Notice: At the proposer`s request certain proprietary

RECEIVED
Via USB at 2.50pm, Sept. 30, 2015
Notice: At the proposer's request certain
proprietary information has been redacted.
Proposal for THOMAS STREET SHOP SPACE AT SEATTLE CENTER Our new Roastery on Capitol Hill exemplifies our commitment to our roots as well as demonstrates the risks we are willing to take to ensure our future is as relevant and meaningful as our past. In furthering our relationship with the Seattle Center, we seek to create another inviting location to showcase our Seattle heritage and to create a warm and welcoming space for the community. FINANCIAL STABILITY STARBUCKS HERITAGE Founded in 1971, Starbucks has evolved from our first location at Pike Place Market to creating a third place for consumers across the globe. Under Howard Schultz’s leadership and with a strong executive team the company has continued to flourish. With a current market valuation of $84.8B, we are continuing to innovate to meet our customers wherever they are by introducing new format stores and constantly enhancing the experience at our current locations. We celebrated a record year in 2014, with highlighted information from the Annual Return below. Howard Schultz, CEO, described the balance between growth and profitability and Starbuck’s corporate responsibility: For several years now, Starbucks has recognized that building a great, enduring company requires being performance driven through the lens of humanity. Never, we believe, has this been more critical, which is why Starbucks remains deeply committed to striking the delicate balance between profitability and our social conscience. I am especially proud to share with you that, in fiscal 2014, Starbucks not only achieved another year of record performance, but we did so while doing more for our people and the communities we serve than at any time in our 43-­‐year history. -­‐ Howard Schultz from Starbucks Fiscal 2014 Annual Letter to Shareholders LOOKING FORWARD Over the next five years our growth will be based around the following areas: •  Growing our coffee core with Reserve Stores •  Creating more in-­‐store, channel, and tea occasions •  Growing loyalty and mobile commerce, including Mobile Order and Pay •  Growing the global store portfolio •  Creating pathways of opportunity for our employees and the communities we serve DESIGN V ISION Our vision is flexible: To create local relevance, warmth and beauty in places for people to gather. For tourists. For locals. For people moving and people relaxing. PIKE PLACE tourist tourist tourist tourist RESERVE ROASTERY & TASTING ROOM pure experience pure experience pure experience STARBUCKS EXPRESS
small format high speed small. commuter. Page 8
DISNEY ORLANDO
AIRPORT POP-­‐UP local local local local DESIGN V ISION FOR
THOMAS STREET •
•
•
•
•
•
•
Tourist Primary
Flexible
Fast
Comfortable
Local
Experiential
Together…
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CONCEPT
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STARBUCKS LETTER OF INTENT
October 1, 2015
Seattle Center Executive Office
305 Harrison Street, Suite 215
Seattle WA 98109
RE: THOMAS STREET SHOP SPACE
We are pleased to present to you this letter (“Letter of Intent”) which sets forth the terms on
which Starbucks Corporation (“Starbucks” or “Tenant”) is willing to negotiate a lease for the
Thomas Street Shop Space at the Seattle Center (the “Premises). This Letter of Intent is not
intended to be a binding contract (except as expressly stated herein in the Confidentiality
provision), a lease or an offer to lease, but is intended only to provide the basis for negotiations
for a lease document (the “Lease”) between City of Seattle (“Landlord”) and Starbucks as Tenant.
PREMISES: Approximately 2,716 square feet of retail space as shown on the attached site
plan. Landlord will provide Tenant with the legal description of the land upon which the
Building is located (the "Property").
LEASE: Landlord and Tenant will use Landlord’s form lease as a basis for negotiation. The
terms and conditions of the Landlord’s form lease will be subject to compromise and must be
reviewed and approved by Tenant and Tenant’s counsel.
TERM:
Ten (10) years plus four (4) consecutive five (5)-year options to extend the term.
RENT:
Years
1-5
6-10
Monthly
$14,711.66
$16,182.83
Extension Options:
11-15
$17,801.11
16-20
$19,581.22
21-25
$21,539.35
26-30
$23,693.27
Yearly
$176,540
$194,194
$213,613.40
$234,974.74
$258,472.21
$284,319.43
Per Square Foot
$65.00
$71.50
$78.65
$86.51
$95.16
$104.68
PERCENTAGE RENT: Tenant will pay six percent (6%) of Tenant’s annual gross receipts in
excess of Four Hundred Thousand dollars and no/100 ($400,000.00).
