Administrative
Report
H.10., File # 22-3705 Meeting Date: 2/15/2022
To: MAYOR AND CITY COUNCIL
From: LAURIE KOIKE, ACTING DIRECTOR, WATERFRONT & ECONOMIC
DEVELOPMENT DEPARTMENT
TITLE
ADOPT BY TITLE ONLY RESOLUTION NO. CC-2202-005, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, LEASING CERTAIN PROPERTY TO SUPTAWEE, INC., DBA THE SHRIMP LOVER, A CALIFORNIA CORPORATION APPROVE THE LEASE WITH SUPTAWEE, INC., DBA THE SHRIMP LOVER FOR THE PREMISES OF 125 W. TORRANCE BLVD. FOR A MONTHLY AMOUNT OF $8,765.50 AND A TERM OF FEBRUARY 15, 2022 - FEBRUARY 14, 2027
EXECUTIVE SUMMARY
In March 2012, the City purchased the Pier Plaza leasehold and began the process of direct leasing to various tenants. Pier Plaza is comprised of several buildings totaling approximately 75,000 square feet of office and retail uses. The proposed restaurant lease with Suptawee, Inc., dba The Shrimp Lover is for space at 125. W. Torrance Boulevard. The lease area totals approximately 3,730 square feet.
The proposed lease is for 60 months with the City retaining the option to terminate the lease with a twelve (12) month prior written notice. Monthly minimum revenue to the City’s Harbor Uplands Fund will be the greater of $8,765.50 or 6.5% of gross sales for the first lease year. The base rent will increase 3% on the first anniversary date and each subsequent year thereafter. Percentage rent for the five-year term will begin at 6.5% and increase to 8.5% for the fifth year.
BACKGROUND
The Pier Plaza leasehold is comprised of buildings 103 to 131 West Torrance Boulevard (on the top level of the Pier Parking Structure) and totals approximately 75,000 square feet of space. The property is comprised almost entirely of office uses with the lone exception being a restaurant use of less than 4,000 square feet. The proposed lease with Suptawee, Inc., dba The Shrimp Lover (the “Tenant”) is for the space at 125 W. Torrance Boulevard (the “Premises”). The lease area totals approximately 3,730 square feet.
The Tenant, which specializes in seafood and Thai cuisine, opened in 2012 and has been operating on a month-to-month basis since the expiration of its most recent lease in November, 2020. The proposed Lease carries a sixty (60) month term with a monthly rent of $8,765.50 or approximately $2.35 per square foot, which is consistent with other Pier Plaza leases in the waterfront and broader market. The base rent will increase 3% on the first anniversary date and each subsequent year thereafter. The proposed percentage rent will start at 6.5% of gross sales for the first year and
H.10., File # 22-3705 Meeting Date: 2/15/2022
thereafter. The proposed percentage rent will start at 6.5% of gross sales for the first year and increase each year by 0.5%, which sets the percentage rent at 8.5% for the fifth year of the Lease.
The City retains the right to terminate the lease with a twelve-month written notice. The Lease will be personally guaranteed by Sineenait Klinmalai. Since The Shrimp Lover is currently operating in the Premises, the Tenant is taking the space as-is.
COORDINATION
The Waterfront and Economic Development Department collaborated with the City Attorney’s Office on this report. The City Attorney’s Office has approved the document as to form.
FISCAL IMPACT
Lease revenue from the property will accrue to the City’s Harbor Uplands Fund. The proposed lease will result in a minimum monthly rent of $8,765.50 with an annual total of $105,186. Over the fiveyear term of the lease, revenue to the Uplands Fund will be a minimum of $558,444.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
Resolution No. CC-2202-005
Lease Between the City of Redondo Beach and Suptawee, Inc. dba The Shrimp Lover The Shrimp Lover Lease (2015 - 2020)