2011-27811 Resolution RESOLUTION NO. 2011-27811
A RESOLUTION WAIVING, BY 5/7THS VOTE, THE COMPETITIVE BIDDING
REQUIREMENT, FINDING SUCH WAIVER TO BE IN THE BEST INTEREST OF
THE CITY, AND APPROVING A PUBLIC BEACHFRONT CONCESSION
AGREEMENT BETWEEN THE CITY AND BOUCHER BROTHERS MIAMI
BEACH, LLC, FOR THE EXCLUSIVE RIGHT TO OPERATE CERTAIN
CONCESSIONS IN LUMMUS PARK,OCEAN TERRACE,NORTH SHORE OPEN
SPACE PARK, AND SOUTH POINTE PARK BEACH, IN MIAMI BEACH,
FLORIDA, FOR THE RENTAL OF BEACH EQUIPMENT, FOOD AND
BEVERAGE SERVICE, SALE OF BEACH-RELATED SUNDRIES AND SKIN
CARE PRODUCTS, AND WATERSPORTS EQUIPMENT RENTALS; SAID
AGREEMENT HAVING A FIVE (5) YEAR INITIAL TERM, COMMENCING
RETROACTIVELY ON NOVEMBER 5, 2011,AND ENDING ON NOVEMBER 4,
2016, AND PROVIDING FOR A FIVE (5) YEAR RENEWAL TERM WHICH IS
EXERCISABLE BY THE CITY; FURTHER RETROACTIVELY APPROVING THE
CITY MANAGER'S EXTENSION OF THE CURRENT CONCESSION
AGREEMENT FROM NOVEMBER 5, 2011, TO DECEMBER 14, 2011.
WHEREAS, on February 21,2001,the Mayor and City Commission adopted Resolution No
2001-24256, authorizing the issuance of an RPP which resulted in the selection of Boucher Brothers
Miami Beach, LLC (Boucher Brothers) for the operation and management of beachfront
concessions including beach equipment rentals,food and beverage sales,and watersport rentals on
the beaches seaward of Lummus Park, Ocean Terrace and North Shore Open Space Park; and
WHEREAS, on July 18, 2001, the Mayor and City Commission adopted Resolution No
2001-24533, authorizing the City Administration to negotiate with Boucher Brothers, as the
successful proposer; and
WHEREAS,on October 17, 2001,the Mayor and City Commission adopted Resolution No
2001-24646, approving and authorizing the Mayor and City Clerk to execute a Concession
Agreement with Boucher Brothers for the operation and management of beachfront concessions
including beach equipment rentals, food and verage sales, and watersport rentals on the beaches
seaward of Lummus Park, Ocean Terrace and North Shore Open Space Park; said Agreement
commenced on November 5, 2001, through November 4, 2006, with an option to renew for an
additional five (5) year term, and
WHEREAS, on May 18, 2005, the Mayor and City Commission adopted Resolution No
2005-25884, authorizing the execution of an Amended and Restated Concession Agreement to
memorialize certain operational issues which were not included in the original agreement; and
WHEREAS,on January 11, 2006,the Mayor and City Commission adopted Resolution No
2006-26102, approving an Amendment to the Amended and Restated Concession Agreement;said
Amendment providing for renewal of the Agreement for five (5) years, from November 5, 2006, to
November 4, 2011, and memorializing cetain value-added enhancements from the Concessionaire
to the City; and
WHEREAS, on April 16, 2008, the Mayor and City Commission adopted Resolution No
2008-26788, approving a Second Amendment to the Concession Agreement, said Amendment
providing for the addition of a concession area adjacent to Bandshell Park, and
WHEREAS, on July 15, 2009,the Mayor and City Commission adopted Resultion No.2009-
27127, approving a Third Amendment to Amended and Restated Beachfront Concession
Agreement, which provided for the reconfiguration of a fenced storage area for storage and for a
dumpster facility; and
WHEREAS, during the City Commission retreat on May 20 and 21, 2011, a discussion was
held regarding the aforestated Concession Agreement, which included discussion on whether to
proceed to issue a new competitive solicitation (in light of the imminent expiration of the Agreement),
and
WHEREAS, Boucher Brothers is a known entity, with the organizational experience and
capacity to continue to operate in Miami Beach, there is a mutual interest in continuing to
consistently service our public beach areas, but with additional options that can generate potential
new revenue for the City; and
WHEREAS, in light of satisfaction with the performance of the Boucher Brothers'
performance under the current Concession Agreement, and a desire to ensure that a new
negotiated concession agreement addresses additional desirable items, such as non-motorized
watersports in North Beach, additional cleaning services, and the installation of beach lockers,the
City Administration began negotiating with Boucher Brothers on a new agreement and, in the
interim, also extended the existing Concession Agreement on a month to month basis, and
WHEREAS, in reviewing the current public beachfront concession program, the
Administration considered potential changes to the existing agreement with Boucher Brothers that
would address other issues, opportunities and concerns that have been identified and for which the
