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City staff recommend Casa Katrina for Union Station lease; council asks about brewing-equipment insurance
Summary
City staff recommended Casa Katrina as the preferred tenant for Union Station—s first-floor restaurant, outlining a proposed lease with $7,000 base monthly rent, a five-year initial term (two optional five-year renewals), and a requirement to begin brewing operations within six months; council members pressed staff on insurance and equipment responsibility.
City staff recommended Casa Katrina as the preferred tenant to lease and operate the first-floor commercial restaurant space at Union Station and presented proposed lease terms that include conditions for on-site brewing operations.
Emily McGuire, presenting the city—s tenant-selection process, said staff issued a request for proposals earlier this year, conducted outreach to roughly 29 partners, hosted seven walk-throughs and received four complete proposals by the May deadline. After an internal review, staff advanced three proposals to in-person interviews and selected Casa Katrina as the recommended tenant based on criteria including financial capacity, community and economic impact, project feasibility and community benefits.
McGuire summarized the proposed terms: a base rent of $7,000 per month with a 5% annual increase; an initial five-year lease with two optional five-year renewals (potential total 15 years); and tenant responsibility for utilities and property taxes. "The Casa Katrina team has communicated to us that they have full intention of utilizing the brewing equipment and brewing space," McGuire said, and the lease includes a condition requiring brewing operations to commence within the first six months, with one optional six-month extension. If brewing does not begin within the first year, the city reserves the right to revoke the tenant—s use of the brewing portion of the premises and to take possession of or lease/sell the brewing equipment on-site without revising the lease terms.
Council members asked who would bear the cost if expensive brewing equipment were damaged during the learning period. Staff replied that the tenant will be required to maintain insurance covering the equipment and operations. "The tenant will be required to have insurance, so that would be covered under their insurance," a staff presenter said. Council members requested copies of the finalist proposals and the interview video for further review; staff agreed to provide those materials to the city clerk prior to the regular meeting.
Staff projected the lease would generate approximately $464,000 in base rent over the initial five-year term and about $232,000 in associated tax revenue (sales, food-and-beverage and property tax), for a combined projected total of about $696,000 in the first five years.
The presentation closed with the Casa Katrina owners available to answer questions; no lease was approved at the pre-council meeting and the item is scheduled for council consideration at the regular meeting.
