Form revised March 16, 2004

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Parks and Recreation	John Braden 386-4350	Marilynne Gardner 233-5109

Legislation Title:

AN ORDINANCE relating to the Department of Parks and Recreation; authorizing the execution of a concession agreement with Consolidated Restaurants, Inc. to operate a restaurant at the Seattle Aquarium on Pier 59.

· Summary of the Legislation:

The proposed Council Bill authorizes the Superintendent of Parks and Recreation to enter into a short-term Concession Agreement with Consolidated Restaurants to continue to operate Steamers Restaurant at the Seattle Aquarium on Pier 59.

· Background:

The concession agreements to operate a restaurant, theater, and gift shop on Pier 59 expired at the end of 2003. Because a major renovation of Pier 59 is anticipated to begin in late 2005, the Department of Parks and Recreation has elected to enter into short-term leases to operate these facilities until construction begins.

Previously, Consolidated Restaurants operated both the restaurant and a gift shop. As a result of an analysis of the standard financial return in the aquarium industry from these activities, it was decided to issue a separate RFP for the gift shop portion of the prior agreement. As the financial return for the restaurant met industry standards and the term of the agreement is limited by the proposed construction, a new Concession Agreement was negotiated with the current operator incorporating operational changes to the existing agreement, but with financial terms essentially unchanged. The agreement provides for payment to the City of 5.36% of gross sales, with a minimum payment of $40,000. Based on previous year’s sales, the anticipated revenue for 2004 will be $90,000. The area of the pier shed in which the restaurant is located would be demolished in late 2005 as part of the Pier 59 renovation, and rebuilt over a nine-month period. The pier shed will be rebuilt as part of the City’s structural repairs. Tenant improvements will be paid for by the Seattle Aquarium Society and the selected operator of the restaurant. The Aquarium would then seek an operator for the new food service space through a competitive RFP process.

· Please check one of the following:

____ This legislation does not have any financial implications.

__X__ This legislation has financial implications.

Appropriations: No appropriation is requested as a result of the proposed legislation.

Fund Name and Number	Department	Budget Control Level*	2004 Appropriation	2005 Anticipated Appropriation
TOTAL

*See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

Anticipated Revenue/Reimbursement: Resulting From This Legislation:

Fund Name and Number	Department	Revenue Source	2004 Revenue	2005 Revenue
Park and Recreation Fund (10200)	Parks and Recreation	Annual Concession Payments from Consolidated Restaurants, Inc.	$90,000	$70,000
TOTAL			$90,000	$70,000

Anticipated revenues are based upon revenues generated from 1999-2003. Estimated revenue for 2005 assumes that construction on Pier 59 will be underway in the 4^th quarter. The annual Consolidated Restaurants Revenue since 1999 is as follows:

1999 $ 72,731

2000 $ 71,705

2001 $ 78,982

2002 $ 86,339

2003 $ 86,952

Notes: The structural repairs will disrupt Aquarium operations. It is anticipated that funding to cover lost revenues will be included in the financing plan for the Pier 59 construction which will be included in the Mayor’s Proposed 2005-2006 Budget.

It is anticipated that the new contract will include catering activities not included in the present agreement. The revenue from the restaurant itself is not expected to increase. The operation is being changed to emphasize service to Aquarium visitors and the increased revenues will be realized from increased catering/rentals and increased gate receipts.

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact: Not applicable.

Position Title and Department*		Fund Name	Fund Number	Part-Time/ Full Time	2004 Positions	2004 FTE	2005 Positions**	2005 FTE**
	TOTAL

* List each position separately

** 2005 positions and FTE are total 2005 position changes resulting from this legislation, not incremental changes. Therefore, under 2005, please be sure to include any continuing positions from 2004

Notes:

· Do positions sunset in the future? No

Spending/Cash Flow: Not Applicable.

Fund Name and Number	Department	Budget Control Level*	2004 Expenditures	2005 Anticipated Expenditures
TOTAL

* See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

· What is the financial cost of not implementing the legislation?

The City would lose at least $46,000 per year in revenue from the restaurant concession which is used to offset the cost of operating the Aquarium.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives?

The restaurant is located directly on Alaskan Way and it is necessary to have an active use in that area. Another operator could have been sought, but the two-year limitation due to the anticipated renovations makes the necessary investment not financially feasible.

· Is the legislation subject to public hearing requirements? No.

Other Issues: None.

Please list attachments to the fiscal note below: