Adoption of a Resolution
Authorizing Execution of Verdugo
Restaurant Corporation (The
Castaway) Lease
COMMUNITY
DEVELOPMENT
November 15, 2022
City Council
Site Map
• Lease began in 1960
• Multiple amendments and extensions
• $9M renovation 2017-2018
• Current lease ends in 2025 with
a 10-year extension
• Requested another 10-year
extension to 2045
Verdugo Restaurant Corporation
Castaway
Lease Terms
• New lease with clarifying language
• No changes in hours of operation
• Rent will be minimum rent or percentage of gross
sales, whichever is greater
• Annual audits and inspections
• Penalties for parking in the fire lane
• Allows for valet parking and collection of Transient
Parking Tax (TPT)
• Inventory of furniture, fixtures and equipment
• Clarifying language
Surplus Land Act and California
Environmental Quality Act (CEQA)
Surplus Land Act
• Does not apply
• Site continues to be used by the City to further open space and recreational purposes of the City
• Exempt
• Parcel donated to the City with Restrictions
California Environmental Quality Act (CEQA)
• Does not apply
• No change in use
Financial Impact to the General Fund
• 2022-2045
• Estimated Lease Revenue $55.8M
• 2022- 2045
• Transient Parking Tax Revenue
$2.9M
• Total estimated revenue $58.7M
Staff Recommendation
Adopt the resolution approving the new lease as it will:
• Clean up old text and reflects City Council negotiated terms
• Allows for an expected minimum revenue stream
• Requires building maintenance paid for by Castaway
and approved by the City
• Increases revenue during the existing lease term
(2022-2035)
• Generates additional revenue for extended lease term
(2035-2045)
Questions?
Simone McFarland
Assistant Director
[email protected]
(818) 238-5202