LTC 34-2003To:
From:
Subject:
CITY OF MIAMI BEACH
Office of the City Ma__qag,er
Letter to Commission No.
Date: February 4, 2003
Mayor David Dermer and
Members of the City Commission
Jorge M. GonzaleZ'~/~/"~
City Manager f) (//
Boucher Brothers Miami Beach LLC Initial Contract Year Revenue Summary
On October 17, 2001, the Mayor and City Commission adopted Resolution 2001-24646,
approving a Concession Agreement between the City of Miami Beach and Boucher
Brothers Miami Beach, LLC (Boucher Brothers) for the operation and management of
beachfront concessions on the beaches seaward of Lummus Park, Ocean Terrace, and
North Shore Open Space Park. The Concession Agreement commenced on
November 5, 2001.
Concession operations permitted include sale of food (no cooking and/or heating) and
beverage, rental of lounge chairs and umbrellas and watersport rentals (e.g. wave
runners).
As requested by Commissioner Garcia, and the Mayor and City Commission, at the
December 11, 2002, City Commission meeting, attached is the preliminary first year
revenue summary based on amounts submitted by Boucher Brothers. Said revenue
summary includes a comparison with the previous concession operator, Penrod Brothers,
Inc., for the comparable prior year period.
The Boucher Brothers Concession Agreement provides that Boucher remit to the City the
greater of a yearly minimum guarantee of $442,500 ($412,500 for beach equipment and
food & beverage + $30,000 for watersports), or a percentage of gross sales and rentals as
follows:
15% of its gross food and beverage sales up to $750,000, and then on a sliding
scale in 1% increments (from 16% to 25%), as sales exceed $750,000 (in $250,000
increments (from $750,001 thru $3,250,000), respectively
20% of its gross beach equipment rentals
· 20% of its gross watersport rentals
Below please find a comparison of the year end sales totals based on amounts submitted
by Boucher Brothers for the months of November 2001 through October 2002, and those
submitted by Penrod Brothers for the comparable prior year period (November 2000
through October 2001), net of sales and resort taxes.
Boucher Brothers Penrod Brothers Difference
11/01-10102 11/00-10101
Sales Net of Sales $2,539,093 $1,728,360 $810,733
and Resort Taxes
Revenue to City $ 471,755 $ 259,254 $212,501
Please note that the Penrod Brothers Concession Agreement, as amended and extended,
provided that during their last year of operation, Penrod would remit to the City the greater
of a minimum yearly guarantee of $9,600 ($800 per month), or fifteen pement (15%) of
their gross sales for beach equipment rentals, food and beverage sales, and watersport
rentals.
In reviewing these numbers with Boucher Brothers, they stated that revenues could have
been greater, had they not been operating under what they considered to be unfavorable
circumstances, such as the post-September 11, 2001, environment and slow economic
conditions (see attached letter from James Boucher).
Nonetheless, Boucher Brothers reports that the gross revenues generated by them for the
first contract year exceed those of the prior concessionaire by $810,733, respectively a
47% increase over prior year's revenues as reported by Penrod Brothers.
Generally, the Boucher Brothers have provided good levels of service and customer
satisfaction. They have been responsive to our requests and inquiries and have developed
a good working relationship with the City and businesses on Ocean Drive. Overall, their
performance has exceeded my expectations and they continue to demonstrate a
willingness to partner with the City. Attached is a letter I received from the Boucher
Brothers summarizing their observations over the past year.
Should you have any questions or need any additional information, please feel free to
contact me.
JMG:CMC:JD:rlr
Attachment
C'
Christina M. Cuervo, Assistant City Manager
Jose Damien, Asset Manager
F:\DDHP~$ALL~ASSET~BEACHFRN~PUBLIC\RFP_2001~BOUCHER\BoucherRevenueLTC3-doc
Beachfront Concession Revenue Comparison
Operator>>>>>>> BOUCHER (11/01 thru 10/02) PENROD 11/00 thru 10/01)
MONTH Net Sales Total to CMB Net Sales Total to CMB
November $115,717 $21,708 $127,702 $19,155
December $104,174 $19,629 $60,603 $9,090
January $162,033 $30,446 $122,146 $18,322
February $152,656 $28,644 $189,105 $28,366
Mamh $461,199 $85,133 $259,148 $38,872
April $315,874 $58,875 $201,402 $30,210
May $248,652 $46,208 $151,998 $22,800
June $133,212 $24,896 $144,983 $21,748
July $263,206 $48,728 $185,802 $27,870
August $264,166 $48,565 $165,033 $24,755
September $161,294 $29,696 $79,918 $11,988
October $156,910 $29,228 $40,520 $6,078
TOTALS $2,539,093 $471,755 $1,728,360 $259,254
Sales reflected in reports submitted by respective concessionaire, not inclusive of
State sales tax, or resort tax.
February 3, 2003
Jorge Gonzalez .
City Manager
City of Miami Beach
1700 Convention Center Drive
Miami Beach, FL 33139
RE: Quality & Performance Observations Regarding Beach Concession
BOUCHER
BROTHERS
20971
northeast
thirtieth court
aventura florida
33180
office
305 535-8177
fax
305 538-3288
sales department
305 218-6610
www.boucher brot hers.com
Dear Hr. City Manage~.
As you requested as part,of the annual review process, the following is a synopsis ofth~ past
year's accomplishments as to quality and performance. First and foremost, we are
appreciative for the privilege to serve the City of Miami Beach as their Beachfront
Concessionaire. The first year enabled both of us to gain knowledge and experience of the
concession area. As a result we have submitted to the Administration a number of issues to
make the concession area better..We wB~l continue to strive to make the beach a more
enjoyable experience for all.
I) We believe the public (resident and tourist) has best been served by the
deployment of new equipment, trained personnel and full time supervision by the Boucher
brothers.
2) The new and innovative luxury oasis areas are always in demand and have created
another level of service on the beach.
3) Hotel ownership and management recognize guest satisfaction delivered to Ocean Drive
& Collins Avenue hotel guests is excellent~
Perfor~ce:
Miti_L, ation af Performance:
I ) Here are some reasons for not achieving better revenue perfo~nance:
2) Despite a post September I I economy as demonstrated by the statistical recording of the
downturn of resort tax collection and occupancy percentage on Ocean Drive and Collins
Avenue hotels, gross revenue increased compared to the prior concessionaire.
3) Less beachfront (length) compared to the prior concessionaire.
4) No cooking on the beach compared to the prior concessionaire, resuking in less revenue
from food sales.
5) No cooking and serving of food and beverage compared to the prior concessionaire at
10~/and L4~ Street.
6) Diminished beach (depth), as a resuk of the Lummus Park excavation and relocation
project removed revenue-producing area from the Concession Area.
The combined efforts of the City and concessionaire have delivered greater generation of
revenue and payment of rent to the City, new and improved equipment and delivery of quality
service in comparison to previous years. This is a win for the City, residents and tourists.
Ploreover, all of the above was accomplished while respecting beach preservation and not
exasperating the commercialization of the beach, proving the coexistence of beach
preservation ~and the tourism industry can coexist.
On behalf of my bothers, the past year has been a privilege and pleasure working With you and
your administration. We look forward to a great future together.
BOUCHER
BROTHERS