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Agenda – Standing Policy Committee on Downtown Development, Heritage and Riverbank Management – March 4, 2013

REPORTS Item No. 3 Lease of Esplanade Riel Restaurant – 50 Provencher Boulevard –

Chez Sophie Bistro (Fort Rouge – East Fort Garry Ward) WINNIPEG PUBLIC SERVICE RECOMMENDATION: 1. That the proposed lease of 50 Provencher Blvd. to Chez Sophie Bistro, to be located in

the restaurant located on the Explanade Riel Pedestrian Bridge be approved in accordance with the proposed Terms and Conditions as outlined in Schedule “B”, and any other conditions deemed necessary by the Director of Legal Services/City Solicitor, to protect the interests of the City.

2. That the proper officers of the City be authorized to do all things necessary to implement

the intent of the foregoing.

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ADMINISTRATIVE REPORT

Title: Lease of Esplanade Riel Restaurant–50 Provencher Blvd.–Chez Sophie Bistro Critical Path: Standing Policy Committee on Downtown Development, Heritage and

Riverbank Management

AUTHORIZATION

RECOMMENDATIONS

1. That the proposed lease of 50 Provencher Blvd. to Chez Sophie Bistro, to be located in the

restaurant located on the Explanade Riel Pedestrian Bridge be approved in accordance with the proposed Terms and Conditions as outlined in Schedule “B”, and any other conditions deemed necessary by the Director of Legal Services/City Solicitor, to protect the interests of the City.

2. That the proper officers of the City be authorized to do all things necessary to implement the

intent of the foregoing.

REASON FOR THE REPORT

In accordance with the Council Order of July 18, 1979, the Standing Policy Committee on Property and Development shall authorize the leasing or rental of City properties for which the Director of Planning, Property and Development Department has no authority. On March 24, 2004, Council established the Standing Policy Committee on Downtown Development. The new Standing Policy Committee had jurisdiction over matters related to asset management, development control, land acquisition, land development and planning and land use in the area defined as Downtown. On May 25, 2011, Council renamed the Standing Policy Committee on Downtown Development the Standing Policy Committee on Downtown Development, Heritage and Riverbank Management. The newly named Standing Policy Committee had jurisdiction over matters related to historical buildings and river-related issues in additional to those of its predecessor in the area defined as Downtown.

IMPLICATIONS OF THE RECOMMENDATIONS

• The Department has determined that there is no policy, regulatory, environmental or human resource implications to the lease. • Acceptance of the proposal and subsequent signing of the lease agreement commits the City to a five-year lease for a French Bistro to operate in a facility that has been dark since December 31, 2012.

Author Department Head CFO CAO I. Day

B. Thorgrimson

M. Ruta, CFO

D. Joshi, COO

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HISTORY

In 2005, Salisbury House of Canada Ltd. was the successful proponent under RFP NO. 507-2004 for the Development and Operation of the Plaza space, located on the Esplanade Riel Pedestrian Bridge, for Specialty Retail, Food Services, Tourism or other Innovative Purposes. The initial term of the contract was five years, with an option to renew for two 5-year terms, as outlined in Schedule ‘A’. The first term expired on June 30, 2010 since which time Salisbury House of Canada has been in over holding. Salisbury House Canada Ltd. did not exercise its option to renew, and further negotiations were unsuccessful. Salisbury House Canada Ltd. Vacated the 50 Provencher Blvd. location on December 31, 2012. The Public Service issued an Expression of Interest (EOI) which ran in the Saturday, January 12th edition of the Winnipeg Free Press and was posted on the Materials Management web-site. The deadline for submissions was January 31, 2013. Several interested parties toured the facility, resulting in the receipt of three proposals, one of which was received after the deadline and deemed non-responsive.

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FINANCIAL IMPACT

Financial Impact Statement Date:

Project Name: First Year of Program 2013

2013 2014 2015 2016 2017 & 2018

CapitalCapital Expenditures Required -$ -$ -$ -$ -$ Less: Existing Budgeted Costs - - - - - Additional Capital Budget Required -$ -$ -$ -$ -$

Funding Sources:Debt - Internal -$ -$ -$ -$ -$ Debt - External - - - - - Grants (Enter Description Here) - - - - - Reserves, Equity, Surplus - - - - - Other - Enter Description Here - - - - - Total Funding -$ -$ -$ -$ -$

Total Additional Capital BudgetRequired -$

Total Additional Debt Required -$

Current Expenditures/RevenuesDirect Costs -$ -$ -$ -$ -$ Less: Incremental Revenue/Recovery - 18,000 24,000 24,000 30,000 Net Cost/(Benefit) -$ (18,000)$ (24,000)$ (24,000)$ (30,000)$ Less: Existing Budget Amounts - (18,000) (24,000) (24,000) (30,000) Net Budget Adjustment Required -$ -$ -$ -$ -$

"Original signed by"Mike McGinn, CAManager of Finance

Lease of Esplanade Riel Restaurant – 50 Provencher Blvd. – Chez Sophie Bistro

Additional Comments: The lease commences April 1, 2013 and expires March 31, 2018. In the first year of the lease, the City will provide a rent free period in lieu of tenant improvement contribution. Lease payments of $2,000/month would begin on April 1, 2014 and continue up to and including March 2018. All operating costs will be the responsibility of the tenant.

February 20, 2013

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CONSULTATION

In preparing this report there was consultation with:

SUBMITTED BY

Department: Planning, Property and Development Division Real Estate Prepared by: Sandi Caputo Date: February 20, 2013 File No. o:\reports directive\real estate\leasing\(sc)50 provencher blvd - chez sophie_feb

20.doc

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SCHEDULE ‘B’ – Proposed Terms and Conditions Lessee: Chez Sophie Bistro Location: Plaza Space, Esplanade Riel Bridge - 50 Provencher Blvd. Purpose: Operation of a restaurant facility which includes the option to operate a

forty-four seat outdoor café component situated along the north face of the Plaza Space.

Term: 5 Years, commencing April 1, 2013 or upon approval of the lease Expiry: March 31, 2018 Leased Space: Approximately 4,000 rentable square feet in the Plaza Space of the

Esplanade Riel Pedestrian Bridge Utilities: To be paid by the Lessee, to include but not limited to: hydro, water,

telephone Operating Costs: To be paid by the Lessee, to include but not limited to: window cleaning

(interior and exterior) refuse removal, janitorial services and supplies, HVAC, plumbing, electrical, general maintenance, ballast replacement and all other such costs associated with maintenance and repair of the building and building systems.

Insurance: To provide and maintain insurance coverage as required by the City of

Winnipeg at all times during the duration of the lease. Net Rent: Year 1: City to provide rent free period in lieu of tenant improvement

contribution Year 2-5: $6.00 per square foot, $2,000 per month, $24,000 per annum Property Taxes: To be paid directly by Lessee.

Cancellation: Cancellation by City on Lessee default of covenants.

Renewal Options: Lessee will have 2 options to renew for an additional 5-year term, each.

Lease rates will be negotiated at the time of the renewal and will be not less than the existing rates.

Bilingual Menu: Lessee to have bilingual menus and signage and bilingual staff during summer months

Hours of Operation: The premises will be open to the public from 11:00 AM to 10:00 PM

Restaurant will be closed on some Statutory Holidays, to be determined. Tenant Improvements: The Lessee to invest approximately $150,000 - $200,000 to renovate,

furnish and equip the restaurant. Renovations will also include an area for a Boutique/Souvenir Shop showcasing local artisans. (subject to financing)