public beachfront concession program can provide assistance including beach cleanliness, the
extension of public beachfront concession areas, and the addition of non-motorized watersports,
and
WHEREAS, Boucher Brothers has over 20 years experience in providing pool, beach,
watersports, large corporate group events, and food and beverage concessions, and currently
operates over 60 hotel and condominium properties throughout Florida's East Coast, as well as city-
contracted public beaches in Virginia Beach,VA, Lake Michigan, Chicago, IL,and hotel properties in
Naples and St. Pete's Beach, and
WHEREAS, Boucher Brothers has over 500 employees during peak season,well over 300
of which are employed in Miami Beach, and
WHEREAS, while several entities may be qualified and interested in undertaking a large-
scale beachfront concession operation, the organizational and financial capacity of the
concessionaire that will continue to service our highly visited public beachfronts is very important;
and
WHEREAS, Boucher Brothers made the capital investment necessary to service the
Lummus Park and Ocean Terrace concession areas, invested in new equipment during the renewal
term, provided value-added cash contributions, and made timely annual minimum guaranteed
concession fee payments, including the 2010 payment, in the amount of$686,562 73, and
WHEREAS, Boucher Brothers is interested in continuing to service our public beach areas,
and has agreed to additional terms that can generate potential new revenue for the City, including
the rental of new types of luxury beachfront equipment, servicing new areas, developing a non-
motorized water sports program in North Beach Open Space Park and a beach locker program, as
well as continuing to provide (and offer additional) "Value-Added Enhancements" (VAE), and
WHEREAS, on December 6, 2011, proposed terms for a new concession agreement with
Boucher Brothers were discussed and recommended by the Finance and Citywide Projects
Committee (FCWPC), and
WHEREAS, after incorporating the comments and recommendations of FCWPC, and
conducting further negotiations with Boucher Brothers, the Administration has successfully
negotiated the attached new Concession Agreement with Boucher, and would recommend that the
Mayor and City Commission waive, by 5/7ths vote,the competitive bidding requirement,finding such
waiver to be in the best interest of the City, and approve and authorize the Mayor and City Clerk to
execute the attached Agreement.
NOW,THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA,that the Mayor and City Commission hereby waive, by
5/7ths vote,the competitive bidding requirement,finding such waiver to be in the best interest of the
City, and approve and authorize the Mayor and City Clerk to execute a new Public Beachfront
Concession Agreement between the City and Boucher Brothers Miami Beach, LLC, for the
Exclusive Right to Operate Certain Concessions in Lummus Park, Ocean Terrace, North Shore
Open Space Park, and South Pointe Park Beach, in Miami Beach, Florida,for the Rental of Beach
Equipment, Food and Beverage Service, Sale of Beach-Related Sundries and Skin Care Products,
and Watersports Equipment Rentals;said Agreement having a five(5)year initial term,commencing
retroactively on November 5, 2011, and ending on November 4, 2016, and providing for a five (5)
year Renewal Term which is exercisable by the City; further retroactively approving the City
Manager's extension of the current Concession Agreement,from November 5, 2011,to December
14, 2011
PASSED and ADOPTED this MI day of 9euni her, 2011
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Waiving, By 5/7ths Vote, The Competitive Bidding Requirement, Finding Such Waiver To Be In The Best Interest
Of The City, And Approving A Public Beachfront Concession Agreement Between The City And Boucher Brothers Miami Beach,
LIc (Concessionaire), For The Exclusive Right To Operate Certain Concessions In Lummus Park, Ocean Terrace, North Shore
Open Space Park, And South Pointe Park Beach, In Miami Beach, Florida, For The Rental Of Beach Equipment, Food And
Beverage Service, Sale Of Beach-Related Sundries And Skin Care Products, And Watersports Equipment Rentals; Said
Agreement Having A Five (5) Year Initial Term Commencing Retroactively On November 5, 2011, And Ending On November 4,
2016, And Providing For A Five (5) Year Renewal Term Which Is Exercisable By The City; Further Retroactively Approving The
City Manager's Extension Of The Current Concession Agreement From November 5, 2011,To December 14, 2011
Key Intended Outcome Supported:
Increase resident satisfaction with the level of services and facilities.
