Approval of Lease Agreement w/
California Roadhouse
Santa Monica City Council
April 28, 2026
Item 4-I
April 28, 2026
Item 4-I
April 28, 2026
Background
• After operating for more than 30 years on the Pier, in late 2024, the former Rusty’s Surf Ranch Restaurant closed
• Given the City’s ownership of the restaurant facility building, the City engaged a brokerage group in 2025 to identify a new operator for the former Rusty’s Surf Ranch location
• Through that assessment, the City received 9 separate proposals for consideration • Ultimately, the California Roadhouse concept was identified as the best fit for the Pier location
• Operator has managed other successful restaurant locations, including in Santa Monica • Roadhouse concept also includes the revival of a live music venue on the Pier Item 4-I
April 28, 2026
Item 4-I
April 28, 2026
Proposed Base Lease Terms
• Lease terms have been reached with the California Roadhouse operator, and include the following key provisions
• Useable Sq. Footage: 4,112 SF
• Monthly Rent: Base rent of $26,728 / month, increasing 3% per year • CAM Charge: $10.66 / square foot
• TI Allowance: $500,000 provided by City
• Add. Considerations: See below
• City to install ~$125,000 worth of building improvements, to include:
• HVAC system upgrades
• Repair of 8 doors, 1 gate, and 1 roof hatch
• Repair of porch deck
• Installation of ADA compliant counter
• City to provide waiver of ~$100,000 worth of lease costs, to include:
• Waiver of 2 months of rent
• Waiver of 2 months of CAM charges
• Waiver of rent costs associated with an extended patio Item 4-I
April 28, 2026
Item 4-I
April 28, 2026
Worker Protection Considerations
• In February 2026, the City adopted worker recall & retention regulations for hospitality businesses operating on the Pier with five or more employees
• Given that no business operation currently exists at the proposed California Roadhouse location, the City has negotiated lease terms that include worker protection provisions that largely mirror our recently enacted worker retention regulations
• Accordingly, for those employees who worked at the former Rusty’s Surf Ranch Restaurant when it closed in 2024, the following worker retention provisions will apply • No later than 90-days prior to the opening of the new California Roadhouse, a hiring window will open • Consistent with the City’s existing retention regulations, all former employees who apply for employment during the hiring window will be offered a position with the California Roadhouse • All former employees hired by the California Roadhouse will be retained for no less than 90 days • At the end of the 90-day period, the California Roadhouse will be required to provide each worker with a written performance evaluation
• For those employees who receive a satisfactory performance evaluation, lease terms will require the California Roadhouse to consider offering those workers with continued employment Item 4-I
April 28, 2026
Item 4-I
April 28, 2026
Staff Recommendation
• Staff recommends that City Council authorize the City Manager to negotiate and execute a Lease Agreement with California Roadhouse, Inc. for 256 Santa Monica Pier, pursuant to the terms outlined in the staff report.
Item 4-I
April 28, 2026
Item 4-I
April 28, 2026