TIMES UNION g@ GENER ee ALBANY, NEW York 51 South Pearl Street Albany, New York 12207 (518) 487-2000 FAX (18) 487-2020 MEMORANDUM To: Honorable Sean 6. Ward, Chairman Honorable Majority Leader — Frank Commisso Honorable Minority Leader - Frank Mauriello Patrick Jeffers, Majority Counsel Amis Zilgme, Minority Counsel From: Bob Belber SMG Regional General Manager Date: March 16, 2016 Re: Request For Legislative Action — Johnny Rockets & Handcrafted Brews Attached is a RLA form and backup information related to a proposal received from Louis W. Chicatelli, Jt who currently owns and operates the Johnny Rockets in Crossgates Mall and he would like to open a second Johnny Rockets with the Handcrafted Brews “new concept” being rolled out in limited locations in the US. Louis has agreed to personally guarantee the rent/lease for a period of three years and his company will guarantee the rent/lease for the duration of the term. He is asking for a ten year lease with four (4) additional five (5) year options that will require a mutual approval by Albany County and the Tenant, Sales in the space are projected to be approximately $1 million to $1.5 million annually. Rent will be based on 6% of sales with a minimum of $4,000 monthly for Years # | ~ 5 within the 10-year term and the minimum will increase to $4,350 monthly from Years # 6 thru # 10. The former tenant in the space wes paying $4,900 per month ($59K annually) however the County had no upside. In this deal, ifthe sales reach $1,5 million the rent would be $90,000 and there is no eap on the rent so anything above would still generate high rent for the arena/County. Plus, the current vacant space would open up with a popular national chain restaurant that will help draw more people to the arena and likely will help lure other national chains to the South Pear! Street block.| FOR COUNSEL USE Coorlert Mai REQUEST FOR LEGISLATIVE ACTION LA 1791: Lease Agreement with Johnny Rockets & Handcrafted Brews DATE: Friday, April 0%, 2016 ae DEPARTMENT: Management & Budget i Contact Person: avid Rellly, Acting Commissioner ‘Telephone: 518-447-7034 Dept, Representative Attending ‘Committee Meeting: David Reilly Acting Commissioner i PURPOSE OF REQUEST: ‘Adopting of Local Law ‘Amendient of Prior Legislation Approval/Adoption of Plan/Procedure Bond Approval Budget Amendment (see below) Contract Authorization (see below) Environmental Impact Home Rule Request Property Conveyance Other: (State briefly if not listed above) CONCERNING BUDGET AMENDMENTS STATE THE FOLLOWING; Increase Account/Line No. Source of Funds: ~~ Title Change: NI T RIZA "THE FOLLOWING. ‘TYPE OF CONTRACT: Change Order/Contract Amendment Purchase (Equipment/Supplies) Lease (Equipment/Supplies) Requirements Professional Services Education/Training Grant: New Renewal Submission Deadline Date Settlement of a Claim Release of Liability Other: (State briefly)RNING CONTRACT. TION STATE THE FOLLOWING: tact Terms dons: Party (Name/Address) Louis W. Chicatell, rand additional entity to be formed 2215 Nott Street, #116 Niskayuna, NY 12309) Amount Raise Schedule/Fee $90,000.00 ee Scope of Services Johnny Rockets & Handcrafted 8rews ~ restaurant and bar. Will bbe open daily from approximately 11:00 am to 8:00 pm on none event nights and longer in the evening when events occur, Contract Funding: Bond Res. No.: eeee eee aie Date of Adoption: Seas 7 ERNING ALI ESTS: Mandated Program/Service: No IfMandated Cite: Authority eee area Anticipated in Current Adopted Budget Yes cH County Budget Accounts: Revenue eit Appropriation a i Impact - Funding: 3c Percentag Federal ee teers State I EEE REE County Local 2 _ a ‘Term/Length of Funding: 120 Months (7/15/2016 - 7/14/2026) ding Litigati No eee ee reece eee Ifyes, please expla Pr est ical or Similar Action Resolution Law Number Date of Adoption Strange CEE TECIEES Justification: (State briefly why legislative action is requested) Current space is vacant following the departure of Wolf 111, Previous rent was roughly $19 per square foot with annual rent reaching approximately $59K, The proposed lease terms will produce rent @ 6% of ross sales, Based on $1.5 milion expected in gross sales, the rent would be roughly $50,000 annually (almost 50% higher than the previous desl structure). The space should be filled with a viable tenant and this national brand is excellent.‘Back-up Material Submitted: (i.e, applicatiowapproval notices from funding source, bid tabulation sheet, «ivil service approval notice, program announcement, contracts and/or any materials which explain or suppor the request for legislative action.) httpi//acvsp2020/sites/CALM/Lists/RLA/Attachments/1791/RLA COVER LETTER - JOHNNY ROCKETS - FINAL doe hnttpi//acvsp2020/sites/CALM/Lists/RLA/Attachments/1791/RLA COVER LETTER - JOHNNY ROCKETS - FINAL doc http://acvsp2010/sites/CALM/Lists/RLA/Attachments/1791/TU LO} 032216.pdf - FINAL PROPOSAL 3-23- 16.pdf Submitted by: David Reilly Title ‘Acting CommissionerLOUIS W. CHICATELLI, JR. 2215 Nott Street, #116 Niskayuna, New York 12309 518-348-4045 LouChicatelli@ChicatelliLa com 22, March 36,2016 Mr. Bob Belber SMG Regional General Manager 51 South Pearl Seat Albany, New York 12207 Re: Old Wolfs 1-11 TU Center, Albany NY Dear Bob: | am prepared to negotiate a written tease agracment (the “Leaso") with Lancilord on the following business terms and conditions: intity TBD, Tenant: Premises: hat certain location at $1 South Peal Street. Albany. New (the “Premises”), as more particularly described in the attached Exhibit A. Along with a small “patio” dining area in the concourse, two (2) parking spots in “box olfice lot” along with discounted parking at the County lot. Initial Lease Term: — Ten (10) years. al Base Rent: [ease Yeats Annual Rent Per Square Foot af Gross Leasable Arca 1-3 The higher of 6 % of monthly gross sales or $4,000/month 6-10 The higher of 6 % of monthly gross sales or $4.350/month Renewal Options: Four (4) renewal options of Five Years (5) years cach at the same rent structure and terms, Landlord Landlord shall provide tenant an allowance of $175,000-$200,000. Improvements: Please see attached sheet and “Equipment” section, NNN Charges Included in Rent, [tis understood that Tenant will maintain it’s own (CAM, Taxes, liability and risk insurance. However, any insurance carried by Landlord as customary shall be included in the rent charge Iasur:Rent Commencement: Permitted Use: Signage: Maintenance: ‘Ongoing ‘Termination: Guarantee: Lease payments: Rent Commencement shall occur (a) ninety (90) days from the date on which Tenant receives all permits and approvals (including Landlord's approval of Tenant's plans) necessary to commence construction of its improversents; or (b) upon Tenant's opening for business at the Premises, whichever oceurs first. The Premises shall be used as a Restaurant with bar. Tenant shall be permitted to install the maximum number of signs of the maximum size permitted by applicable governmental regulations including on the front, rear and “patio” of the Premises and at the ‘convention center and walkway, if permitted by applicable governmental regulations. Tenant shall maintain ina first class manner in good operating mn the interior of the Premises. Tenant shall have the right to terminate this lease at any time if the Previous Twelve (12) months gross sales do not exceed $1,100,000.00, upon Sixty (60) days written notice. Said option shall not be exercised in the firs thirty-six (36) months of the lease, ‘The lease shall be personally guaranteed by Louis W. Chicatelli, J. for the first three (3) years, said liability not to exceed the initial three (3) year term, This guarantee does not release the to be formed entity tenant from any liability first. Rent payments shall be paid monthly on the first (Ist) of each month, ‘Monthly rent shall include the $4,000.00 for the month (years 1-5, $4,330 for years 6-10) going forward and the overage of rent (6% of sales minus $4,000.00 or $4,350 in years 6-10) in arrears. For ‘example, the first month rent is due will be payment of $4,000.00. Every month following will be $4,000.00 plus any amount over $4,000.00 that was owed by sales of the previous month, times 6%, if any.Equipment: Kindly see attached sheet. As part of Landlord improvements, Landlord agrees to fit up the kitchen and bar areas with a list of equipment provided by Tenant. It is expected that the fit up will be between $175,000-$200,000. Tenant will use all discounts available to it as a licensed franchisee. ‘These furnishings, not to include small wares, will remain the property of Albany County and Tenant agrees to use best efforts to keep such Property in good working order. Any of these items that are broken or need replacement within the first three years will be repaired ot replaced at Albany County's cost. Any repairs of replacements of such equipment will be tenants responsibility thereafter, during the first term ofthe lease. At any renewal time, Landlord and Tenant agree to discuss the condition of the items and the ongoing responsibility to maintain the same, Reporting and Tenant shall provide to Landlord sales figures atleast monthly, weekly Audit rights: by Tenant's choice, Tenant's corporate franchisor “polls” Tenant's sales computer on a nightly basis. Then, on a weekly basis, via email, franchisor reports such figures to Tenant, along with a notice of franchise fees required to be paid under Tenant's agreement with Franchisor, Landlord, shall have the right to audit such figures, no less than two (2) times a year, or less if desired. Audit methods can be determined in the lease. This is not meant to create additional expense upon the Tenant but figures shall be available from the Tenant's accountant or directly from the Franchisor, At the end of each year, a financial report and income tax filings for the business will be provided to SMG and Albany County. Tax filings shall be provided within 30 days after they are due to the taxing authorities, Financial reports (P&L and Balance Sheet) shall be : provided within 60 days of fiscal year end, The above general terms and conditions are not complete and are for negotiations purposes only and neither party shall be legally bound to the other as a result of the signing of this letter, unless end until the above terms are incorporated into a Lease executed by both partes Thank you, Lou Chieatette Lou ChicateltiAGREED AND ACCEPTED: LANDLORD: By: Its: Date: TENANT: Is Date: Ya ig