Supporting Data(Surveys, Environmental Scan,etc.): The overall quality of the beaches (cleanliness,water quality,etc.)appeared
as an important area affecting residents' quality of life. 75% of residents and 77% of businesses rated the overall quality of the
beaches as excellent or good
Issue:
I Should the City approve the concession agreement?
Item Summary/Recommendation:
In accordance with Management Agreement No 750-0006 by and between the State of Florida and the City,the City is vested with
the management, jurisdiction, and control of all beaches in the City of Miami Beach. On February 21, 2001, the Mayor and City
Commission authorized the issuance of an RPP which resulted in the selection of Boucher Brothers Miami Beach, LLC (Boucher
Brothers)for the operation and management of beachfront concessions, including beach equipment rentals, food and beverage sales,
and watersport rentals,on the beaches seaward of Lummus Park, Ocean Terrace and North Shore Open Space Park.The agreement,
as amended, commenced on November 5, 2001, and, after the five (5) year option was exercised, was scheduled to expire on
November 4, 2011 During the City Commission retreat on May 20 and 21, 2011, a discussion was held regarding the Public
Beachfront Concession Agreement/Program and the expiration of the current agreement. In light of satisfaction with the performance of
the current concessionaire, and a desire to ensure that the concession agreement addressed desirable items, such as non-motorized
water sports in North Beach, additional cleaning services, and the installation of beach lockers, staff was directed to negotiate a new
concession agreement with Boucher Brothers. Consequently, last month, the Concession Agreement was extended on a month-to-
month basis pending the review and consideration by the City Commission of a new Concession Agreement; on November 4, 2011,
the City accepted payment of fifty percent(50%)of the Year 10 Minimum Guarantee under the Concession Agreement($367,257.56)
The current concessionaire is a known entity with organizational experience and capacity,with over 20 years providing pool, beach,
water sports, large corporate group events and food and beverage concessions. In addition to the Concession Agreement for Lummus
Park, Boucher Brothers serves over 60 hotel and condominium properties throughout Florida's East Coast, with close to 20 Miami
Beach condominium and hotel properties, as well as numerous other beach concessions on Florida's West Coast, Virginia and
Chicago, IL. Boucher Brothers has over 500 employees during peak season,well over 300 of which are employed in Miami Beach.
The current opportunities afforded under the existing Agreement, as well as other options that can generate potential new revenue
for the City, have been researched and negotiated. In addition to allowing the rental of new types of beachfront equipment, servicing
new areas, and allowing for"heating" of certain foods, they will develop a non-motorized water sports program in North Beach Open
Space Park, operate a beach locker program in Lummus Park, as well as continue to provide (and offer additional) "Value-Added
Enhancements." Boucher Brothers will pay the City a "Minimum Guarantee" (MG) concession payment at the beginning of each year
(first year value of$686,563; subject to an annual escalator), and any difference between the MG and the Percentage of Gross (sales)
for each service they provide.The proposed Agreement term is for five years,with an option (at the City's sole discretion) of a renewal
for an additional five years.
On December 14, 2011, the proposed terms for a new Concession Agreement were discussed by the Finance and Citywide
Projects Committee (FCWPC) The FCWPC members present recommended approval of the new Concession Agreement, but
instructed staff to conduct further negotiations with Boucher Brothers regarding the renewal language to address concerns raised by
Boucher Brothers about the new langage. The Committee recommended forwarding to the Commission, for the full Commission's
consideration, the proposed annual escalator on the Minimum Guaranteed Concession Payment to be made by Boucher Brothers. As
currently provided in the Agreement,the MG would increase by the greater of 3%or CPI
Advisory Board Recommendation:
Finance and Citywide Projects Committee. December 6,2011
Financial Information:
Source of Amount Account
Funds: n/a 1 N/A
Financial Impact Summary:
City Clerk's Office Legislative Tracking:
Anna Parekh, Ext 7260
Sign-Offs:
Department Director Assistant City Manager City Manager
AP HF JMG
T9AGENDA12011112-14-111Boucher Brothers Agreement Summary.doc /
elA MIA/\AI EACH AGENDA ITEM RI F
DATE 1170H)
MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive,Miami Beach, Florida 33139,www miamibeachil.gov
