DATE: October 27, 2022
TO: Council Airport Committee
FROM: Director of Public Works
SUBJECT:
Raja Indian Cuisine – New Ground Lease for Property at 1275 West Winton Avenue
RECOMMENDATION
That the Council Airport Committee (CAC) reviews this report and provides comments and a recommendation to the Council to move forward with a new ground lease with Raja Indian Cuisine.
SUMMARY
Raja entered into an assignment in 2002 for the leasehold previously held by Manzella’s Seafood Loft after the latter decided to sell their leasehold interest. The restaurant is located at 1275 West Winton Avenue and encompasses 60,437 square feet.
The current lease agreement expires in January 2023. However, the principals of the restaurant desire to enter into a new lease agreement with the following deal points:
Thirty-five-year lease term
A rent increase to $5,540.06 per month
Significant interior and exterior capital improvements totaling approximately $1 million This item was initially presented to the CAC during their June 24, 2022 meeting. After review, the CAC suggested changes to the building façade and landscaping plan, commensurate with other improvements planned for the West Winton corridor near the Airport.
BACKGROUND
The subject parcel of land is located on the south side of the Airport at 1275 West Winton Avenue and encompasses 1.4 acres. The property was originally leased to Manzella’s Seafood Loft (Manzella) restaurant in 1972. However, in 2002, Manzella sold their restaurant and leasehold interest to Makhan Bains and Ravinder Singh.
Now known as Raja Indian Cuisine, the restaurant’s business primarily focuses on catering, with limited walk-in traffic.
DISCUSSION
The lease term commenced on February 1, 1973 and ends on January 31, 2023. However, the principals have requested a new lease. Their leasehold is 60,437 square feet, or approximately 1.4 acres, and contains one building for the restaurant, and outdoor parking.
The following revisions are proposed:
General Terms
The new lease will have a term of thirty-five years.
Fifty years was requested, but the Airport rarely enters into such lease agreements, the maximum permitted under the City Charter and by the Federal Aviation Administration (FAA). The term limit is a function of future job production and capital investment.
For refurbishments and improvements to existing buildings, a thirty-five-year lease is appropriate and consistent with past tenants who proposed similar capital improvements.
The new lease will take effect on the first day of the month after full execution of the agreement.
Rent is currently $1,510.93 per month but will increase to $5,540.06 per month.
During the construction period, which is expected to take approximately nine months, the Airport would consider a reduced rental amount until the improvements are completed and a Certificate of Occupancy is issued, and then full rent would be assessed.
Capital Improvements
Per input from CAC members, the proponents for Raja provided an enhanced version of the project, including a more detailed narrative outlining the proposed improvements, as well as revised and enhanced renderings that better depict the vision for the restaurant (Attachment III). Special attention was paid to developing architectural features commensurate with the West Winton corridor, as the restaurant will be a high-visibility gateway to that corridor.
Exterior Improvements
Addition of new architectural feature shown as “tower element” in the front elevation of the building, existing sloping roof to the east and west wings of the entrance shall be improved to match the roof of the new tower. This will be new construction to provide a covered entrance to the building together with construction of new vestibule area with storefront glass and sliding doors as well as the new roof for the east and west wings.
This extension will include new construction with architectural columns and tower element with new building signage and art fixtures.
New ornate wall light fixtures will also be installed.
The tower will have backlit art features and new signage on three sides of the tower as well as along the front (south) elevation and the east elevation.
The façade of the existing wings to the east and west will be improved with new decorative architectural metal panels replacing existing angled wood panels without dividing trim, and six light fixtures.
New double sliding doors and storefront windows will be installed to provide for a new entry vestibule, which will be designed and added to the building.
The three remaining exterior elevations (north, east and west) will be treated with new paint. Exterior walls will be replaced or repaired as needed and new paint and trim colors will be applied to enhance the building.
The east elevation will also feature a new, replica tower element similar to the front tower, with a new business sign enclosed within this feature. This will enhance the easterly elevation as viewed from West Winton Avenue.
A new or repaired monument sign will be installed to replace the existing monument sign.
Exterior improvements will also include re-surfacing and striping of the parking lot and upgrading existing landscape in compliance with FAA regulations for the Airport Wildlife Hazard Plan and the Water Efficient Landscape Ordinance.