RENT COMMENCEMENT: Tenant will not commence payment of rent (nor charges for
common area maintenance, taxes or insurance) until the date that is the earlier of: (a) the date
Tenant opens for business at the Premises, or (b) ninety (90) days after the later of the date: (i)
Tenant accepts possession of the Premises and (ii) Tenant receives all permits, variances and
governmental approvals necessary to construct and operate Tenant's store in the Premises.
Page 1 of 1
Tenant Date/Initials: _________/_________
Landlord Date/Initials: _________/_________
USE: A coffee store or any other lawful retail or restaurant use, including the sale of beer and
wine, which does not conflict with any written exclusive use granted to another tenant in the
Seattle Center prior to the date of this Letter of Intent and disclosed to Tenant in writing.
EXCLUSIVE USE: Landlord will not sell or permit any party, other than Tenant, to sell on
the Property: (a) whole or ground coffee beans, (b) espresso, espresso-based drinks or coffeebased drinks, (c) tea or tea-based drinks, (d) brewed coffee, and/or (e) blended beverages;
Notwithstanding the foregoing, other tenants on the Property may sell brewed coffee or brewed
tea that is neither (i) gourmet nor (ii) brand identified and may also sell pre-bottled tea or prebottled tea-based drinks. For purposes of the Lease, “gourmet” shall be defined as: (a) Arabica
bean-based or (b) sourced from a gourmet coffee or tea brand such as Coffee Bean & Tea Leaf,
Intelligentsia, Peets, Caribou or similar branding. “Brand identified” shall mean coffee or tea that
is advertised or marketed within the premises by its brand name, or served in a brand-identified
cup.
Any existing tenant as of the date of this Letter of Intent whose lease allows it to sell any of the
foregoing products will not be subject to Tenant’s exclusive. Landlord agrees that, to the extent
that it has reasonable control over such tenant’s use and changes in use, it will exercise such
control to enforce Tenant’s exclusive.
Full service, sit-down restaurants with a wait staff and table service serving a complete dinner
menu may sell, in conjunction with a sale of a meal, brewed coffee, tea, and hot espresso drinks
for on-premises consumption only.
SCHEDULED DELIVERY DATE:
Tenant on January 1, 2016.
Landlord will deliver possession of the Premises to
TENANT IMPROVEMENTS :
Tenant may install such tenant improvements, fixtures
and finishes in the Premises as Tenant deems necessary or desirable.
SIGNAGE:
Tenant may install signs in, on and about the Premises to the maximum extent
permitted by local law. Landlord hereby consents to Tenant’s trademarked name(s), colors,
letters, font and logo in Tenant’s signage.
CONDITION OF PREMISES AND BUILDING:
As-is.
COMMON AREA MAINTENANCE, TAXES AND INSURANCE:
Landlord will
insure the Building and will repair and maintain the Building exterior walls and roof, (but not the
exterior windows and exterior doors) in good and sound condition and in accordance with all
codes and regulations. Commencing on the Rent Commencement Date, Tenant will pay its prorata share of Landlord's actual, reasonable and out-of-pocket costs for real estate taxes, insurance,
and common area maintenance.
OUTDOOR SEATING:
Tenant may set up outdoor seating at no additional rent.
PERMIT CONTINGENCY: Tenant will have the right to terminate the Lease if it is unable to
obtain all permits, variances and governmental approvals needed for the lawful construction and
operation of its store (including signage).
ASSIGNMENT AND SUBLETTING: Tenant may, without Landlord’s consent, sublet all or
any portion of the Premises or assign the Lease to: (a) a parent, subsidiary, affiliate, division or
other entity controlling, controlled by, or under common control with Tenant; or (b) a successor
entity related to Tenant by merger, consolidation, reorganization or government action; or (c) an
Page 2 of 4
Tenant Date/Initials: _________/_________
Landlord Date/Initials: _________/_________
entity that acquires not less than ten (10) of Tenant’s locations, operating under the trade name
“Starbucks Coffee” or any other trade name then used by Tenant. Except as stated above, prior
to any other assignment or sublet, Tenant shall first notify Landlord of its intent to market the
Premises for assignment or sublet. Upon receipt of such notice, Landlord shall have thirty (30)
days to elect to terminate the Lease by notice to Tenant. Such termination shall be effective
ninety (90) days after Tenant’s receipt of such notice. If Landlord does not elect to terminate the
Lease within such thirty (30) days, Tenant shall have the right to sublet all or any portion of the
Premises or assign the Lease with Landlord’s consent.
For purposes of the Lease, any sale or transfer of capital stock, including redemption or issuance
of additional stock of any class, will not be deemed an assignment, subletting or transfer of the
Lease.