COMMISSION MEMORANDUM
TO• Mayor Matti H Bower and Members of the City Commission
FROM. Jorge M Gonzalez, City Manager
DATE. December 14, 2011 6 •
SUBJECT A RESOLUTION WAIVING, BY 5/7 'S VOTE, THE COMPETITIVE BIDDING
REQUIREMENT, FINDING SUCH WAIVER TO BE IN THE BEST INTEREST OF
THE CITY, AND APPROVING A PUBLIC BEACHFRONT CONCESSION
AGREEMENT BETWEEN THE CITY AND BOUCHER BROTHERS MIAMI BEACH,
LLC (CONCESSIONAIRE), FOR THE EXCLUSIVE RIGHT TO OPERATE CERTAIN
CONCESSIONS IN LUMMUS PARK, OCEAN TERRACE, NORTH SHORE OPEN
SPACE PARK, AND SOUTH POINTE PARK BEACH, IN MIAMI BEACH,
FLORIDA, FOR THE RENTAL OF BEACH EQUIPMENT, FOOD AND BEVERAGE
SERVICE, SALE OF BEACH-RELATED SUNDRIES AND SKIN CARE
PRODUCTS, AND WATERSPORTS EQUIPMENT RENTALS; SAID AGREEMENT
HAVING A FIVE (5) YEAR INITIAL TERM COMMENCING RETROACTIVELY ON
NOVEMBER 5, 2011, AND ENDING ON NOVEMBER 4, 2016, AND PROVIDING
FOR A FIVE (5)YEAR RENEWAL TERM WHICH IS EXERCISABLE BY THE CITY;
FURTHER RETROACTIVELY APPROVING THE CITY MANAGER'S EXTENSION
OF THE CURRENT CONCESSION AGREEMENT FROM NOVEMBER 5, 2011, TO
DECEMBER 14, 2011.
KEY INTENDED OUTCOMES SUPPORTED
To ensure well-maintained facilities.
BACKGROUND
In accordance with Management Agreement No 750-0006 by and between the State of Florida and
the City, the City is vested with the management, jurisdiction, and control of all beaches in the City of
Miami Beach On October 2, 1985, the Mayor and City Commission approved a Concession
Agreement, dated November 7, 1985, between the City and Penrod Brothers for rental of beach
equipment, water recreation equipment and food and beverage service at Pier Park, Oceanfront Park
and Lummus Park. The agreement expired in November, 2001. On February 21, 2001, the Mayor and
City Commission authorized the issuance of an RPP which resulted in the selection of Boucher
Brothers Miami Beach, LLC (Boucher Brothers) for the operation and management of beachfront
concessions, including beach equipment rentals, food and beverage sales, and watersport rentals, on
the beaches seaward of Lummus Park, Ocean Terrace and North Shore Open Space Park. The
agreement commenced on November 5, 2001, and expired on November 4, 2006, with an option to
renew for an additonal five (5) year term An Amended and Restated Concession Agreement was
entered into on May 18, 2005, which clarified and memorialized operational issues. An Amendment
to Amended and Restated Concession Agreement was entered into on January 11, 2006, which
granted a renewal term through November 5, 2011, and memorizalized value-added enhancements
from the Concessionaire to the City A Second Amendment to Amended and Restated Beachfront
Concession Agreement was executed on April 16, 2008, said amendment provided for the addition of
a concession area adjacent to Bandshell Park. A Third Amendment to Amended and Restated
Beachfront Concession Agreement was executed on July 15, 2009, which provided for the
reconfiguration of a fenced storage area for storage and for a dumpster facility The original
Boucher Brothers Public Beachfront Concession
December 14, 2011
Page 2 of 8
Concession Agreement and all subsequent amendments is referred to collectively as the "Concession
Agreement"throughout this Commission Memorandum
COMMISSION RETREAT
During the City Commission retreat on May 20 and 21, 2011, a discussion was held regarding the
Public Beachfront Concession Agreement/Program and the expiration of the current agreement. The
Commission discussed two options for the continued operation of the public beachfront concessions
currently managed by Boucher Brothers. 1) whether to issue a competiitve process to seek a
concessionaire, or, 2) to renegotiate and enter into a new agreement with the existing entity If the
City elects to waive competitive bidding, it may do so with a 5/7th vote of the City Commission
In light of satisfaction with the performance of the current concessionaire, and a desire to ensure that
the concession agreement addressed desirable items, such as non-motorized water sports in North
Beach, additional cleaning services, and the installation of beach lockers, staff was directed to
negotiate a new concession agreement with Boucher Brothers
Last month, the Concession Agreement was extended on a month-to-month basis pending the review
and consideration by the City Commission of a new concession agreement. In order to maintain
concession services, and in consideration of the parties' agreement to continue the terms of the
Concession Agreement in full force and effect, until such time as there was Commission consideration
of a proposed new agreement, on November 4, 2011, the City accepted the payment of fifty percent
(50%) of the Year 10 Minimum Guarantee amount under the Concession Agreement ($367,257 56).
