HomeMy WebLinkAboutM-82-0500T. Howard V. Gary
City Manager
_• Carlos Garcia, Directo
Finance Department
BACKGROUND
= June 9, 1982
;fL_
Recommended Modifications of Bette
& Bert Bayfront 66 Marina, Inc.
Concession Agreement
The City of Miami entered into a concession agreement with Phillips Petroleum
Company on October 15, 1968, and after expiration the concession was transferred
to Bert Tumpson, d/b/a Bette & Bert 66 Marina, Inc. by Resolution No. 76-921.
Pursuant to that Resolution, the City Manager was authorized to permit Bert
Tumpson, d/b/a Bette & Bert Bayfront 66 Marina, Inc. to operate the marine re-
fueling facility concession at Watson Island on a monthly basis, with a 60 day
mutual termination notice provision, subject to the same terms and conditions
which prevailed between the former concessionaire, Phillips Petroleum Company,
and the City. Mr. Martin Tritt purchased the outstanding shares of stock in
Bette & Bert Bayfront 66 Marina, Inc. pursuant to an agreement between Bert and
Bette Tumpson dated October 15, 1978.
On May 11, 1982, Mr. Barry Kutun, attorney for Martin Tritt, appeared before the
City Commission to request modifications to the concesssion agreement as to the
percentage of gross receipt rent charged on gross sales of gasoline, diesel fuel,
and related petroleum products. Mr. Kutun pointed out that 10 of gross sales
on petroleum products was an unreasonable percentage to pay since his clients had
to purchase their petroleum products from a wholesaler. When Phillips Petroleum
Company had the agreement, they were supplied directly by the Company, so they
could afford to pay the 10; of gross sales on petroleum products. Further,
Mr. Kutun pointed out that percentages paid to the City at other locations
where the City charges a percentage of gross on fuel sales has been determined
to be a current market rate of 3.55' of gross sales of said petroleum products
and a fair rate of return for the City.
The City Commission passed (MS2-377) a motion of the City Commission accepting
the administration's recommendation in connection with the proposed modifications
of existing concession agreement between the City of Miami and "Bette and Bert 66
Marina, Inc.", further authorizing the City Manager to extend to two years the
time within which arrearages arising from said agreement can be paid, at a
percentage to be negotiated by the City Manager.
In connection with the above (M82-377), the City Attorney was instructed to
issue a legal opinion as to whether a month to month concession agreement is
technically and legally "a lease".
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RECOMMENDATIONS
A concession agreement with Bette and Bert 66 Marina, Inc., is not a lease and
conveys no leasehold interest in the property; further, the occupancy would be
on a month -to -month basis, terminable at the will of the City. It would be
impractical to bid out pursuant to the Waterfront Charter provisions, a facility
on an interim basis when the successful bidder could not be guaranteed a reason-
able length of time to amortize out capital cost of equipment and inventory, in
that the impending development of Watson Island caused this operation to be a
short term interim use.
In,that the continued operation of a refueling facility on Watson Island
adjacent to the government cut and)the intercoastal waterway serves the best
interest of`the boating public, acid a negotiated settlement of the arrearages
would increase general revenues to the City, the following recommendations
have been made:
1. Conditions for Settlement of Arrearages
a) The concessionaire agrees to pay the City arrearages as outlined in
the internal audit report 82-455 for the period January 1, 1981,
through December 31, 1981, at the rate of one thousand dollars
($1,000.00) per month over the next three (3) years with the unpaid
principal balance being due and payable at the end of the three (3)
year period.
b) The concessionaire agrees to intercede in a lawsuit with the City
against Mr. Bert Tumpson former operator of the facility for the
recovery of approximately $22,371.00 owed the City and which i.s now
being included in the amount owed as a result of the audit.
2. New Interim Concession Agreement
a) Acceptance of conditions for settlement of arrearagesas precedent to
execution of the new interim agreement.
b) Term - The interim concession agreement shall be on a month -to -month
basis terminable at the will of the City upon notification of 60 days.
c) Rental - Payment to the City of one thousand two hundred dollars)per
month payable monthly in advance as a minimum guarantee or 3.5", of
gross sales of gasoline, diesel fuel, and related petroleum products,
and 7 of the gross sales of accessory items not related to petroleum
or its products, all being exclusive of State and Federal taxes.
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