Keith Kropfl
Principal, Director of Brokerage Services
[email protected]
Direct line: 949.430.0680
CA License: #01106628
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Broker Broker
Opinion Opinion
of Value of Value
May 2022May 2022
Avison Young
4 Park Plaza, Suite 330
Irvine, CA 92614
Visit us online
www.avisonyoung.com
City of Fullerton Outdoor Dining Lease Rate AnalysisCity of Fullerton Outdoor Dining Lease Rate Analysis City of Fullerton | Broker Opinion of Value
2 Table of
contents
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Executive Summary
City Restaurants Districts
Outdoor Patio Areas
Valuation
The Consumer Price Index
Outdoor Dining Guidelines
O utdoor Dining
Lease Applicaiton
Meet the Team
Retail Services
01 02
03 04
05 06
07 08
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Executive
Summary
01 City of Fullerton | Broker Opinion of Value
4 Executive Summary
City of Fullerton
Opinion of Value – Restaurant Patio Rent Reset
This report is based upon our preliminary estimate of the City of Fullerton’s request to evaluate rent pricing for restaurant patio space throughout the city.
The following report details current rent structures that were established in 2012 and todays reset values given Consumer Price Index (CPI) up until 2022.
The report also includes the City of Fullerton’s Outdoor Dining Guidelines and Outdoor Dining Application.
The attached information is believed to be accurate and reliable, but due to the preliminary nature of our inves- tigation and the complexity of the issues involving restaurant revenues and health ratios (profitability), certain generalities have been utilized based on our experience.
Avison Young, on behalf of the City of Fullerton has devoted a great deal of energy and resources in compiling the enclosed report. It is our request that the enclosed information be kept strictly confidential and used solely for the benefit of City of Fullerton.
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02 City
Restaurant
Districts
City of Fullerton | Broker Opinion of Value
6 City Restaurant Districts
Downtown Fullerton
JP23 Urban
Heroes Bar
J’s Korean
Fullerton Train Station
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03 Outdoor
Patio Areas
City of Fullerton | Broker Opinion of Value
8 Outdoor
Patio Areas
City of Fullerton | Broker Opinion of Value
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04 Valuation
City of Fullerton | Broker Opinion of Value
10 CY2011 CY2012 CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 Mar2022 YTD
Index [1] 224.939 229.594 232.957 236.736 237.017 240.011 245.12 251.107 255.657 258.811 270.97 287.504 Change 4.655 3.363 3.779 0.281 2.994 5.109 5.987 4.55 3.154 12.159 16.534 Change (%) 2.07% 1.46% 1.62% 0.12% 1.26% 2.13% 2.44% 1.81% 1.23% 4.70% 6.10% Rates:
No Liquor $0.45 $0.46 $0.47 $0.47 $0.47 $0.48 $0.49 $0.50 $0.51 $0.52 $0.54 $0.58 Beer/Wine Only $0.89 $0.91 $0.92 $0.94 $0.94 $0.95 $0.97 $0.99 $1.01 $1.02 $1.07 $1.14 Full Liquor $1.34 $1.37 $1.39 $1.41 $1.41 $1.43 $1.46 $1.50 $1.52 $1.54 $1.61 $1.71 Note(s):
[1] Source: American Consumer Price Index: 1913-2022; Base Year: 1982-84=100. Index for CY2022 is as of March, 2022.
Valuation
Restaurant Patio Rent Reset
NOTE(S):
[1] Source: American Consumer Price Index: 1913-2022; Base Year: 1982-84=100. Index for CY2022 is as of March, 2022. [2] Rent pricing is based on per square foot of patio dining areas.
City of Fullerton | Broker Opinion of Value
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The Consumer
Price Index
05 City of Fullerton | Broker Opinion of Value
12 The Consumer
Price Index
The CPI is a measure that examines the weighted average of prices of a basket of goods and ser- vices which are of primary consumer need. They include transportation, food, and medical care.
CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them based on their relative weight in the whole basket. The prices in consideration are the retail prices of each item, as available for purchase by the individual citizens.
Changes in the CPI are used to assess price changes associated with the cost of living, making it one of the most frequently used statistics for identifying periods of inflation or deflation. In the U.S., the Bureau of Labor Statistics reports the CPI on a monthly basis and has calculated it as far back as 1913.
