Administrative
Report
H.13., File # 22-5093 Meeting Date: 11/15/2022
To: MAYOR AND CITY COUNCIL
From: GREG KAPOVICH, WATERFRONT & ECONOMIC DEVELOPMENT DIRECTOR TITLE
ADOPT BY TITLE ONLY RESOLUTION NO. CC-2211-102, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, LEASING CERTAIN PROPERTY
TO EL BAJA CHEF, LLC
APPROVE A LEASE WITH EL BAJA CHEF, LLC FOR THE PREMISES AT 102 AND 104 INTERNATIONAL BOARDWALK FOR A MONTHLY AMOUNT OF $1,917 AND THE TERM NOVEMBER 15, 2022 THROUGH NOVEMBER 14, 2027
EXECUTIVE SUMMARY
In July 2012, the City purchased the International Boardwalk leasehold and began the process of direct leasing to various tenants. This leasehold includes a narrow linear development of approximately 17,200 square feet. The City has negotiated a proposed lease with the new ownership of El Baja Chef (Tenant) for the space at 102 International Boardwalk, which is approximately 775 rentable square feet, and the space at 104 International Boardwalk, which is approximately 77 rentable square feet for a total combined lease area of 852 square feet.
The proposed lease is for a five-year term with the City retaining the option to terminate the lease with a twelve (12) month prior written notice. Rental to the City’s Harbor Uplands Fund will amount to the greater of the minimum monthly rent of $1,917, or 10% of gross sales. Base rent will also increase by three percent on the first anniversary of the Commencement Date and annually thereafter.
BACKGROUND
In July 2012, the City purchased the International Boardwalk leasehold and began the process of entering into direct leases with various tenants. The International Boardwalk is comprised of a very narrow and linear development along the east side of the Redondo Beach Marina - also referred to as Basin III. The approximately 17,200 square feet of space is almost entirely occupied by retail and food and beverage uses.
El Baja Chef is a Mexican and Peruvian restaurant that opened on the International Boardwalk in 2014. It is currently owned and operated by Maria and Eswin Corado and operates on a month-tomonth term. In 2016, City Council approved the lease amendment that expanded the restaurant by 77 square feet and extended the term to 2021. The Corado’s are selling the business to Matthew S.
Jaime and Eladio L. Salas who have a combined 12 years of restaurant management and ownership experience and who will be the personal guarantors of the new lease. The proposed lease carries a
H.13., File # 22-5093 Meeting Date: 11/15/2022
experience and who will be the personal guarantors of the new lease. The proposed lease carries a five-year term with a minimum monthly rent amounting to $1,917, or approximately $2.25 per square foot, which is consistent with other similar retail/restaurant leases in the waterfront and broader market. The monthly rent paid to the City will be the greater of the base rent of $1,917 or 10% of gross sales. Base rent will also increase by three percent on the first anniversary of the Commencement Date and annually thereafter. Under the proposed lease, the Tenant accepts the property “as is” with no further cost to the City. The City will retain the right to terminate the lease with a twelve-month written notice.
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 $1,917 with an annual minimum of $23,004. Over the fiveyear term of the lease, revenue to the Uplands Fund will be a minimum of approximately $122,000.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Reso - No. CC-2211-102 Leasing Certain Property to El Baja Chef, LLC. · Lease Between the City of Redondo Beach and El Baja Chef, LLC . · First Amendment and Lease Between the City of Redondo Beach and Maria L.Corado dba El Baja Chef, March 31, 2016