The Oakley City Council approved the lease for Republic of Cake during last night’s City Council meeting at $1 per square foot. The cake shop is expected to be open at some point this summer, however, they currently have a shop in Orinda since 2009 that you can begin tasting immediately. I’ve heard nothing but good reviews on their cup cakes.
According to the Staff Report, here is the fiscal impact:
The newly-constructed building is currently a “vanilla shell” and Mr. McNiff and Mr. Fang have asked for the City’s financial participation in a “build-to-suit” lease. The build out of the facility will include all fixed in place equipment such as plumbing, hood with makeup and exhaust systems, grease trap/collector, electrical, and HVAC. Pursuant to the proposed lease agreement, the cost of these improvements shall not exceed $220,000. Mr. McNiff and Mr. Fang will invest $50,000 to $60,000 for all removable equipment such as ovens, refrigerators, furniture, and small kitchen equipment.
The Successor Agency will receive $1,300 per month in rent. Base rent will increase at a rate of 2.5% per year. The return on investment in tenant improvements will be made through base rent combined with percentage rent. The owners propose that for years 1 through 5, the break point will be set at $175,000 –with a percentage rent of 5.0% for all gross sales above $175,000. During years 6-10, the owners propose the break point will be set at $200,000 –a percentage rent of 5.0% for all sales over $200,000.
Based on this arrangement, rental revenue would be $15,600 in base rent with an estimated $8,750 in percentage rent for the first year of operation. Over the initial five year period, the base rent revenue would be $81,999 with percentage rent revenue an estimated $55,889, for a combined income of $137,887. In years 6 through 10, the base rent revenue would be $92,774 with estimated percentage rent revenue of $86,514, for a combined income of $179,288.
Over the 10-year period, the total rental income is estimated to be at least $317,000, based on the above assumptions.
Sam’s Room
On a side note, I was visiting their website this morning and saw that they have a section marked “Sam’s Room”. It highlights how “Sam’s Very Messy Chocolate Cupcake” is dedicated to Sam and children everywhere. With each purchase you help provide much needed financial support to a local charity or organization providing assistance, medical or otherwise, for children in need.
In January we raised $ 543.08 for Xenophon Therapeutic Riding Center in Orinda, CA. Xenophon offers life-changing experiences for children with a wide range of disabilities and provide therapeutic horseback riding in a safe and secure environment. Our children achieve goals that they never before dreamed possible.
For February Sam’s charity is We Care Services for Children, in Concord, CA. We Care provides children with special needs skills for a better start in life. Their program helps both parents and their children by starting early with a set of therapies and early-childhood education programs. We Care services can be either at their center or at the child’s home, or both, depending on the needs of the child and the wishes of the parent.
Since we opened you have bought nearly 34,400 Sam’s Very Messy Chocolate Cupcakes and donated: $ 19,547.52
Visit Republic of Cake online
1 comment
$1 a square foot seems very low.
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