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HomeMy WebLinkAboutOES 37-04 REPORT TO EXECUTIVE COMMITTEE Report Number: OES 37-04 Date: October 27, 2004 From: Stephen Reynolds Division Head, Culture & Recreation Subject: Don Beer Arena Snack Bar Concessions Lease Amendment - Pickering Hockey Association Incorporated File: CO3000 Recommendation: That Report OES 37-04 regarding the Don Beer Arena Snack Bar Concessions be received and; A By-law be enacted to authorize the execution of an amending licence agreement pursuant to which Pickering Hockey Association Incorporated will be permitted to continue to operate snack bar concession facilities within the Don Beer Arena; 3. Staff at the City of Pickering be given authority to give effect thereto. Executive Summary: The Pickering Hockey Association have an existing Licence Agreement to operate the snack bar concession facilities at Don Beer Arena. The Pickering Hockey Association have identified they are not meeting their anticipated snack bar revenue and are requesting a reduction in their monthly fee. The Operations & Emergency Services Department recommend that an amending licence agreement be initiated with the Pickering Hockey Association Incorporated. Financial Implications: Revenues: 2004 $1,000/month x 4 months $ 4,000.00 2005 $1,000/month x 8 months $ 8,000.00 Total: $12,000.00 Report OES 37-04 Date: October 27, 2004 Subject: Don Beer Arena Snack Bar Concessions - Lease Amendment - Pickering Hockey Association Incorporated Page 2 Background: On December 2, 2002, City Council enacted By-law #6064/02 to authorize the execution of a Licence Agreement with the Pickering Hockey Association Incorporated (PHA) for the operation of the Don Beer Arena Snack Bar Concessions. At the time of the renewal agreement, PHA had agreed to an increase in the monthly fee from $800 to $1,200 as a result of the additional third ice pad. In a letter dated September 23, 2004, PHA requested a reduction in their monthly fee. PHA have identified that over the past two seasons of operation they did not meet their anticipated revenue. PHA reported that during the 2002/2003 season, the new snack bar wasn't operational until January 2003. Three major tournaments were missed. The increase of ice useage with the additional ice pad for the full 2003/2004 season has not resulted in the increased sales to support the higher rent figure. PHA initially requested a reduction in the monthly fee from $1,200 back to $800. The City requires the Don Beer Arena snack bar concession to continue to operate. City staff have reviewed this request with PHA representatives. PHA would appreciate a reduction in the rate from $1,200/month to $1,000/month to the end of the term of their current agreement. The (Acting) Chief Administrative Officer and Division Head, Culture & Recreation recommend the monthly fee be reduced from $1,200/month to $1,000/month through to the end of the term of their current agreement (September 2004 - December 2005). Enactment of the draft by-law attached will authorize the execution of an amending licence agreement and be prepared in a form acceptable to the Solicitor for the City in consultation with the appropriate City Departments in conjunction with existing City practices. Attachments: 1. Draft By-law. 2. Letter from Pickering Hockey Association 2004. Incorporated dated September 23, CORP0227-07/01 Report OES 37-04 Date: October 27, 2004 Subject: Don Beer Arena Snack Bar Concessions Lease Amendment - Pickering Hockey Association Incorporated Page 3 Prepared By: Steph~n Reyn)olds Divisioh44ead, Culture & Recreation SR:lg Attachments Copy: Chief Administrative Officer Approved / Endorse~¢By: Everett tsma (Acting) Chief Administrative Officer Recommended for ti~ c. er~sideration of Pickering ~ Thomas J. (~,~n, P=~ief Administrative Officer CORP0227-07/01 THE CORPORATION OF THE CITY OF PICKERING BY-LAW NO. Being a by-law to authorize the execution of an Amending Licence Agreement with Pickering Hockey Association Incorporated for the operation of snack bar concessions at the Don Beer Arena. WHEREAS, pursuant to the provisions of the Municipal Act, R.S.O. 1990, chapter M.45 the Council of the Corporation of the City of Pickering may enact a by-law for leasing premises owned by the Corporation. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF PICKERING HEREBY ENACTS AS FOLLOWS: The Mayor and Clerk are hereby authorized to execute an Amending License Agreement, in a form acceptable to the City Solicitor, between the Corporation of the City of Pickering and Pickering Hockey Association Incorporated for the operation of snack bar concessions at the Don Beer Arena. BY-LAW read a first, second and third time and finally passed this 15th day of November, 2004. David Ryan, Mayor Bruce Taylor, City Clerk CORP0223-07/01 PICKERING HOCKEY ASSOCIATION INCORPORATED PICKERING ' ONTARIO September 23, 2004 Mr. Steve Reynolds City of Picketing I The Esplanade Picketing, Ontario Dear Mr. Reynolds Over the years, the profit from the snack bar at Don Beer has always been an integral source of income for the PHA. Used to defray rising registration, development programs, sponsoring underprivileged kid's etc. Dudng the 200212003 season with the delays, the new snack bar wasn't operational until January. This meant we missed 3 tournaments, which'are big sales weekends for the snack bar. With the close proximity of Tim Hortons, patrons brought in coffee and snacks themselves. Profit for the 02/03 season was non existent. With a full season ahead in 2003t2004, we looked forward to an increase in sales for the snack bar, which unfortunately has not happened. Tim Hortons continues to be our biggest competitor, our coffee sales (which were very profitable) have been one of the hardest hit. With the ever-increasing demand on peoples' lives, we are finding less and less volunteers. Subsequently, for the snack bar, this translates into more paid staff. According to the figures for the 200312004 season, the snack bar again ended in the red. This year the snack bar has a new manger and we are looking into ways to make the business profitable once more. We will be increasing certain pdces, looking for alternative suppliers and changing the menu to include new items. To help us in this endeavor, we are asking if the City of Pickering would be willing to lower our rent back to $800.00/month. Since the opening of Pad 3, the PHA no longer needs to purchase practice ice from outside sources for our teams. Unfortunately practices are not as profitable as games, in relation to the snack bar. Subsequently, the increase of ice usage has not translated into enough increased sales to support the higher rent figure. I look forward to hearing from you and eagedy aWait Your decision. Sincerely Gall Horobin President