Administrative
Report
H.10., File # 22-5337 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-2301-006, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, LEASING CERTAIN PROPERTY
TO SO YEON GWON, AN INDIVIDUAL, DBA BOARDWALK CANDY
APPROVE A LEASE WITH SO YEON GWON, AN INDIVIDUAL, DBA BOARDWALK CANDY FOR THE PREMISES AT 124 INTERNATIONAL BOARDWALK FOR A MONTHLY AMOUNT OF $900 WITH AN ANNUAL 3% BASE RENT INCREASE FOR THE TERM JANUARY 17, 2023 THROUGH JANUARY 16, 2026
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 So Yeon Gwon, owner of Boardwalk Candy (Tenant), for the space at 124 International Boardwalk for approximately 400 rentable square feet. Boardwalk Candy has occupied this space since 2008 and has been operating on a month-to-month term since 2012.
The proposed lease would eliminate the month-to-month term in favor of a thirty-six (36) 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 $900, or 12% of gross sales.
BACKGROUND
Boardwalk Candy has occupied the space at 124 International Boardwalk since 2008 and has been operating on a month-to-month term since 2012. The space measures 400 square feet and will be accepted “as is” by the Tenant. The proposed lease carries a thirty-six month term with a minimum monthly rent of $900, 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, or 12% 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 So Yeon Gwon and a security deposit of $900 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
H.10., File # 22-5337 Meeting Date: 1/17/2023
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 $900 for the first lease year with an annual increase of 3% to the base rent. Over the three-year term of the lease, revenue to the Uplands Fund will be a minimum of $33,381.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Reso - No. CC-2301-006, Lease Certain Property to So Yeon Gwon dba Boardwalk Candy · Proposed Lease Between the City of Redondo Beach and So Yeon Gwon dba Boardwalk Candy
· Sublease Between International Boardwalk, LLC and So Yeon Gwon dba Boardwalk Candy, July 2, 2008