Administrative
Report
H.6., File # 22-5288 Meeting Date: 1/17/2023
To: MAYOR AND CITY COUNCIL
From: GREG KAPOVICH, WATERFRONT & ECONOMIC DEVELOPMENT DIRECTOR TITLE
ADOPT BY TITLE ONLY RESOLUTION NO. CC-2301-002, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, LEASING CERTAIN PROPERTY TO BARLEY VIBES, LLC.
APPROVE A LEASE WITH BARLEY VIBES, LLC., DBA BARLEY VIBES, FOR THE PREMISES AT 136 INTERNATIONAL BOARDWALK FOR A MONTHLY AMOUNT OF $2,925 WITH AN ANNUAL 3% BASE RENT INCREASE FOR THE TERM JANUARY 17, 2023 THROUGH JANUARY 16, 2028
EXECUTIVE SUMMARY
In July 2012, the City purchased the International Boardwalk leasehold and began the process of direct leasing to various tenants. The International Boardwalk is comprised of a narrow linear development of approximately 17,200 square feet that is fronted by a public walkway. The City has negotiated a new lease with Barley Vibes, LLC. dba Barley Vibes (Tenant) for the space at 136 International Boardwalk to accommodate a 300 square-foot expansion of the existing tenant space.
The current space measures 1,000 square feet in size and the new expanded size of the tenant space is approximately 1,300 rentable square feet.
The proposed lease is for a sixty (60) month 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 is the greater of the minimum monthly rent of $2,925, or 10% of gross sales.
BACKGROUND
The current Barley Vibes lease for 136 International Boardwalk has been in place since September 2021 with the current term running through November 2026. The current space measures 1,000 square feet in size and will be increased to approximately 1,300 square feet due to the downsizing of a neighboring tenant space occupied by JP Security Products, Inc. at space 134. Barley Vibes specializes in classic American food, such as made-to-order sandwiches, hamburgers, small-batch craft beer and wine and features live music. Barley Vibes is owned by Joe Smith, who will be the personal guarantor of the lease. The proposed new lease, which will supersede the existing lease, carries a sixty-month term with a minimum monthly rent of $2,925, or approximately $2.25 per square foot. The price per square foot remains unchanged from the existing lease. This new proposed lease is to accommodate for the increased size of the space. The monthly rent paid to the City will be the greater of the minimum monthly rent of $2,925, or 10% of gross sales. The minimum monthly rent increases by 3% on the anniversary date for each year the lease remains in effect. The City retains the right to terminate the lease with a twelve-month written notice.
H.6., File # 22-5288 Meeting Date: 1/17/2023
Public Hearing: Exemption, Declaration, Conditional Use Permit and Coastal Development Permit
Pursuant to the municipal code, a Conditional Use Permit (CUP) is required to serve alcohol. The proposed expansion of the tenant space triggered the requirement to seek a new Conditional Use Permit at 136 International Boardwalk. The public hearing to consider the CUP and associated Coastal Development Permit (CDP) was held at the November 14, 2022 meeting of the Harbor Commission. The discussion was led by Antonio Gardea, a Senior Planner for the City. After careful deliberation, the Harbor Commission voted unanimously to approve the Barley Vibes CUP and CDP at 136 International Boardwalk. There were no appeals received during the 10-day appeal period and the Conditional Use Permit is considered finalized. The Coastal Commission appeal period for the approved Coastal Development Permit ended on December 17, 2022 with no appeals received.
Under the lease, Tenant accepts the property “as is” and will be responsible for the relocation of the interior non-loadbearing wall. At the Harbor Commission public hearing, the owners of Barley Vibes noted that they plan to make future improvements to the expanded storefront by taking advantage of the International Boardwalk Storefront Improvement Program.
COORDINATION
The Waterfront and Economic Development Department collaborated with the City Attorney’s Office on the preparation of the lease. 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 $2,925 for the first lease year with an annual increase of 3% to the base rent. Over the five-year term of the lease, revenue to the Uplands Fund will be a minimum of $186,349.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Reso - No. CC-2301-002, Lease Certain Property to Barley Vibes, LLC · Proposed Lease Between the City of Redondo Beach and Barley Vibes, LLC · Existing Lease Between the City of Redondo Beach and Barley Vibes Brewing, September 2021
· Reso - #2022-11-HCR-03 Harbor Commission Resolution, November 14, 2022 · Administrative Report - Harbor Commission CUP Evaluation, November 14, 2022 · Minutes - Harbor Commission Meeting, November 14, 2022