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April 15, 2010 Nick Kinsey Nicole Avril Permits for Various Pushcart Operators in City Parks
To: Recreation and Park Commission
Agenda Item Wording: Discussion and possible action to approve permits with Annie's Hot Dogs, La Cocina, Let's Be Frank and Onigilly for the operation of push cart concessions in various park locations. Background: The Recreation and Park Commission approved the publication and distribution of a Request for Proposals (RFP) package on July 16, 2009. The RFP solicited respondents to operate pushcarts in City Parks. The RFP asked respondents to bid on specific park locations and allowed respondents to propose to operate in parks other than those where pushcarts are currently located (Golden Gate Park and Civic Center). The Department undertook this endeavor in an effort to activate park spaces, provide additional amenities to park users and to generate additional revenue to the Department. The RFP prioritized menus featuring healthy and sustainably grown foods as well as those featuring distinct culinary offerings. On February 18, 2010, Department staff presented the selection panels recommendations to permit Annie’s Hot Dogs, La Cocina, Let’s Be Frank and Onigilly to operate in City Parks. Department staff have since negotiated permits with each of the selected respondents (Exhibits A-D). The Department is currently accepting proposals on a rolling basis and intends to return to future Commission meetings with additional selected respondents. Permit Terms: With the exception of the Onigilly permit, each of the permits are for a period of five years. As the Department is receiving less percentage rent from the Onigilly permit than the other permittees, Department staff have negotiated a one year permit and both parties have agreed to revisit the financial terms after the completion of the initial permit. Department staff agreed to a lower percentage rent because of the extensive amount of
commercial kitchen rental time needed for their menu offerings and the fact that as they only had one location, their commissary costs would be borne entirely by the one location. The permits require Department approval of the permittees equipment, menu and prices, signage and hours of operations. Additionally, the permittees would be required to clean and maintain the park space surrounding their concession. Due to the unique logistical and operating conditions of each permittee, the financial terms negotiated vary between each of the permits. In evaluating the financial terms of each permit, Department staff considered the number of pushcart locations a permittee has, their ability to distribute the cost of a Health Department required commissary across multiple pushcart locations and the amount of offsite prep work and labor required. The following chart lists the financial terms for each permittee.
Annie's Hot Dogs
Civic Center Plaza, Behind the Bandshell at the Music Concourse in Golden Gate Park and Spreckles Lake
Justin Hermann Plaza and Mission Dolores Park
Brief Description of Menu Traditional hot dog stand offerings incorporating organic foods in Golden Gate Park. At Civic Center menu also includes sandwiches, salads and fresh brewed coffee. Rotating menu, primarily focusing on Latin American inspired cuisine prepared by participants in La Cocina's entrepreneur development programs.
Minimum Annual Guarantee
Let's Be Frank
Justin Hermann Plaza
Grilled organic hot dogs
Justin Hermann Plaza
Traditional Japanese rice wrap similar to sushi but prepared with brown rice and served without fish.
10% If gross sales for a particular month are under $20,000 the percentage rent shall be 10%, if gross sales for a particular month are over $20,000 the percentage rent shall be 15%. If gross sales for a particular month are under $20,000 the percentage rent shall be 7%, if gross sales for a particular month are between $20,000 and $49,999 the percentage rent shall be 10%. If gross sales for a particular month are over $50,000, the percentage rent shall be 12.5%
Next Steps: Upon approval by the Commission of the attached permits, Department staff will work with the permittees to quickly begin operating each location. Department staff are in the final steps of negotiating a permit with Blue Bottle Coffee for the operation of a concession in Golden Gate Park and at Mission Dolores Park and anticipates returning to the Commission with said permit in May. Additionally, Department staff will be reconvening the selection panel shortly in order to review recent submissions. Recent submissions include a gourmet coffee cart, a Belgian waffle truck, and a roaming food cart market that would feature food trucks selling various ethnic foods and locate in a different park each day of the week. Financial Impact: If permits are approved with all of the selected respondents, cumulatively they would result in a revenue increase of no less than $113,000 to the Department annually. Supported By: Selection Committee (unanimously) Department management and staff Opposed By: None known Attachments: Exhibit A–Annie’s Hot Dog Permit Exhibit B-La Cocina Permit Exhibit C-Let’s Be Frank Exhibit D-Onigilly