In perhaps the first true test of the city’s new leasing policies, Monterey City Council voted 3-2 in closed session April 29 to end negotiations for a new lease to Surfside Enterprises, Inc. for the city building at the foot of Wharf 2.
Mayor Clyde Roberson and Councilmember Ed Smith dissented.
Just three weeks earlier, on April 7, city staff had recommended the council approve new terms, which had tentatively been approved by the previous council. Their reasoning: Negotiations began in 2012, prior to the sweeping policy changes the new council ushered in March 17. The council instead continued the discussion to closed session.
The city of Monterey owns the land and the building, and leases it to Surfside. Surfside subleases it to London Bridge Pub and Sapporo Steakhouse. Surfside’s current 20-year lease is set to expire in 2018. Their offer to the city included raising the minimum rent from $45,000 to to $84,000 annually, as well the option to share in 50 percent of an “additional rent pool.”
Bill McCrone, a planning commissioner who’s been a vocal critic of the city’s leasing policies, said at the April 7 meeting the city was set to give Surfside at least 50 percent of the rent for a “management” contract. Surfside representatives Mike Zimmerman and Frank Donangelo emphasized the offer minimizes the city’s risk if the building goes vacant.
Zimmerman, meanwhile, says he’s not sure where the city’s heading in terms of its newfound leasing strategy. “There’s still three years left on the lease,” he adds. “There’s still time to figure this stuff out.”