Quarterly report pursuant to Section 13 or 15(d)

Commitments and contingencies

v2.4.1.9
Commitments and contingencies
 3 Months Ended
Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies
Commitments and contingencies:
 
Operating leases:
The Company is obligated under several operating leases for the restaurants, equipment and office space, expiring in various years through 2031, which provide for minimum annual rentals, escalations, percentage rent, common area expenses or increases in real estate taxes.
 
Future minimum rental commitments under the leases and minimum future rental income per the sublease in five years subsequent to March 31, 2015 and thereafter are as follows:
 
Year Ending 
 December 31,
 
Expense
 
Income
 
Net
Amount
2015
 
$
5,012,472

 
$
(933,409
)
 
$
4,079,063

2016
 
7,313,292

 
(1,279,269
)
 
6,034,023

2017
 
7,086,209

 
(1,059,545
)
 
6,026,664

2018
 
7,209,596

 
(1,079,640
)
 
6,129,956

2019
 
7,372,206

 
(1,116,229
)
 
6,255,977

Thereafter
 
89,522,104

 
(3,084,946
)
 
86,437,158

Total
 
$
123,515,879

 
$
(8,553,038
)
 
$
114,962,841


 
Rent expense (including percentage rent of $79,718 and $108,078 for the three months ended March 31, 2015 and 2014, respectively), included in continued operations, amounted to $851,519 and $966,656 for the three months ended March 31, 2015 and 2014, respectively. Rent expense included in continuing operations has been reported in the consolidated statements of operations and comprehensive loss net of rental income of $183,081 and $194,893 for the three months ended March 31, 2015 and 2014, respectively, related to subleases with related and unrelated parties which expire through 2025.

 
License and management fees:
Pursuant to its amended and restated operating agreement executed in June 2007, Bridge Hospitality, LLC is obligated to pay management fees equal to 2% of revenues to a member for the life of the agreement. Management fees amounted to $20,629 and $21,082 for the three months ended March 31, 2015 and 2014, respectively. Included in accounts payable at March 31, 2015 and December 31, 2014 are amounts due for management fees of $6,219 and $8,180, respectively.

In January 2010, STK Vegas entered into a management agreement with a third party for a term of 10 years, with two five-year option periods. Under this agreement, STK Vegas shall receive a management fee equal to 5% of gross sales, as defined (“gross sales fee”) plus 20% of net profits prior to the investment breakeven point date and 43% of net profits thereafter (“incentive fee”). In addition, STK Vegas is entitled to receive a development fee equal to $200,000. The Company has elected to receive a credit against a portion of its obligation (estimated at approximately $387,000) to fund the build-out in lieu of receiving the $200,000. Management fees amounted to $1,321,430 and $1,240,408 for the three months ended March 31, 2015 and 2014, respectively.
 
In July 2009, One 29 Park Management entered into an agreement with a third party. Under this agreement, One 29 Park Management shall receive a management fee equal to 5% of gross revenues, as defined, from the restaurant, banquets, room service and rooftop sales and 50% of the base beverage fee, as defined, for the life of the management agreement which expires in 2025. Management fees amounted to $112,853 and $117,324 for the three months ended March 31, 2015 and 2014, respectively.
 
In July 2010, Hip Hospitality UK entered into a management agreement with a third party to manage and operate the food and beverage operations in the Hippodrome Casino in London. Under this agreement, Hip Hospitality UK shall receive a management fee equal to 5.5% of total revenue, as defined, as well as an incentive fee if certain conditions are met, for the life of the management agreement which expires in 2022. Management fees amounted to $172,612 and $185,983 for the three months ended March 31, 2015 and 2014, respectively. Included in accounts receivable and other assets at March 31, 2015 and December 31, 2014 are amounts due for management fees and reimbursable expenses of $202,635 and $377,320, respectively.
 
In December 2011, TOG Aldwych entered into a management agreement with a third party to operate a restaurant, bar and lounges in the ME Hotel in London. Under this agreement, TOG Aldwych shall receive a management fee equal to 5% of receipts received from food and beverages operations. In addition, TOG Aldwych is entitled to receive a monthly marketing fee equal to 1.5% of receipts received from food and beverages operations and an additional fee equal to 65% of net operating profits, as defined, for the life of the management agreement which expires in 2032. Management fees amounted to $267,515 and $307,017 for the three months ended March 31, 2015 and 2014, respectively. Included in accounts receivable at March 31, 2015 and December 31, 2014 are amounts due for management fees of $302,865 and $200,124, respectively.