City of Fullerton | Broker Opinion of Value
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06 Outdoor Dining
Guidelines
City of Fullerton | Broker Opinion of Value
14 Outdoor Dining
Guidelines
Purpose & Applicability
The purpose of these guidelines is to provide criteria to facilitate outdoor dining use within the public right-of-way and/or on private property while protecting the public interest. The guidelines apply to outdoor dining associated with an existing/permitted adjacent restaurant, café, bar, or nightclub that wishes to incorporate outdoor dining on public property or within the public right-of-way directly adjacent to their establishment. Areas of encroachment for outdoor dining include, but may not be limited to:
• • Sidewalks
• • Alleyways (not used for emergency or vehicle traffic) • • Parking lots
• • Plazas
Submittal Requirements
1. Application Package
By submitting the completed application package, the Applicant affirms they have obtained concurrence of encroachment in the public right-of-way from surrounding properties that may be impacted in any way.
The Standard Outdoor Dining application package is comprised of the following items:
a. Application for Standard Outdoor Dining Within the Public Right-of-Way (herein after, Application), which may be obtained in-person or on-line from the Public Works Department - Engineering Division. The Application shall be completed and signed by the business owner/operator and the property owner. i. The Application is subject to a standard processing/review fee as established as part of the current City of Fullerton Council adopted fee schedule. i. The Application will require a preferred method of billing upon implementation of the outdoor dining improvements. iii. If alcohol is proposed to be served within the outdoor dining area, the Applicant shall include a copy of their current liquor license. b. Site Plan - An 8½x11” or 11”x17” site plan showing limits and details of the proposed outdoor dining area, including but not limited to general layout, clearances, and dimension of the proposed outdoor dining area and environs, as well as locations and types of furnishings.
As may be applicable, details pertaining to fencing, enclosures, or other structural improvements, used for the outdoor dining shall be shown.
City of Fullerton | Broker Opinion of Value
15 Site plans shall also illustrate (L’ x W’) of area requested; show all existing improvements (curb/gutter, sidewalk, ramps, driveways, parking stalls, street lights, trees, fire hydrants, or other infrastructure) that may limit clearance for pedestrian access; and dimensions between the requested outdoor dining area and any existing improvements within the immediate vicinity. c. Letter of Authorization - Applicant is required to submit a letter from his/her landlord allowing the outdoor dining at the site and the installation of associated improvements. The letter should also acknowledge that the landlord understands that he/she will be held equally liable per the terms of the agreement and will be required to execute the Standard Outdoor Dining - Encroachment Agreement.
2. Application Review Process
The review process for the Standard Outdoor Dining application package will be the following:
a. The business owner/operator and the property owner shall submit a completed Application package to Engineering. b. Engineering will review the Application package for completeness. Upon review of the completed Application, Engineering will:
i. Review the plans for compliance with the adopted Standard Outdoor Dining Guidelines, or; ii. Reject the request. The City reserves the right to reject any Application, at its sole and absolute discretion. c. Engineering will forward their findings of compliance to the Director of Community & Economic Development and the Fire Marshal to receive their determinations of concurrence with the compliance findings of Engineering. d. Engineering will notify the business owner/operator and/or property owner of the City’s findings of compliance and will advise the applicant if any revisions to the original documentation are required.
e. Upon acceptance of the application documentation, the Public Works Director shall determine the need for City Council approval for use of public land. f. If City Council approval is determined, Engineering will present the Application to Council for approval or denial. If the Council denies the Application, the Application is considered rejected.
g. Upon City Council approval and/or Engineering acceptance of the Application documentation, Engineering will request the Applicant complete an Encroachment Agreement Application.
h. The Encroachment Agreement Application is subject to a processing fee established as part of the current City of Fullerton Council adopted fee schedule.
Submittal Requirements (continued)
City of Fullerton | Broker Opinion of Value
16 Submittal Requirements (continued)
i. Upon receipt of the Encroachment Agreement Application and processing fee, the City will prepare a Standard Outdoor Dining Encroachment Agreement (herein after, Agreement). All outdoor dining areas (regardless of exclusivity/fencing) will require an Agreement. i. Engineering will determine the leasable area and the lease rate for the outdoor dining area subject to the Agreement.