BOUCHER BROTHERS, INC.
The current concessionaire is a known entity with organizational experience and capacity Boucher
Brothers Management has been in business for over 20 years providing pool, beach, water sports,
large corporate group events and food and beverage concessions. In addition to the Concession
Agreement for Lummus Park, Boucher Brothers concession operation serves over 60 hotel and
condominium properties throughout Florida's East Coast, with close to 20 Miami Beach Condominium
and hotel properties encompassing over 4,000 rooms and six water sports locations in Miami Beach,
15 blocks of city-contracted beach concessions in Ft. Lauderdale; Miami-Dade County contracted
Haulover Park, 50 blocks of city-contracted public beach in Virginia Beach, VA, and four beaches and
six blocks of city-contracted public beach on Lake Michigan, Chicago, IL. Boucher Brothers has over
500 employees during peak season, well over 300 of which are employed in Miami Beach Boucher
Brothers also serves five hotels in Sunny Isles and Hollywood, three hotels in Bal Harbour, and three
hotel properties on the West Coast of Florida, including Naples and St. Pete's Beach
The City of Ft. Lauderdale recently re-bid the beachfront concession area rights after contracting with
Boucher Brothers for three years and, although several prospective bidders requested applications,
the sole and successful bidder for the new Ft. Lauderdale contract was Boucher Brothers
ANALYSIS
While several entities may be interested in undertaking a large-scale beachfront concession
operation, the organizational and financial capacity of the concessionaire that will service our highly
visited public beachfronts are very important. There are a total of 12 other concessionaires providing
beachfront concession services on behalf of 27 private condos/hotels in Miami Beach, one of the
concessionaires services six concessions, one concessionaire services four concessions, and the
other ten concessionaires service between one and three properties each.
The existing Concession Agreement requires the Concessionaire to remit to the City a minimum
Boucher Brothers Public Beachfront Concession
December 14, 2011
Page 3 of 8
guaranteed concession payment, which was set at $412,500 the first year of the 2001 Concession
Agreement, and was adjusted annually by 5% per annum In addition, in the event that the percentage
of the Concessionaire's food and beverage gross receipts (ranging from 15% to 25% based on
volume) and its sundries and beach equipment gross receipts (20%), exceeded the minimum
guarantee, then the Concessionaire pays the City the difference between the two (Percentage of
Gross). A percentage of gross was also established for beach equipment and watersports equipment
rentals. Under the current Concession Agreement, the minimum guarantee is paid in full at the
beginning of each Concession Agreement year, with a "true-up" occurring at the end of the
Concession Agreement year, if needed The minimum guaranteed concession payment, which was
paid for 2010 (year ten of the current Agreement) was $686,562 73 The existing Concession
Agreement also required the Concessionaire to invest in new equipment during the renewal term, as
well as provide some value-added cash and other contributions
PROPOSED TERMS
The Administration discussed the status of the Concession Agreement with the Boucher Brothers and
their interest in continuing to service our public beach areas Consequently, the current opportunities
afforded under the existing contract, as well as other options that can generate potential new revenue
for the City, have been researched and negotiated In addition to allowing the rental of new types of
luxury beachfront equipment, servicing new areas, and allowing for "heating" of certain foods, they
have expressed a willingness to develop a non-motorized water sports program in North Beach Open
Space Park and a beach locker program, as well as continuing to provide (and offer additional)
"Value-Added Enhancements" (VAE) The VAE would continue to include annual donations to the City
for scholarships and in support of environmental organizations, and a "promotional towel program" in
the "Luxury" areas of the Concession Areas that would provide for the promotion of the City of Miami
Beach Additional Value-Added Enhancements are explained further in the memo
FINANCE AND CITYWIDE PROJECTS COMMITTEE MEETING — 12/6/11
On December 6, 2011, the proposed terms for a new agreement were discussed by the Finance and
Citywide Projects Committee (FCWPC) Two particular issues were discussed by the Committee, as
they remained areas where there had not been a conclusion on the negotiations One pertained to the
renewal provisions. The Boucher Brothers requested language similar to the language in the current
Agreement. The current renewal language provides that the Boucher Brothers must achieve certain
benchmarks, and that the renewal is subject to the City Commission's approval, at their sole
discretion It was the recommendation of the Committee members present that we discuss
benchmarks with Boucher Brothers and incorporate the original language into the Proposed
Agreement.
