Administrative
Report
H.14., File # 23-6510 Meeting Date: 8/15/2023
To: MAYOR AND CITY COUNCIL
From: GREG KAPOVICH, WATERFRONT & ECONOMIC DEVELOPMENT DIRECTOR TITLE
ADOPT BY TITLE ONLY RESOLUTION NO. CC-2308-086, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF REDONDO BEACH, CALIFORNIA, LEASING CERTAIN PROPERTY TO REDONDO BEACH MARINA GROUP, LLC DBA CAPTAIN KIDD’S FISH MARKET AND
RESTAURANT
APPROVE THE LEASE WITH REDONDO BEACH MARINA GROUP, LLC DBA CAPTAIN KIDD’S FISH MARKET AND RESTAURANT FOR THE PREMISES AT 209 NORTH HARBOR DRIVE, REDONDO BEACH, CA FOR A MONTHLY MINIMUM RENT OF $16,000 AND THE TERM SEPTEMBER 1, 2023 THROUGH FEBRUARY 28, 2034
EXECUTIVE SUMMARY
In May 2014, the City completed its purchase of the Redondo Beach Marina leasehold, which includes stand-alone restaurants, a marina, a large surface parking lot, and a public boat hoist. The building at 209 N. Harbor Drive (“Premises”) has been occupied by Captain Kidd’s Fish Market and Restaurant for over 40 years. The total lease space is approximately 6,593 square feet.
The proposed lease is for a 10.5-year term for the period September 1, 2023 through February 28, 2034. Minimum monthly rent to the City’s Harbor Uplands Fund is $16,000, or the sum of eight percent of gross retail sales and two percent of wholesale market sales, whichever is greater.
BACKGROUND
In May 2014, the City reacquired the Master Lease for the Redondo Beach Marina from JJJ Enterprises Ltd. As part of that acquisition, the City of Redondo Beach (“the City”) became the Successor in Interest to the sublease with Harry and John Mills for the property located at 209 North Harbor Drive, which currently operates as Captain Kidd’s. In 2016, the remaining Sublessee, John Mills, assigned his interest in the Sublease to the Redondo Beach Marina Group, LLC dba Captain Kidds Fish Market and Restaurant.
An Amendment dated January 23, 1996 extended the Sublease to April 1, 2020 and also provided Capt. Kidds with an option to extend the term of the lease for an additional five (5 years). The sublessee submitted the lease option letter to the City of Redondo Beach on April 4, 2019, which extended the lease from April 1, 2020 to March 31, 2025. There are 18 months of term remaining on the current lease.
The tenant would like to continue operating the restaurant and has requested nine years of additional term beyond the 18 months currently remaining on the lease (10.5 years total). In exchange for the
H.14., File # 23-6510 Meeting Date: 8/15/2023
term beyond the 18 months currently remaining on the lease (10.5 years total). In exchange for the extended term, the tenant proposes building improvements to the interior and exterior of the building with an estimated cost of approximately $850,000. The planned improvements include roof work, exterior façade upgrades, new electrical lines, upgraded water/sewer lines, kitchen remodel, remodels to three bathrooms, upgraded dining room, renovated outdoor patio, new fish cases/tanks, and new signage. In addition, the tenant has agreed to increase the monthly minimum rent from $8,000 per month to $16,000 per month. If the sum of eight percent of gross retail sales and two percent of wholesale market sales exceeds the minimum monthly rent, then the City would receive the corresponding percentage rent.
Prior to any improvement work, the tenant will be required to obtain proper approvals/permits from the City, as well as any permits or licenses from other outside agencies, if necessary.
COORDINATION
The Waterfront and Economic Development Department cooperated with the City Attorney’s Office to prepare the lease document.
FISCAL IMPACT
Lease revenue from the property will accrue to the City’s Harbor Uplands Fund. Rent will begin on September 1, 2023 at a minimum rate of $16,000 per month, or the sum of eight percent of gross retail sales and two percent of wholesale market sales, whichever is greater. Over the 10.5-year term of the lease, revenue to the Uplands Fund will be a minimum of $2,016,000.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
Resolution No. CC-2308-086
Agreement with Redondo Beach Marina Group, LLC