This list of exterior improvements was reviewed by the City’s Landscape Architect and additional changes were incorporated:
Improvements to the existing sloping to the east and wings of the entrance so that they match the roof of the new tower New roof for the east and west wings
Improvements to the existing east and west wings via decorative metal panels that would replace the existing angled wood panels without divisions Upgrades to existing landscape should be in compliance with FAA regulations pertaining to the Airport Wildlife Hazard Plan and the City’s Water Efficient Landscape Ordinance.
The requested modifications have been discussed with the proponents, and they have agreed to change the renderings to reflect the noted changes.
Interior Improvements
The front entrance to the building will be redesigned with the new tower element and include new store front windows, a new entry with double sliding doors, a new vestibule with second set of double sliding doors leading to the restaurant, and a redesigned banquet hall.
The existing raised floor in the food service buffet area will be removed and replaced to the original floor, level with the rest of the interior building flooring.
Existing floor tiles will be removed and replaced with new flooring featuring newer, modern, and contemporary tiles and design patterns.
New floor base boards to match and enhance the new flooring will be installed.
The existing bar fixtures and cabinets will be removed and replaced with new bar and cabinetry. New shelving and undercounter appliances will be installed.
Both the men’s and women’s bathrooms will be fully remodeled and modernized in a contemporary style. Both restrooms will be upgraded to comply with ADA requirements.
Both restrooms will be gutted, removed, and re-constructed with new tile flooring and baseboards.
New bathroom stalls, shelves, cabinets, and faucets will be installed.
Existing stalls and toilet/urinals will be removed and reconstructed with new partitions and fixtures.
New vanity mirrors and light fixtures will be installed.
Interior walls of the restaurant/banquet hall will be repaired and repainted with accents and contemporary colors.
Four centrally located interior columns will be removed to provide a more open floor area to the restaurant/banquet hall. Interior structural framing will be redesigned to accomplish this new floor design.
New architectural light fixtures plus a new chandelier will be installed to enhance the new, redesigned floor space.
All previous code compliance items, including stairs and landing, second floor office space, and storage areas will be corrected per the City's Building Code. The DJ booth has already been removed as previously requested. All electrical items and electrical subpanels will be upgraded and corrected to meet City codes.
ECONOMIC IMPACT
Raja will provide employment opportunities for a variety of workers during the construction of the above noted capital improvements.
FISCAL IMPACT
As noted, Raja is currently paying $1,510.93 per month, or $18,131.16 per year. Under the terms of the new lease, the monthly amount would increase to $5,540.06 per month, or $66,480.70 annually; this new rate reflects the existing non-aeronautical rate charged to all aviation-related tenants of $1.10 per square foot, per year. This amount would remain the same until January 2023, where, along with the other land leases, it will be adjusted by the CPI and by no more than seven percent; this “capping” of the CPI at seven percent is included with other land leases at the Airport. This CPI adjustment is normal and customary for all land leases at the Airport. Assuming the maximum rate of 7%, the monthly rent would increase to $5,927.86 or $71,134.37 annually by January 2023. Therefore, the cumulative, maximum net annual increase by January 2023 over the current amount of $18,131.16 per year would be $53,003.21 ($71,134.37 minus $18,131.16).
STRATEGIC ROADMAP
This agenda item pertains to development at the Airport and does not directly relate to any of the six priorities outlined in the Council’s Strategic Roadmap.
SUSTAINABILITY FEATURES
The Airport is committed to developing projects that are environmentally responsible.
Therefore, staff will ensure than the work scope incorporates features that are in line with the City’s sustainability guidelines.
PUBLIC CONTACT
The agenda and staff report for this item have been posted on the City’s website and distributed to interested parties. In addition, Airport staff have held numerous meetings with Raja over the past year to finalize the terms of the new lease. Furthermore, this item was discussed at the CAC’s June 24, 2022 meeting.
NEXT STEPS
If approved by the CAC, staff will present this item for Council for consideration in November 2022.
Prepared by: Doug McNeeley, Airport Manager
Recommended by: Alex Ameri, Director of Public Works
Approved by:
Kelly McAdoo, City Manager