1. Leasable Area
The area of use through the process may, or may not, include fencing or other approved means that effectively restrict or discourage the public from using the space. In general, the leasable area will be defined by the perimeter of the outdoor dining area, including any path(s) of travel by the public through the seating area as delineated on the site plan submitted as part of the Application Package. Engineering will use discretion in determining leasable area to account for practical considerations such as trees and other obstructions.
2. Lease Rates
Applicants have the option of monthly or annual billing of lease fees, option must be selected at the time of application.
Monthly/annual lease rates are to be waived for restaurants with outdoor dining on public property of less than 100 s.f. and without alcohol service. However, an encroachment agreement, subject to the processing fee is required to secure indemnification and other liability safeguards for the City. Lease rates are subject to change and are established as part of the current Council adopted fee schedule.
3. Parking Revenue Loss
If the outdoor dining area is located within a City owned paid parking lot/structure, the applicant will be responsible for any parking revenue loss incurred by the City. For example, in 2022 the paid parking program required a flat rate of $5/space on Thursday, Friday, & Saturday from 9pm – 1am. Therefore, the applicant would be billed an additional$60/month for each parking stall utilized for outdoor dining. The monthly rate per stall is subject to change based on the program parameters at the time the Agreement is up for renewal. ii. A fully refundable restoration deposit will be required prior to execution of the Agreement. The restoration deposit is established by Council as part of the current Council adopted fee schedule. The actual restoration fee will be determined at the time of restoration by the Director of Public Works.
Restoration deposits may be transferable at the Director of Public Works discretion. iii. The Applicant shall maintain the required liability and liquor liability (if applicable) insurance as defined in the Agreement. The limits of liability for the required insurance are subject to change in accordance with the City’s minimum limit requirements in effect at the time of renewal of said coverage.
j. The City will provide a final copy of the Agreement for signature by the business owner/operator and property owner. k. Upon review and acceptance of the fully executed Agreement, Engineering will prepare and issue an Encroachment Permit to the Applicant to ensure construction/installation of the outdoor dining area is per the approved site plan and terms of the Agreement.
City of Fullerton | Broker Opinion of Value
17 1. Permitted Uses
Outdoor dining areas shall be limited to serving and consumption of food and non-alcoholic beverages, unless authorized otherwise by The California Department of Alcoholic Beverage Control. The issuance of an Agreement for outdoor dining does not authorize alcoholic beverages that otherwise require approval under FMC 15.30. The serving of alcoholic beverages in the outdoor dining area may be subject to the City’s ARUP or CUP process, as determined by the Director of Community & Economic Development.
Uses that generate excessive noise such as amplified music are not permitted in the outdoor area.
2. Design Criteria
The Director of Public Works, or his/her designee, in coordination with the Director of Community & Economic Development, shall find consistency between the Application and the following criteria:
a. Compatibility
The design materials and color used for chairs, tables, lighting, and other fixtures/furniture, including umbrellas, shall be of good quality, as necessary to assure a pleasing and pleasant ambiance.
b. Public Walkway Clearance and Accessibility
A clear passage area on the public sidewalk, alley, or parking lot, free of all obstructions, shall be maintained at all times to avoid hazardous conditions for pedestrians. The Director of Public Works, or his/her designee, may approve minor variations, including less restrictive clearance requirements for a single point restriction such as a street light or tree; however, under no circumstances shall a path of travel be less than six (6) feet wide. Outdoor Dining areas shall be fully accessible for persons with physical disabilities and provide safe passing conditions. c. Sightlines
Whenever applicable, furnishings shall not restrict motor vehicle sight lines. d. Entry Door Clearance
The encroaching furnishings will not impede entry to the building and must not preclude applicable emergency exit requirements (i.e., a minimum exit width of 44” must be maintained at all times for “single” entry doors; however, large door openings require larger exit widths per the building code.) Operational Requirements
City of Fullerton | Broker Opinion of Value
18 e. Floor Plan
The aisle width between tables/seating shall be a minimum of 36”. The occupant load factor is 1 person/15 square feet. If the interior dining area exits through the outdoor dining area, an equivalent exit “corridor” width shall be maintained at all times.such as a street light or tree; however, under no circumstances shall a path of travel be less than six (6) feet wide. Outdoor Dining areas shall be fully accessible for persons with physical disabilities and provide safe passing conditions.
f. Structural Improvements, Enclosures, and Furniture
Fencing/enclosure must be of an easily removable design. All fences and/or enclosures should be of durable material, fire safe, structurally sound, aesthetically pleasing, and compatible with adjoining improvements or structures. If the area requested is in an area where vehicular traffic occurs, barriers shall be substantive enough to protect customers and employees from impact.
