ANNA MARIA – After expressing some differing opinions and options, Anna Maria city commissioners voted 4-0 in favor of awarding two-year, beach cabana rental-related franchise agreements to Beach Suites, CabanUp and My Beach Concierge.
During the Oct. 8 commission meeting, the mayor, city commissioners and city staff discussed awarding franchise agreements to all three applicants, to two of the three applicants or none of the three applicants.
When the franchise agreements take effect on Jan. 1, Beach Suites, CabanUp and My Beach Concierge will be the only companies allowed to offer cabana rental, setup and delivery services in Anna Maria for the next two years.
The franchise agreements will limit the total number of rental cabanas to 36 per day in the already allowed six-block rental zone that extends south from Magnolia Avenue to Oak Avenue. Each franchisee will be limited to a total of 12 cabana rentals per day and only two cabana rentals in each block of the six-block rental area.
COMMITTEE REVIEW
On Oct. 1, the three franchise agreement applications and proposals the city received in response to the city’s request for proposals (RFP) were reviewed by a three-member evaluation committee that consisted of City Treasurer Randy Maxson, Code Enforcement Manager Tom Collins and Planning and Zoning Committee member Jeff Rodencal.
The evaluation committee scored three bids on weighted 100-point criteria that awarded a maximum of 35 points for the franchise fee proposal, up to 30 points for the company’s operational approach, up to 20 points for past experience and qualifications and up to 15 points for references and past performance.
According to the committee meeting minutes, Maxson and Collins recommended not awarding any franchise agreements because of cost and enforcement concerns. Rodencal recommended the city commission award contracts to two proposers.
COMMISSION DISCUSSION
During the city commission meeting, Mayor Mark Short said the evaluation committee did a nice job with its evaluation and recommendations, but it was up to the commission to decide what to do with the proposed franchise agreements.
Short said the evaluation committee ranked My Beach Concierge the highest, with an average weighted score of 84.33, CabanUp at 83.92 and Beach Suites at 75.10.
Short said he also looked at the committee rankings with the proposed franchise fees removed. He said minus the fee offering, Beach Suites ranked highest at 62 points, followed by CabanUp at 57.67 and My Beach Concierge at 49.33.
My Beach Concierge offered a $20,000 annual franchise fee if two companies were selected and a $15,000 annual fee if three companies were selected.
CabanUp offered $15,000 per year if two vendors were selected or $10,000 if three were selected.
Beach Suites proposed a $7,500 per year franchise fee if two vendors were selected and $5,000 if three vendors were selected.
When providing his input, Maxson said the proposed franchise fees would cover about half of the city’s estimated enforcement and administrative costs.
Throughout the discussion, Commission Chair Charlie Salem expressed his support for awarding franchise agreements to all three of the businesses that submitted proposals.
“I think we should go with three vendors to allow for all these participants to prove whether or not they are going to be good stewards of this activity,” he said, noting the franchise fees and vendor performance and compliance would be addressed in real time and evaluated again in two years.
Commissioner John Lynch also supported awarding three agreements, but he questioned the amount of the franchise fees offered.
Lynch said he did some research regarding revenue generation and profit and loss scenarios.
“Based on that analysis, the proposed bids are significantly lower than what I think they should be,” he said, noting the agreements would provide the recipients with prime beachfront property upon which to conduct their business.
Commissioners Gary McMullen and Kathy Morgan-Johnson were initially in favor of entering into agreements with My Beach Concierge and CabanUp because they offered the two highest franchise fees, but they both later supported awarding three franchise agreements.
Commissioner Chris Arendt was absent with excuse, but he sent the mayor a letter to read aloud during the meeting.
“I regret that I cannot be there for this week’s commission meeting, but wanted it on the record that I would have voted to move forward with the top two bids,” Arendt said in his letter. “I also feel that having just two vendors is a positive on a few fronts.”
Morgan-Johnson said, “I also don’t want to have no cabanas on the beach.”
She said the two-year agreements would provide time for the city to evaluate its administrative and enforcement costs before the franchise agreements are offered again in two years.
“If we delay this, what is the outcome of that?” she asked.
Short said the RFP process would have to be started over again and that could take at least six weeks to bring it back to the commission. He said the agreements were scheduled to take effect Jan. 1.
Salem asked what would happen on Jan. 1 if the commission rejected all three franchise proposals.
“The ordinance says that you need a franchise to conduct this business. So, if you do not have a franchise, you do not conduct the business,” Short said.
City Attorney Pam Cichon questioned the fairness of three companies paying different franchise fees for the same rental privileges.
“I understand that everybody bid something else, but if everybody’s getting the same thing by being given a franchise, everybody should be paying the same thing,” she said.
Salem asked if the different fee amounts would create a legal issue.
In response, Cichon said, “No, you can do that. It just doesn’t seem quite fair in the end. If somebody gets less territory, fine, they pay less.”
Short said that’s how the RFP was crafted and the proposed franchise fees could not be renegotiated without issuing a new RFP – a process he said would take at least six weeks.
By selecting three firms, the city will collectively receive $30,000 per year in franchise fee revenues for the next two years. On Jan. 1, the three franchise agreement holders will begin making monthly franchise fee payments to the city, in accordance with the franchise fee offered. At $15,000 per year, My Beach Concierge will pay the city $1,250 a month for two years. At $10,000 per year, CabanUp will pay $833 per month for two years. At $5,000 per year, Beach Suites will pay $416 per month for two years.
BUSINESS OWNER COMMENTS
Tiffany Adell told the commission the Beach Suites company she and Audrey McLoughlin co-own is not the Island’s loudest cabana rental and setup business, but it is the most established.
Adell said Beach Suites started in October 2020 and has had a physical location in Holmes Beach since 2021. She said Beach Suites has never used QR codes or large logos and is the only franchise applicant that hasn’t received a citation.
Adell noted the commission spent more than a year discussing and revising its cabana rental regulations, but the evaluation committee spent little time evaluating the applicants beyond the franchise fee offered.
She said Beach Suites had the most combined points in the three qualification categories but was ranked third because of the franchise fee points. She said Beach Suites was willing to discuss the franchise fee it offered.
Adell urged the commission to look beyond the franchise fees and consider each applicant’s experience, reputation and compliance and performance history. She said Beach Suites wants to remain part of the Anna Maria community.
Husband and wife Peery and Becky Heldreth own and operate My Beach Concierge. When addressing the commission, Peery said, “Our bid was between 15 and 20% of our gross revenue, which was pretty much the max of any business that would be able to do that.”
After the meeting, when asked about paying a higher franchise fee than the others, Peery said. “My Beach Concierge we want to be a community partner and we’re very pleased to be able to offer a franchise fee that we felt like that would help our community and ensure that they weren’t bearing the burden of the regulations that we were working through. We’re just so very happy that we were able to get one of the franchise agreements. It means a lot to a small family business.”
“At this point we’re just glad it’s over,” Becky added.
