Colony Theatre RFP ReviewMIAMI BEACH
BUDGET AND PERFORMAI'-lCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
Jorge M. Gonzalez, City Manager el¢'/~1
Kathie G. Brooks, Budget and Perfo. mance Improvement Dire ·· _..,
James J. Sutter, Internal Audito.s.,J~-·
DATE:
AUDIT:
PERIOD:
February 14, 2008
Review of RFP for Colony Theatre Cafe
October 1, 2004 through January 31, 2008
This report is a review of the planned Request for Proposal (RFP) submitted for the operation of the
Colony Theatre Cafe.
INTRODUCTION
On January 10, 2008, the Finance and Citywide Projects Committee recommended that an RFP for
the Cafe at the Colony Theatre be moved to the City Commission for consideration.
The Cafe has been operating since June 2000 and remained open while the Theatre was closed for
renovations between July 2002 and January 2006. At that time, the City assumed management
responsibility for the Colony Theatre in conjunction with SMG. The Cafe is now operating under a
lease renewal (as outlined in the Commission Memo dated February 13, 2008) expiring October 19,
2008.
The current lease extension provides for lease payments based on a sliding scale according to the
number of monthly performances. We reviewed the billings prepared by SMG for the Cafe and
found the amounts invoiced agreed with the lease terms. Since January 2007, there was a
minimum of 8 scheduled performances at the Colony Theatre per month (with the exceptions of July
and August) with the City consistently receiving the highest rent ($4,848.71 per month).
The City conducted a survey to confirm that 1 ,534 square feet is available for lease within the Cafe.
In addition, the Cafe holds an active sidewalk cafe permit for 48 tables and 183 seats. The City is in
the process of conducting an analysis of nearby rental market values to be used for the new lease.
A review of the resort tax returns filed by the current tenant supports that a new lease fee structure
consisting of rent on fair market values can be supported by a new operator. It is fully expected that
the rental terms for the RFP will not be tied to the number of performances, but instead make
remuneration more consistent with the rental value of the property.
OVERALL OPINION
Our review of the RFP and subsequent comparison to the current lease's performance confirms that
the RFP covers the essential components needed to solicit a reasonable proposal. The number of
performances at the Theatre does not have an impact on revenues earned by the Cafe operator,
therefore the RFP's conditions of rental payments based upon current market values and a
percentage of gross receipts is well supported. The minimum requirements for proposers specified
in the RFP are sufficient to allow for qualified proposers to respond. Finally, the RFP's evaluation
criteria are satisfactory to ensure that a successful qualified proposer is selected.
JJS:jjs
cc: Hilda Fernandez, Assistance City Manager
Max Sklar, Director of Cultural Arts & Tourism
F:\obpi\$AUD\DOC07-08\REPORTS\Colony Cafe RFP.doc
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