The other area that remained outstanding pertained to the annual escalator on the Minimum
Guarantee Customary with these types of Agreements, an escalator provision is included, providing
for an increase in the MG to reflect, among other things, inflationary costs. The current Agreement
included a flat five percent (5%) annual escalator Boucher Brothers argued that this escalator far
exceeded typical inflation indicators, and it was agreed to reduce the escalator, consistent with more
typical levels As such, commencing with the fourth Agreement year, and on the subsequent
anniversary of the Commencement Date, the Administration recommends that the MG be
automatically increased by the greater of the CPI or three percent (3%) The Committee could not
agree on this issue and recommended forwarding this component to the full Commission without a
recommendation
AGREEMENT TERMS:
The following provides a summary of the Agreement Terms, as fully reflected in the attached
Boucher Brothers Public Beach front Concession
December 14, 2011
Page 4 of 8
proposed Agreement.
Term:
This term of this Concession Agreement is proposed for five (5) years commencing on
November 5, 2011, and ending on November 4, 2016 (Initial Term) Provided that
Concessionaire is not in default under the Agreement, has met the benchmarks described
below, and commencing with timely written notice from Concessionaire, Concessionaire and
the City will negotiate exclusively with each other in good faith for a period of sixty (60) days to
extend the term of the Agreement for an additional five (5) year renewal term The renewal
term is subject to, and requires, the approval of the Mayor and City Commission Prior to
commencement of negotiations for a renewal term, any such renewal is conditioned on the
Concessionaire evidencing having purchased new equipment at a minimum investment of
$400,000 during the Initial Term Should the Agreement be renewed, the during the renewal
term Concessionaire must make an additional $200,000 minimum investment in new
equipment, by no later than the end of the third Agreement year of the Renewal Term
Concession area(s):
The Concessionaire will service the existing Concession Areas. An additional Concession
Area is approved, should the area become serviceable in the future The Boucher Brothers will
assess whether the area is serviceable and report to City staff
• Lummus Park—beach area bounded by 5th Street to 14th Lane,
• Ocean Terrace—beach area bounded by 73 Street to 75 Street;
• North Shore Open Space Park — This Concession Area, should it become serviceable
during the Term, is limited to the beach area bounded by 79 Street to 87 Street;
• South Pointe Park Beach (new) — This Concession Area, should it become serviceable
during the Term, is limited to the beach area bounded by South Pointe Park Pier to
lifeguard stand (above subject to restrictions on applicable buffer zones, handicap zones,
etc.)
Use(s):
The following uses are permitted pursuant to this Concession Agreement. Additional uses
were identified to address the City's interest for North Beach economic development, and in
response to issues regarding petty thefts on the beach
• Rental of Beach Equipment — generally includes beach chairs, pads, umbrellas, sun
canopies, and such other related equipment. The condition and quality of Beach
Equipment shall be maintained in a first-class manner which is equal to, or better than, the
condition and quality of beach equipment found in public beach concessions in other world
class beach resorts Beach Equipment must be replaced no later than the fifth year after
purchase, unless it is necessary, due to the condition of Beach Equipment, to replace such
Equipment prior to the fifth year after purchase,
• Beach Locker Program — To be implemented on a pilot program for one year If the City
and Concessionaire cannot mutually agree on whether to continue to operate the Program,
then the City Manager may assume and undertake — whether through the City or by
contracting with a third party vendor — operation of a beach locker program within the
Concession Areas without any liability to the City;
• Food and Beverage Service — Concessionaire can currently sell cooked, prepared, and/or
prepackaged foods and non-alcoholic beverages Actual cooking from the
Concessionaire's on-site facilities is not allowed. However, Boucher Brothers has
requested the ability to heat food by means of battery power, solar power, or propane gas.
