Calhoun/Bde Maka Ska Food Venue Lease Statement and Q&A

Calhoun/Bde Maka Ska Food Venue Lease Statement and Q&A

In response to misinformation in a weekend news story, the Minneapolis Park and Recreation Board is sharing the following statement and Q&A:

Statement

The current lease between Tin Fish owners and the Minneapolis Park and Recreation Board (MPRB), for operation of the MPRB restaurant building on Lake Calhoun/Bde Maka Ska, expires on December 31, 2017. Earlier this year, Tin Fish owners informed the MPRB they would not be renewing their lease. The MPRB issued a Request of Proposals (RFP) this summer and a committee of staff and community representatives have thoughtfully and thoroughly proceeded with a process to review proposals and recommend a vendor to MPRB Commissioners. A staff recommendation and commissioner decision is anticipated in November.

The weekend news story incorrectly stated the MPRB asked Tin Fish owners to invest $3 million into the building. All MPRB lease agreements with operators of food venues require investment into buildings being used, with both the vendor and the MPRB contributing to improvements at each site. To date, vendors at Harriet, Nokomis and Minnehaha have made improvements valued at almost $2 million: $1.1 million by Sea Salt in Minnehaha Regional Park, $500,000 by Sandcastle at Nokomis Regional Park, and approximately $280,000 by Bread and Pickle at Lake Harriet, part of the Chain of Lakes Regional Park.  Earlier this year the MPRB discussed potential terms with Tin Fish owners that included kitchen improvements of approximately $900,000 and restroom improvements of approximately $1.3 million per the regional park master plan, for a total of approximately $2.2 million. Funding for the kitchen improvements would be paid through an escrow account from Tin Fish proceeds. The restroom improvements would be funded by the MPRB.

Questions and Answers

Below are answers to most commonly asked questions the MPRB has received about the process:

What is the role of the committee in the RFP process?
As part of our RFP process, a committee reviews and evaluates the proposals that are received, conducts interviews, and recommends a preferred vendor/operator. It is common for committees to include content experts and key stakeholders in addition to MPRB staff. Committee members are expected to keep the review and evaluation process confidential.

What is the role of the Board of Commissioners in the RFP process?
The final decision on entering into an agreement is made by the Minneapolis Park and Recreation Board of Commissioners.  Commissioners consider a Board action to approve a recommended vendor. This recommendation is made by staff after the committee process is complete, an agreement has been negotiated, legal counsel has reviewed the agreement, and staff have prepared the necessary Board action and background materials.

Are there other examples of RFP processes and what is the history of how concessions have been selected?
The MPRB uses the RFP process on a frequent basis, examples range from selecting consultants for planning projects to companies that provide printing services.

For concession, the MPRB has entered into nineteen different agreements with eight different vendors for services provided at four concession venues within the Minneapolis parks.  Two of the nineteen agreements were a result of a public process which included an appointed Community Advisory Committees (CACs).  These two CACs were assembled because in both cases, one at Lake Harriet and one at Lake Nokomis, the vendor selection was contingent on proposed physical changes tied to service delivery.  All other vendor selections, including the current vendor at Bde Maka Ska/Calhoun, were a result of an RFP process that included a committee’s review and recommendation of vendors.

Will the proposals be evaluated based on profitability?
All proposers were asked to clearly outline the type of venue, income estimates, payment to the MPRB, investments in equipment and facilities, business plan, terms, operating season and hours and sample menu pricing.  They were also asked to include their experience in the restaurant or concession business.  All proposals were evaluated based on this information.

What profits does the MPRB retain from its current leases for other food venues?
This is negotiated as part of each agreement. Our current rates are: 

• 12% with Bread and Pickle (Lake Harriet) 2016 – 2020, with the option of requesting that the Board approve an additional five year term through 2025; renewals require reinvestments
• 12% with Sandcastle (Lake Nokomis) 2013 – 2023; an initial investment into the property
• 12% with Sea Salt Eatery (Minnehaha Park) 2014 – 2023; an initial investment into the property

Concessions proceeds are included in the Enterprise Fund.

Are we asking the current vendor to leave?
No, Tin Fish owners and operators Sheff and Athena Priest were offered a continuation, but decided not to renew. Their current contract is complete on December 31, 2017.