooking limitations. It would have an exclusive for all conce ssion type items (popcorn, hot dogs, etc.) except for fountain or bottled soda, bottled drinks, bottled water, or cookies and chips that are sold as a meal package at the amphitheater space.
The operators would have the right to not open the concession st and for any event that does not expect to draw at least 100 guests per hour of the event. It would also have the right to directly negotiate the price of products with the lessee of the venue sold during private third-party events.
Having MPT down the str eet is ideal as the operators have the flexibility to send staff from the movie theater to the concession stand when needed. Throughout the years, the managers of the MPT have been partners in a variety of city -financed venues. They have a track record of being honest brokers for record keeping and good property managers.
FISCAL IMPACT:
In lieu of rent, the operators have offered a very generous payment formula allow ing the City to generate revenue to help offset costs of operating, maintaining, and generating a facility reserve fund for improving or replacing wear and tear on equipment.
The operators have offered the following financial formula if they are chosen, once again, to operate the concession stand as a pilot program for the first year:
The operators shall pay the City a license fee (“License Fee”) in the amount of 40% of the Net Revenue Sales for each event which they operate the concession stand for public and private third -party events. Net Sales shall be defined as Gross Sales of Products minus the sum of Sales Tax, Cost of Goods, and a monthly internet connection for the Concession Stand that said connection cost does not exceed $450 per month. An accounting of sales from each event, along with documented expenses and payment in U.S. dollars, shall be made within 30 days of the end of each event.
FIVE-YEAR STRATEGIC PLAN:
Action F-6: Promote additional community events and celebrations.
ATTACHMENTS:
Concessionaire Agreement - Cathedral City Community Amphitheater (BWS ESV Edits
12.19.19) 4849-3950-2765 v.6