In an effort to improve the quality of the food products provided on the public beachfront,
staff recommends that heating be permitted, subject to the City Manager or his/her
designee's approval, and following all required regulatory approvals Boucher Brothers can
Boucher Brothers Public Beachfront Concession
December 14, 2011
Page 5 of 8
continue to operate up to five (5) non-motorized, stationary carts in the Lummus Park
Concession Area are authorized to dispense ice cream and frozen lemonade (currently
permitted),
• Sale of Beach-Related Sundries and Skin Care Products
• Watersports Equipment Rentals — The Concessionaire will continue the operation of the
existing active watersports channel within the Lummus Park Concession Area, to include
the rental of eight (8) waverunners, one (1) parasail boat, one (1) banana boat, and six (6)
kayaks Any future requests for new and/or additional Watersports Equipment for this
concession must be approved As a new service, Concessionaire will establish and
operate a non-motorized Watersports Equipment concession in the Ocean Terrace
Concession Area, which shall be provided and implemented no later than ninety (90) days
following the City's final approval of a designated non-motorized watersports channel
within that Area. This new service, which the City plans to co-promote, is intended to
generate traffic to our North Beach area, especially as certain non-motorizes watersports
have become very popular
• Storage — The Concessionaire is entitled to storage facilities, which must be approved by
the City Any new storage facilities requested are to be approved by the City Manager,
paid solely and exclusively by Concessionaire, and are subject to all necessary regulatory
approvals It is anticipated that additional storage will be required for, in particular, the new
non-motorized watersports concession and the beach locker program
Value-Added Enhancements (VAE):
The Concessionaire currently provides certain Value-Added Enhancements as a component of
their Concession Agreement. In addition to continuing these benefits, following negotiations
with staff, they have also agreed to provide additional VAEs
Existing.
• Annual $5,000 donation to the City to be utilized for scholarships and contributions to
philanthropic organizations
• Annual $5,000 donation to the City to be utilized in support of environmental organizations
and programs
• Promotional towel program in the Luxury areas that provides for a minimum of 600
imprinted lounge chair towels, promoting the City of Miami Beach, and which shall be
replaced with 600 new imprinted towels at least once during the Initial Term, and twice
during the Renewal Term
Expansion of existing.
• Enhanced beach cleanliness. Concessionaire will provide assistance in the supervision
of cleanliness in Lummus Park, including the area outside of the concession Area(s)
beginning west of the sand dunes and extending westerly to the east sidewalk of Ocean
Drive, to include. coordination with the City's Sanitation Department for the collection of
any litter garbage or debris that is identified by the Concessionaire, including notification
of overflowing trash receptacles, notification to the Public Works Department of any
issues regarding the operation of any beach showers and the cleanliness of beach
restrooms, and coordination with the Code Compliance Division in identifying and
reporting littering, illegal vendors, graffiti on city property or any other city code violation
New VAEs:
• Public Beachfront Outdoor Ashtray Program requiring Concessionaire's purchase, daily
placement/removal, and maintenance of no fewer than twenty (20) outdoor ashtrays
(maximum cost of $100/ashtray) for the use of the general public. The outdoor ashtrays
(with appropriate signage) shall be placed daily along the existing public trash can line,
adjacent to areas outside of the Concession Areas, and adjacent to the following
additional areas (for as long as Boucher Brothers manages the adjacent private
beachfront concession the public beachfront area between the private concession areas
Boucher Brothers Public Beachfront Concession
December 14, 2011
Page 6 of 8
behind Penrod's and the Continuum, and the public beachfront area located east of
Marjory Stoneman Park. Additionally, the Concessionaire is required to provide ashtrays
to patrons using their concession areas.
Concession fees:
Concession fees are provided to the City, as follows
Minimum Guaranteed Annual Concession Fee(MG):
An MG shall be paid each Agreement each. The MG for the first year of the Initial Terms is
$686,563 apportioned as follows.
Food and Beverage Sales, Beach-related Sundries ,
/Skin Care Products sales $174,524 43
Beach Equipment Rentals $465,398 46
Watersports Equipment Rentals $ 46,639.84
Total $686,562.73
50% of the MG for each Agreement year is due and payable to the City on November 5th of
each year during the Term, and the remaining 50% is due on May 5th of each year during the
Term
Escalator:
Customary with these types of Agreements, an escalator provision is included, providing for an
increase in the MG to reflect, among other things, inflationary costs. The current Agreement
included a flat five percent (5%) annual escalator Boucher Brothers argued that this escalator
far exceeded typical inflation indicators, and it was agreed to reduce the escalator, consistent
with more typical levels As such, commencing with the fourth Agreement year, and on the
subsequent anniversary of the Commencement Date, the MG will be automatically increased
by the greater of the CPI or three percent (3%)
Percentage of Gross (PG) vs. MG:
For each contract year, Concessionaire shall pay the difference between the MG and the
percentage of the gross receipts that exceeds the MG for Food and Beverage sales/Beach-
Related Sundries/Skin Care Products, Beach Equipment rentals, and Watersports Equipment
rentals, as follows
Food and Beverage Sales 15%
Beach-related Sundries/Skin Care Products Sales 20%
Beach Equipment Rentals 20%
Watersports Equipment Rentals 20%
The payment of the PG shall be due and payable to the City no later than December 31st of
each contract year
The proposed terms reflect a flat minimum guarantee for Year One (same as year ten of
current Agreement) and a deferred escalator that is intended to offset the capital investment
necessary to implement the non-motorized sports concession in North Beach and the beach
locker program which will be implemented by Boucher Brothers, at their cost.
