First Amendment to Lease for
2319 Central Avenue – Play House,
dba Project Burger
October 17, 2023
2319 Central Avenue: Background
• Approximately 1,850 square ft of space in Historic
Alameda Theatre complex
• May 1, 2018 – City Council approved a 10-year
lease with Project Burger, with one 5-year
extension option.
• In 2019 and 2020, business experienced financial
difficulty due to business partner’s departure and
COVID-19 pandemic
Current
2319 Central Avenue: Lease Status
• Business in distress
• A one person operation with no additional staff
• Limited hours of operation (see diagram)
• Rent payments are intermittent
• Existing lease is well above current market rate
• Pays $4.09/sq ft vs. current market rate of $2.98/sq ft • Market demand for restaurant spaces is currently very limited • Lessee approached City regarding financial challenge, however, tenant did not receive COVID-19 rent relief
• Currently $238,000 in past due rent
Current Hours of Operation
• F
Staff Recommendation: Amend Lease for 2 Years
Amend Lease with new two-year term
New lease rate of $2.98/sq. ft. consistent with
current market rate
Include provisions regarding hours of operation to
support vitality of surrounding commercial areas
Include provisions for immediate termination for
failure to pay rent on time or failure to maintain
operating hours
Relieve outstanding rent of $238,000
Alternate Options for Consideration
• Give Staff direction to negotiate alternate
terms
• Terminate lease, immediately advertise
space, and return to Council with legal
options to recuperate past-due rent
Expect minimum 2-year vacancy
Expect lower, current market rate rents for
space
Staff does not believe efforts to recoup lost
rent will be successful, due to tenants lack of
financial resources
Authorize staff to proceed with execution of first amendment to lease.
• Maintains occupancy in premium location in downtown district • Allows tenant to operate at a more appropriate market lease rate • Allows tenant time to restructure
• If Project Burger is successful, City Council can extend term Staff Recommendation