Administrative
Report
H.9., File # 22-5336 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-2301-005, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, LEASING CERTAIN PROPERTY TO JESSICA AYALA, AN INDIVIDUAL, DBA BOO’S TREASURES
APPROVE A LEASE WITH JESSICA AYALA, AN INDIVIDUAL, DBA BOO’S TREASURES FOR THE PREMISES AT 108 INTERNATIONAL BOARDWALK FOR A MONTHLY AMOUNT OF $2,025 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 Jessica Ayala, owner of a retail store called Boo’s Treasures (Tenant) for the space at 108 International Boardwalk. The size of the tenant space is approximately 900 rentable square feet and was previously utilized for a similar retail store called Mystical Joy.
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 $2,025, or 10% of gross sales.
BACKGROUND
Jessica Ayala is the current operator of Mermaid’s World, the gift shop located at 112 International Boardwalk, that specializes in hand-blown glass sculptures, seashell art and jewelry. Given the success of the shop, the Tenant desires to open up a second retail location named Boo’s Treasures at 108 International Boardwalk. The additional square footage will allow the Tenant to expand the variety of merchandise currently sold at Mermaid’s World. The Tenant has been in good standing since Mermaid’s World opened in July, 2021.
The space measures 900 square feet and will be accepted “as is” by the Tenant. The proposed lease carries a sixty month term with a minimum monthly rent of $2,025, or approximately $2.25 per square foot, which is consistent with other similar retail leases in the waterfront. The monthly rent paid to the City will be the greater of the minimum monthly rent of $2,025, 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 lease is personally guaranteed by the owner Jessica Ayala and a security deposit of $2,025 will
H.9., File # 22-5336 Meeting Date: 1/17/2023
The lease is personally guaranteed by the owner Jessica Ayala and a security deposit of $2,025 will be kept on file. The City retains 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 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 $2,025 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 $129,010.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Reso - No. CC-2301-005, Lease Certain Property to Jessica Ayala dba Boo’s Treasures · Proposed Lease Between the City of Redondo Beach and Jessica Ayala dba Boo’s Treasures