The design materials and colors used for chairs, tables, lighting, and other fixtures, including umbrellas, shall be of good quality, as necessary to assure a pleasing and pleasant ambiance. Said removable furnishings shall be secured in a safe manner during use.
Fences and furnishing must be maintained in good condition and placed/secured in such a way so as not to impede public safety. Permanently affixed furnishings and fencing are not permitted.
g. Fire Department Standards
All Fire Department regulations and standards concerning exterior lighting and power shall be met. These regulations and standards will be supplied to applicant upon request at the time of application.
Fire Department approval and permits shall be obtained for LPG heaters and open flames, including candles and barbeques (if applicable), consistent with Fire Department Standards #57 and #58.
Operational Requirements (continued)
City of Fullerton | Broker Opinion of Value
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Outdoor Dining
Lease Application
07 City of Fullerton | Broker Opinion of Value
20 PUBLIC WORKS DEPARTMENT
ENGINEERING DIVISION
APPLICATION FOR
STANDARD OUTDOOR DINING
WITHIN THE PUBLIC RIGHT-OF-WAY
This form and all required attachments are to be submitted to the City of Fullerton - Engineering Division,
303 W. Commonwealth Avenue, Fullerton, CA. 92832
Phone: (714) 738-6845 * E-mail: [email protected]
Date:
Received By:
Applicant (Full Name/Title):
Business Name & Mailing Address:
Phone: _____E-mail: _________________________________________________
Proposed Location of Encroachment:
Street Address:
Description of Encroachment:
Property Owner Contact Information
Property Owner (Full Name/Title):
Address:
Phone: E-mail:
Emergency Contact Name:
Information:
Daytime Phone: Evening Phone:
E-mail:
NOTE: Please review the Standard Outdoor Dining Guidelines prior to completion and submission of this application
(See Reverse for Submission Requirements)
Applicant Submission Requirements:
1. One Time Non-refundable Processing/Review Fee: $ 286.00
2. Two sets of site plan(s), architectural drawing(s) and/or survey of property (electronic pdf format and preliminary drawings are acceptable at this stage).
3. Based upon the type of liquor license held, a copy of which is to be submitted at the time of application, a monthly lease rate will be charged for outdoor dining within the public right-of-way. The applicable rates currently are as follow s: No Liquor, $0.30/s.f. ($3.60/s.f. annually); Beer and Wine only, $0.60/s.f. ($7.20s.f. annually); Full Liquor Service, $0.90/s.f. ($10.80/s.f. annually). Note: lease rates are subject to change.
If the outdoor dining area is located within a City owned paid parking lot/structure, the applicant will be responsible for any parking revenue loss incurred by the City. Currently, the paid parking program requires a flat rate of $5/space on Thursday, Friday, & Saturday from 9pm – 1am. Therefore, the applicate will be billed an additional $60/month for each parking stall utilized for outdoor dining.
Please indicate how you would like to be billed for your lease below:
Please bill me: □ Monthly □ Annually for my lease.
4. Letter of Authorization: Applicant is required to submit a letter from his/her landlord allowing the outdoor dining at the site and the installation of associated improvements. The letter should also acknowledge that the landlord understands that he/she will be held equally liable per the terms of the agreement and will be required to execute the Standard Outdoor Dining Encroachment Agreement upon acceptance of this application. See the Standard Outdoor Dining Guidelines for more information.
Application Processing:
Processing of your Standard Outdoor Dining application package will take approximately 8-12 weeks from date of submission, depending on the need for City Council approval for use of public property; please refer to the Standard Outdoor Dining Guidelines for more detailed information on application processing.
