Okaloosa County BOCC — December 1, 2015 — Memo to BOCC Pier Association Lease 12-1-15

TALLAHASSEE FORT LAUDERDALE 1500 Mahan Drive 110 East Broward Boulevard Suite 200 Suite 1700 Tallahassee, Florida 32308 Fort Lauderdale, Florida 33301 (850) 224-4070 Tel (954) 315-3852 Tel (850) 224-4073 Fax TAMPA 2502 Rocky Point Drive Suite 1060 Tampa, Florida 33607 (813) 281-2222 Tel (813) 281-0129 Fax TO: MEMBERS OF THE BOARD OF COUNTY COMMISSIONERS FROM: GREG STEWART, COUNTY ATTORNEY RE: LEASE WITH PIER ASSOCIATES, INC. DATE: DECEMBER 1, 2015 At its November 17th, 2015 meeting, the Board of County Commissioners directed the County Attorney to assemble information concerning the lease with Pier Associates, Inc. This was to include not only the background of the lease itself but also issues relating to the deficiency in maintenance activities and the possibility that additional revenue is due from the Lessee. Below is a summary of that information. LEASE BACKGROUND The lease relating to the Pier was initially entered into on September 23, 1986 between Okaloosa County (the “County”) and Pier Associates, Inc. (the Lessee”). The initial term was for twenty-five years (25) beginning on October 1, 1986. The initial lease contained a schedule of lease payments which began at a rate of $65,500.00 per year and increased for each five year period of the lease term. The lease required that the premises were to be open to the general public and to be used as a fishing pier, bait and tackle shop, restaurant, lounge and snack bar. The lease also required the Lessee to maintain the premises in good repair and in at least as good condition as delivered, with ordinary wear and tear, damage by fire or other casualty excepted. The County and the Lessee entered into a First Amendment to Pier Lease on April 3, 1998. The First Amendment made several changes to the Initial Lease relevant to the Board’s review. Initially, the term of the lease was extended for twenty-five years (25) beginning on April 1, 1998 and granting the Lessee an additional five (5) year option to renew the terms of the lease. The First Amendment also increased the rent schedule for the lease. The current lease rate is $162,984.00 per year which continues until March 31, 2019 and then is increased to $195,581.00 through the end of the term of the lease. The First Amendment also greatly expanded upon the obligations of the Lessee to maintain the premises. In addition to maintaining the leased premises in excellent condition and repair, and in as good or better condition and repair as that in which they were delivered subsequent to reconstruction after Hurricane Opal, ordinary wear and tear, damage by fire or other casualties exception, the Lessee was to also perform the following minimum standards. These include: Lease with Pier Association, Inc. Page | 2 December 1, 2015 o Restrooms shall be cleaned and s