Template revised September 22, 2016.

COMMISSION

DATE: January 2, 2018

TO: Dave Soike, Interim Executive Director

to the ground lease with Duke’s Shilshole Bay Chowder House, LLC to change the following: (1)

to increase the square footage of the original ground lease by 1,522 square feet for a total of

8,022 square feet; (2) to increase the monthly rent during the Construction Phase from

$2,605.00 to $3,216.00 and during the Post-Construction Phase from $10,420.00 to $12,864.00;

and (3) to change the commencement date of the Construction Phase from June 1, 2018, to

EXECUTIVE SUMMARY

eliminate three parking spaces. Parking capacity is a sensitive issue at Shilshole and thus we do

not take any reduction lightly, even a minor one. Staff believes that the trade-off is necessary

and that the expanded restaurant will create a positive amenity for our stakeholders.

approximately 8,022 square feet in which to build their restaurant. This will result in an increase

start dates forward by two months.

Template revised September 22, 2016; format updates October 19, 2016.

execution Duke’s began an extensive and focused design process, during which it was

determined the ground lease area of 6,500 square feet would not completely accommodate

the restaurant’s concept. A larger area would ensure the proper flow and facility operation.

Incorporating the many sustainable elements integral to the Shilshole site also required a larger

area.

This restaurant location will serve as the benchmark for all other Duke’s restaurants operating

now and those in the future. Based on the additional effort and time needed to complete the

full design, it is important that Duke’s is permitted an extension of two additional months, by

moving the initial Commencement Date of the ground lease to August 1, 2018 and the date of

per month after construction.

This amendment will further ensure the following benefits:

The recreational boating industry is seeing higher cost of ownership, fewer new boat owners,

type operations. To continue to be competitive, a destination marina needs to provide multiple

upland amenities and activities for boaters. A restaurant will potentially increase monthly

moorage customer retention and bring new potential customers to the Marina and upland

Template revised September 22, 2016; format updates October 19, 2016.

Marina.

Additional benefits may include increased security, collaboration with marina events,

Post Construction Rent: $12,864 per month, $154,368 annually.

No later than August 1, 2019 or Substantial Completion whichever

Duke’s will now construct an approximate 8,022 square foot full-service, casual, waterfront

restaurant of contemporary design. This will consist of an approximately 6,522 square foot

restaurant/bar and 1,500 square foot outdoor deck and seating area. The structure will be

Mountains, and boating activities in the marina. The restaurant will be designed to reflect the

ALTERNATIVES AND IMPLICATIONS CONSIDERED

Cost Implications: Forgo an annual increase in lease revenue of $29,328.

Pros:

Template revised September 22, 2016; format updates October 19, 2016.

Alternative 2 – Amend the ground lease at Shilshole Bay Marina with Duke’s

additional revenues of $29,328 annually. (New annual revenue will increase from $125,000 to

$154,368 with annual CPI escalations).

Pros:

FINANCIAL IMPLICATIONS

Template revised September 22, 2016; format updates October 19, 2016.

Annual Budget Status and Source of Funds