DATE:
July 5, 2023
TO:
Paul Buddenhagen, City Manager
FROM:
John I. Kennedy, City Attorney
Mohamed Alaoui, Public Works Director
SUBJECT:
Resolution Of The City Council Of The City Of Emeryville Approving Second Amended And Restated Sport Fishing Concessions Agreement Between The City Of Emeryville And Andrew Guiliano D/B/A Fishemeryville Inc.
Recommendation
Staff recommends the City Council adopt the proposed resolution approving the Second Amended and Restated Sport Fishing Concessions Agreement Between the City of Emeryville and Andrew Guiliano d/b/a FishEmeryville Inc. and authorize the City Manager to execute the agreement.
Background
On October 25, 2019, the City entered into an Amended and Restated Sport Fishing Concessions Agreement with Andrew Guiliano for sport fishing concession operations at the Emeryville Marina. The initial term of that agreement ends on December 31, 2023.
The Amended and Restated Sport Fishing Concessions Agreement grants to Mr. Guiliano the exclusive right to book passengers for businesses operating sport fishing boats berthed at the Marina. Under that agreement, Mr. Guiliano also has the right to sell fishing licenses, rent and sell fishing equipment, rent and sell fishing tackle and supplies, and sell food and beverages. The concession is a desirable use which generates significant fishing activity at the Marina and brings patrons to the City.
Also under that agreement, Mr. Guiliano receives as compensation for booking passengers a Percentage Fee of 7.5% of gross revenues. “Gross Revenues” are those revenues generated from the sales of tickets, food and beverages, and from rentals of equipment, either by Mr. Guiliano or by the individual boat operators. In lieu of the Business License Tax normally due from the boat operators, Mr. Guiliano collects and remits to the City a City Tax of 2.5% of gross revenues. The 2.5% City Tax is in addition to the 7.5% Percentage Fee paid to Mr. Guiliano.
For the January 2022 to December 2022 period, the City collected approximately $78,146.62 from the 2.5% City Tax. The normal Business License Tax would have generated about $3,125.87. Thus, the current agreement with Mr. Guiliano represents approximately $75,020.75 in additional revenue over the collection of a Business License Tax.
Under the City’s current agreement with Mr. Guiliano, the City Manager is authorized to extend the term of the agreement for an additional 5 years. However, Mr. Guiliano has requested material changes to be incorporated into his renewed agreement, which requires staff to bring the Second Amended and Restated Sport Fishing Concessions Agreement to Council for approval.
Discussion
The Second Amended and Restated Sport Fishing Concessions Agreement is largely on the same terms and conditions as the current agreement with Mr. Guiliano, except for the following material changes requested by Mr. Guiliano:
Mr. Guiliano has requested that his Percentage Rate (i.e., compensation) of 7.5% of gross revenues be increased to 10% of gross revenues. Section IV.B of the new agreement reflects the increase to 10%. The City Tax will not change and the City will continue to receive the same rate of 2.5% of gross revenues as provided in Section IV.C.
Mr. Guiliano currently operates his business through a California S corporation that he owns with his wife. As such, the Second Amended and Restated Sport Fishing Concessions Agreement identifies him as “Andrew Guiliano d/b/a FishEmeryville Inc., a California stock corporation.” Also, the new agreement contains a provision under Section V.A that requires Mr. Guiliano to provide the City with 90-days notice in the event of the sale or transfer of any interest in FishEmeryville Inc. greater than 49% to a third-party. The City, in its sole discretion, may terminate the agreement upon such sale or transfer.
New Section IV.D.3 requires that all boat operators and their equipment meet US Coast Guard and California Department of Fish & Wildlife requirements and that boat operators must be in good standing with those agencies in order to be assigned sport fishing passengers by the concessionaire.
Per Section III.A, the term of the Second Amended and Restated Sport Fishing Concessions Agreement will end on December 31, 2028.
Mr. Guiliano has reviewed the Second Amended and Restated Sport Fishing Concessions Agreement prepared by staff and he agrees to the terms and language therein. Mr. Guiliano has also represented to staff that the boat operators have agreed to an increase of the Percentage Rate from 7.5% to 10%.
Fiscal Impact
The discussion above details the revenue received under the current agreement ($78,146.62) in contrast to the projected annual tax revenue received from Business License Tax from individual boat operators ($3,125.87). Under the new agreement, the City would continue to receive 2.5% of gross revenues, remitted on a monthly basis.
Staff Communication with the Public
There was no staff communication with the public regarding this item.
Conflict of Interest
None.
Conclusion
Staff recommends that the City Council approve the Second Amended and Restated Sport Fishing Concessions Agreement between the City of Emeryville and Andrew Guiliano d/b/a FishEmervyille Inc. and authorize the City Manager to execute the Agreement.
PREPARED BY: John I. Kennedy, City Attorney
Approved and Forwarded to the
CITY COUNCIL:
Paul Buddenhagen, City Manager
Attachments
Assignment Agreement
Amended and Restated Sport Fishing Concessions Agreement Draft Resolution
Exhibit A – Second Amended and Restated Sport Fishing Concessions Agreement Second Amended and Restated Sport Fishing Concessions Agreement City Council Meeting | July 5, 2023
City of Emeryville
CALIFORNIA
MEMORANDUM