Outdoor Dining
Lease Application
City of Fullerton | Broker Opinion of Value
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Meet the Team
08 City of Fullerton | Broker Opinion of Value
22 “We have successfully engaged
Avison Young in multiple
markets throughout the
Southeast. They have great
depth and experience in their
organization, and we have been
extremely happy with the results
driven by our relationship.”
- Howard Spiva, Development Director, Barnes & Noble
“We are not merely a client to
Avison Young, we feel they view
us as a partner. Their depth
in experience coupled with
candor and ability to execute is
refreshing.”
- Howard Spiva, Development Director, Barnes & Noble
“The success of Avison young is
a reflection of the confidence
placed in us by our clients”
- Graeme Young, Founder
“Diligent, hard working,
and very professional.
Keith Kropfl, Principal,
always exceeds my
expectations.”
- Dennis Linville, Director of Real Estate
Keith J. Kropfl has been active in the sale and leasing of commercial retail, industrial and office properties for over 25 years. His experience includes tenant buyer representation, development, lease negotiation, sales, property management and commercial financing. He has an extensive track record with corporate clients and consistently services his clients with a high degree of professionalism and integrity.
Prior to joining Avison Young, Mr. Kropfl worked for Voit Real Estate Services and Travers Realty Corporation, specializing in landlord and tenant representation, Grubb & Ellis, specializing in landlord and tenant representation, and Alden Equities Group, specializing in the sale, leasing, management, receivership, appraisal valuation and development of all types of commercial properties.
Keith Kropfl
Principal, Director of
Brokerage Services - Orange County
[email protected]
Direct line: 949.430.0680
CA License: #01106628
Meet the team
City of Fullerton | Broker Opinion of Value
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09 Retail
Services
City of Fullerton | Broker Opinion of Value
24 Avison Young is the world’s fastest-growing commercial real estate services firm.
Headquartered in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its principals. Founded in 1978, the company comprises 2,600 real estate professionals in 84 offices , providing value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial, multi-family and hospitality properties. 100+
offices worldwide
real estate
professionals
5,000
brokers
1,100+
retail brokers
125+
sf under
property management
215m
SF AY-managed
retail projects
45m
SF AY-managed retail
projects in U.S.
10.7m
project
management
597
At a
GlanceGlobal presence
Retail Services
Transaction Services
- Tenant representation, lease
acquisition and disposition
- Investment acquisition and
disposition for owners and occupiers
- Landlord representation—all
property types—office, industrial,
retail, build-to-suit,land and multi-
family
Consulting and Advisory Services
- Portfolio review and analysis
- Valuation and appraisal
- Benchmarking
- Transaction management
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- Mergers and acquisitions
- Workplace solutions
- Acquisitions and dispositions
Management Services
- Project management
- Property and operations review
- Property/facility management
- Tenant coordination and relations
- Financial reporting
- Lease administration
- Operations consulting
- First stage lease review
Enterprise Solutions
- Integrated services coordination
- Transaction management
- Optimization strategies
- Portfolio lease administration
- Project coordination and reporting
Investment Management
- Acquisitions
- Asset management
- Portfolio strategy
- Capital repositioning
Debt Capital Services
- Permanent & construction
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- Portfolio mark to market
- Mezzanine & bridge
City of Fullerton | Broker Opinion of Value
25 Avison Y oung
has a Proven Track Record of
Exceeding Client Expectations
Core Services
Capital Markets /
Investment Sales
Project Management
Consulting Property Management Landlord Representation
T enant Representation
Whether you are an occupier or owner/investor, we
are able to deliver truly integrated solutions to meet
your unique need.
Asset T ypes
- Enclosed Malls
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- Outlet Retail
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- Street Front
For more information,
please contact:
© 2022 Avison Young – Southern California, Ltd. All rights reserved.
E. & O.E.: The information contained herein was obtained from sources which we deem reliable and, while thought to be correct, is not guaranteed by Avison Young.
Keith Kropfl
Principal, Director of Brokerage Services
[email protected]
Direct line: 949.430.0680
CA License: #01106628
Christina Saas
Marketing Coordinator
[email protected]
Direct line: 949.430.0682
CA License: #01895226
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Avison Young
4 Park Plaza, Suite 330
Irvine, CA 92614
Visit us online
www.avisonyoung.com