ALTERNATIVE ENERGY SYSTEMS: Tenant will have the right to install, utilize, maintain
and remove a solar photovoltaic or other alternative energy system, such as wind power (“AE
System”), including all related equipment, appurtenances, wiring and meters on the roof of the
Building for use at the Premises. The installation will include the right to make necessary
penetrations through the roof and/or Building for such use. Landlord will grant Tenant the
necessary roof-top and other easements to do so at no additional rental charge. All systems will
be in accordance with applicable law and the approved AE performance specifications and shall
comply with the proper roofing standards for such systems. Tenant will be permitted to make any
necessary changes, alterations or additions to AE System at any time during the Lease Term
(including any extensions or renewals). Tenant will bear sole responsibility and cost to obtain all
required related permits; install, operate and maintain the AE System; and indemnify Landlord,
its agents and employees, from and against all costs for property damage arising solely out of the
installation, operation, maintenance and/or removal of the AE System. Tenant will be solely
entitled to the exclusive use and proceeds from the sale of any electricity generated by the AE
System at the Premises.
BROKER’S COMMISSION: None
CONFIDENTIALITY:
Landlord and Tenant will maintain in confidence all information
relating to Tenant’s proposed tenancy and development of the Premises, including, but not
limited to, the terms of this Letter of Intent and the Lease, and will not disclose such information
to any other party without written consent. Such confidential information may be released to the
parties' employees, partners, consultants, attorneys, accountants and lenders who have a
reasonable need for such confidential information, provided that such individuals agree to
maintain the confidential nature of the information. Notwithstanding anything in this Letter of
Intent to the contrary, the foregoing provision shall be binding on the parties.
Please sign below if the terms described in this Letter of Intent are acceptable to you. This Letter
of Intent is non-binding, except as expressly stated herein. It will be superseded by, and the
parties will only be bound by, the terms of a written lease agreement, in form and substance
satisfactory to both parties, which has been fully executed and delivered by the parties. Until and
unless the parties mutually execute a lease, either party may terminate the negotiations
contemplated herein at any time, for any reason, and without liability or further obligation (except
in regards to its confidentiality obligation) to the other party, by providing written notice of
termination to the other party.
Page 3 of 4
Tenant Date/Initials: _________/_________
Landlord Date/Initials: _________/_________
STARBUCKS CORPORATION
______________________________
Name: Christie Crowe
Title: Director, Store Development – Pacific Northwest
Accepted and agreed to this ______ day of _______________, 20_______.
LANDLORD:
______________________________
Name: _______________________
Title: ________________________
Page 4 of 4
Tenant Date/Initials: _________/_________
Landlord Date/Initials: _________/_________
TIMELINE
December
January
February/
March
Page 17
April
PRELIMINARY CONSTUCTION BUDGET*
Site Improvements
Casework
Equipment Total
Furnishings
Signage
Design & Construction Fees
Overhead
Pre-opening expenses
$1,375,000
$140,000
$134,000
$100,000
$55,000
$225,000
$75,000
$11,000
Approximate Store Cost
$2,115,000
*Timeline and budget subject to additional inspection of the space and final design for
space and permitting timeframes.
May
STARBUCKS &
SEATTLE CENTER From our current Starbucks at The Armory to our hometown partnerships, Starbucks is undoubtedly a Seattle company. When people think of Seattle, they think of the iconic Space Needle, the Seahawks, and Starbucks. In partnering with you to create another Starbucks store within Seattle Center, we will give tourists and locals alike another store that embodies the experience of our brand. Our stores serve great coffee and food, but they are also a spot for people to connect and they give everyone a safe place to build community. To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. At our current store inside the Seattle Center Armory, we go above and beyond to partner with Seattle Center during events. From all baristas wearing Bumbershoot t-­‐
shirts during the festival to adding an outward facing water tap so visitors can have cool filtered water on demand to partnering with event coordinators to participating in Pride Fest both as participants and volunteers, our Starbucks team enthusiastically supports Seattle Center events throughout the year. As an entire company we are committed to both Seattle and to giving back to the communities of which we are a part. From our 44 year sponsorship of Bumbershoot to individual employees volunteering around Seattle, we demonstrate our excitement and pride in our hometown. We’re looking forward to continuing our fruitful partnership and enhancing the Seattle Center experience for everyone. THANK YOU!
Christie Crowe
Director, Store Development, PNW
(206) 318-3635
[email protected]
Cari Loveless
Store Development Manager, PNW
(206) 318-5107
[email protected]