City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-01523 12/12/2023 Consent Item 8.
Suspend Competitive Bidding and Issue a Request for Proposals (RFP) and Enter into Negotiations with Hornblower Yachts, Inc., for Operations at the Old Sacramento Docks File ID: 2023-01523
Location: Old Sacramento Docks (“Site”), District 4, Represented by Councilmember Valenzuela Recommendation: Pass a Motion: 1) suspending competitive bidding for selection of operators at the Old Sacramento Docks; 2) allowing the use of a Request for Proposal (RFP) solicitation to select operators for use of the Old Sacramento Docks; and 3) authorizing the City Manager or the City Manager’s designee to enter into negotiations with Hornblower Yachts, Inc. dba City Cruises Anchored by Hornblower (“Hornblower”) for the continued use of the space they currently occupy at the Old Sacramento Docks.
Contact: Gale O’Neill, Contract and Compliance Specialist, (916) 808-7154, [email protected]; Dustin Hollingsworth, Assistant Director, (916) 808-5538, [email protected], Convention and Cultural Services Department Presenter: None.
Attachments:
1-Description/Analysis
2-Location Map
Description/Analysis
Issue Detail:
The Old Sacramento Docks (“Site”) is a system of City owned docks adjacent to Old Sacramento on the Sacramento River, comprised of the Passenger Boat Docks, L Street Barge and the Public Boat Docks, as shown in Attachment 2. The docks are situated on property owned by the State of California (“State”) and leased to the City through City Agreement No. 86013. The terms of the lease agreement with the State allow for the City to sublease the Site for the use of commerce and activation, subject to State approval.
Hornblower has operated passenger vessels at the Site since 2009. Originally Hornblower was awarded an exclusive Concession Agreement with a 10-year term and two 5-year extensions. One of the requirements of the agreement was for Hornblower to provide one vessel with a capacity of 300 passengers or more and one historic-style vessel with a capacity of 150 passengers or more. The
File ID: 2023-01523 12/12/2023 Consent Item 8.
historic-style vessel was to be put into operation by the commencement of the 6th year of operations.
Hornblower was unable to acquire a historic-style vessel to meet the requirement of the agreement and in 2017 the City amended the agreement with Hornblower removing the exclusivity of their operations and reducing the term of the agreement.
In 2018 the City issued a RFP to select operators to further activate the Site with a diverse offering of products. Through the RFP process 3 additional operators were awarded agreements for operations at the Site: Diversified Restaurant Concepts, dba River City Queen, Sac Brew Boat, LLC, and Sacramento River Tours, LLC dba Sacramento Jetboat Excursions. Each operator offers a unique experience to draw visitors to Old Sacramento. In 2022, the City revoked the agreement with Sacramento Jetboats after they failed to operate during the summer of 2022. At various points during 2024 all of the Agreements with all of the current operators will come to the end of their term.
Staff recommend that it is in the best interest of the City to suspend competitive bidding for the selection of operators at the Site. Hornblower, who has operations nationwide, has been a good partner with the City since 2009. While they were unable to secure a historic-style vessel to fulfill the obligations of the original agreement, they have proven to be an anchor tenant. They continually provide substantial draw and economic stimulus to the Old Sacramento Waterfront as well as financial benefits to the City. Additionally, Hornblower has invested in significant capital improvements for operations at the Site. It is in the best interest of the City to enter into exclusive negotiations with Hornblower with the intent of continuing their operations at the Site, including the ticket booth on the Embarcadero. The remaining locations at the site have demonstrated the benefit of providing a variety of options to further attract visitors to Old Sacramento. Therefore, it is also in the City’s best interest to solicit proposals through an RFP process for the operation of commercial vessels at the Site.
Policy Considerations: The recommendation in this report to suspend competitive bidding and to issue an RFP for a portion of the Site and to enter into exclusive negotiations with Hornblower for their continued operations at the Site, is in accordance with the provisions of Sacramento City Code section 3.72.120. The City Code section provides that competitive bidding may be suspended when the council determines that special circumstances make the use of the bid procedure inappropriate or when it determines that it is in the best interest of the City that the bid process is not used.
Economic Impacts: Collectively the agreements with the current operators at the site have generated gross sales of more than $5 million, with more than half of the gross sales derived from Hornblower’s operations. Additionally, Hornblower attracted an estimated 32,000 guests to the Old Sacramento Waterfront in 2023, near their 2019 pre-pandemic level of 36,000.
Environmental Considerations: The proposed activity is not subject to environmental review under the- California Environmental Quality Act (CEQA), California Code of Regulations, title 14, section 15378 because it is not a project under CEQA.
File ID: 2023-01523 12/12/2023 Consent Item 8.
Sustainability: The RFP will provide additional consideration for proposers who include a stewardship plan and whose operations reduce greenhouse gas emissions, conserve resources, and/or demonstrate adaptation to climate change impacts affecting Sacramento and its waterways.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The Old Sacramento riverboat program has been an important part of the visitor experience and proven to be a significant attraction for the Old Sacramento Waterfront since 1987. The operations contribute to the operating budget of Old Sacramento as well as serve as an economic stimulus to the business community of the City. Hornblower has been a partner to the City for almost 15 years; it has made significant investments in capital improvements to both the Site and the Embarcadero as part of its operations. The RFP process for the remaining dock space will allow the City to consider multiple criteria such as qualifications and experience, proposed use of the site, financial capability, sustainability, and financial plan, as well as potential revenue to be generated for the City.
Financial Considerations: Revenue from the Site’s operations have generated more than $360,000 in the past five fiscal years, with a high in FY2022/23 of $106,000 and a low in FY2020/21 of less than $25,000. The majority of these revenues come from the Hornblower, and the funds contribute to ongoing operational funding of the Convention and Cultural Services Department and to ongoing maintenance in Old Sacramento.
Local Business Enterprise (LBE): Not applicable.
Attachment 2
Location Map