Security deposit:
A Security Deposit is required in the amount of $68,652 for the faithful performance of the
terms and conditions of this Agreement, and is to be provided to the City in the form of a cash
deposit, irrevocable letter of credit, or certificate of deposit. This is in lieu of a performance
bond Boucher Brothers has requested the change from the requirement of a performance
bond to an alternative form of security deposit in light of the established history of the
Boucher Brothers Public Beachfront Concession
December 14, 2011
Page 7 of 8
Concessionaire with the City The alternatives to a performance bond were provided in the
current agreement, subject to the City Manager's approval This Security Deposit is payable in
two installments by no later than May 5, 2012.
Insurance:
The Concessionaire meets all City requirements and, further, increased their Commercial
General Liability requirement to a minimum amount of$5 million (from current Agreement's $2
million coverage)
Special events:
The Special Events language has been modified to address occasions when the
Concessionaire may be displaced from a Concession Area due to a special event or film
production (except for events produced by the City) When that occurs, the Concessionaire is
entitled to a displacement fee based on the prior three-year average sales (per day) in the
displaced area.
Maintenance:
Concessionaire must continue to maintain their Concession Area free of litter, garbage and
debris In addition, as part of the negotiations of this Agreement, Boucher Brothers will also be
responsible for maintaining any "areas outside of the Concession Areas" identified in the
Agreement, including Buffer Zones, Lifeguard Zones, Handicap Zones, areas 50' from storage
facilities and concession facilities that heat food The Concessionaire is to develop and
present the City with a recycling plan
Vehicles:
There is no increase in the number of permitted vehicles is proposed Clarification on
language regarding what types of vehicles are permitted east of the trash can line has been
included, as well as processes for the driving of on-road vehicles on the beachfront.
Penalty in lieu of default:
Notwithstanding the city's right to declare the Concessionaire in Default, as an alternative
means of ensuring compliance with non-monetary terms of this Agreement for which a cure
period is not possible, this Agreement includes a new provision that provides for a penalty for
failure to meet certain terms. Minimum fines, per incident, are provided for these provisions,
included as Attachment 13 8 to the Agreement, and attached for your easy reference
CONCLUSION
The City's public beachfronts are used by both residents and millions of visitors to our beaches. The
provision of a quality beachfront concession program, to include food and average services,
equipment rental, motorized/non-motorized water sports, and the sale of sundries and lotions,
provides an important and valuable amenity, for our residents, as well as the millions of visitors to our
beaches These concession areas are regulated and monitored to ensure appropriate levels of
cleanliness, and the provision of safe and reliable services.
While providing a beneficial service to our residents and visitors, the current public beachfront
concession program provides the City with revenues through a minimum guaranteed annual payment,
and the opportunity for additional payments when revenues exceed a certain percentage of gross.
Value-Added Enhancements, provided at no cost to the City, are funding environmental and
educational programs, assisting the City in promoting the destination, providing support to our Public
Works and code Compliance staff in ensuring that the highly-visited Lummus Park is clean and free of
issues, and assisting in our beach cleanliness efforts through the implementation of an outdoor
Boucher Brothers Public Beachfront Concession
December 14, 2011
Page 8 of 8
beachfront ashtray program The new proposed terms also provide for the implementation of a non-
motorized water sports concession in Ocean Terrace that we will promote in conjunction with Boucher
Brothers, as a means of economic development for our North Beach Area, as well as a beach locker
program to address issues regarding petty thefts on our public beach areas (as reported to us by our
Police Department) The proposed terms take into consideration the costs associated with Boucher
Brothers' implementation of the new programs, in particular the investment of capital costs for those
programs, while ensuring that the City secures a financial commitment that recognizes the value of
this agreement.
The Finance and Citywide Projects Committee recommended in favor of the City entering into an
Agreement with Boucher Brothers for the services outlined herein They further recommended that the
renewal provisions be the same as the renewal provisions in the current Agreement, and instructed
staff to meet with the Boucher Brothers to identify the appropriate benchmark to incorporate into any
Renewal Provision The Committee could not agree on the matter of the annual escalator and referred
that issue to the full Commission The recommended escalator included in the attached, proposed
agreement is the greater of 3% or CPI
Attachments
JMG/HMF/AP
T•\AGENDA\2011\12-14-11\Boucher Brothers Agreement Memo.doc