New Operator Sought For Catalina Island Vons Express
Some highlights of the business opportunity include:
- The fixtures and equipment, pdf, currently on the site and valued at $20,000 by the parties, would be made available for use by the new tenant at no cost.
- The liquor license, pdf, also valued at $20,000 by the parties, would be transferred to the new tenant, subject to approval by the licensing authority, at no cost to the new tenant, except for the transfer, registration, and escrow fees that are capped (except for inventory-related escrow fees) at $2,750.00.
- A six-year lease with rent at $7,232.00 per month, adjusted for inflation each year, except for the last year of the lease in which Santa Catalina Island Company could increase the rent up to 20% over the previous year.
- The new tenant will have the right to terminate the lease at any time provided that the new tenant has not defaulted on or breached the lease.
As set out in the Consent Decree and the lease, a new tenant must comply with certain conditions for leasing the store site. For example, a new tenant must ensure that the grocery store is managed on a substantially continuous basis, a term defined in Paragraph III(O) of the Consent Decree, by a person having at least five (5) years combined experience as an owner/operator and/or manager of a grocery store, supermarket, convenience store, cash and carry business, or liquor store. Also, as set out in Paragraphs VI(N)(2)-(3) of the Consent Decree, one month’s security deposit will be required, although, under certain circumstances, a new tenant may be required to sign a guaranty agreement, pdf as well.
A new tenant of the store site must meet certain minimal qualifications set out in Paragraphs VI(Q)(1)-(4) of the Consent Decree - the most important being that it must have working capital in hand or committed from a commercial lender in an amount at least equal to $150,000 plus enough funds to cover assorted other costs such as the costs of purchasing inventory for four weeks of operation. The new tenant must also be approved by the Attorney General’s Office.