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CITY OF SUNNY ISLES BEACH, FLORIDA
<br />NOTES TO FINANCIAL STATEMENTS
<br />FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023
<br />NOTE 11 -JOINT VENTURE (CONTINUED)
<br />During the fiscal year ended September 30, 2014, the City entered into a sublease
<br />agreement with the Corp and Beach Bar @ Newport Pier, LLC ("Beach Bar") whereby
<br />Beach Bar will sublease the entire leased premises consisting of the restaurant facility, bait
<br />shop, second floor of restaurant facility, and additional outdoor dining area on the premises.
<br />The initial term of the sublease is a ten (10) year term, with Beach Bar reserving the right to
<br />renew for four (4) additional terms of five (5) years. Beach Bar shall pay the City a base
<br />monthly rent of $15,000, plus all applicable sales tax, with the base rent being subject to
<br />increase based on the Consumer Price Index. In addition to the base monthly rent, Beach
<br />Bar shall pay to Corp for each year of the sublease terms, as a percentage of rent, an amount
<br />equal to the amount of annual gross sales times the following applicable percentages:
<br />$ 00.00
<br />- $ 2,000,000
<br />5%
<br />$ 2,000,001
<br />- $ 3,999,999
<br />7.5%
<br />$ 4,000,000
<br />- $ 5,000,000
<br />10%
<br />$ 5,000,001
<br />- $ 6,000,000
<br />11%
<br />$ 6,000,001
<br />- $ 7,000,000
<br />12%
<br />$ 7,000,001
<br />- $ 8,000,000
<br />13%
<br />$ 8,000,001
<br />- $ 9,000,000
<br />14%
<br />$ 9,000,001
<br />- no limit
<br />16%
<br />The sublease agreement with the Corp and Beach Bar expired and was not renewed as of
<br />July 31, 2023.
<br />On or about August 17, 2023, a new sublease agreement was entered into between the Corp
<br />(sublessor) and PRA Hospitality, LLC ("PRA") (subtenant). The initial term of the sublease
<br />is a five (5) year term. PRA shall pay the City a base monthly rent of $16,050, plus
<br />applicable sales tax with the base rent subject to increases based upon the Consumer Price
<br />Index. In addition to the base monthly rent, PRA shall pay to Corp for each year of the
<br />sublease terms, as a percentage of rent, an amount equal to 5% of all annual gross sales.
<br />The foregoing agreements may be modified by the parties based on changes in
<br />circumstances.
<br />The lease related activity is further discussed in Footnote 3 - Receivables and Due from
<br />Other Governments.
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