City Cements Rusty's Place on Santa Monica Pier

It faced the boot, but Rusty's Surf Ranch will stay on the through the fall of 2024.

As part of a new lease agreement approved unanimously Tuesday by the City Council, the restaurant will undergo a $500,000 remodel and expansion to include a new second-level of patio seating and mezzanine.  

Rusty's current lease expires in September 2014. The new agreement, at $200,000 per year, will be the last one signed for a space at the pier until 2020.

"There are very, very few opportunities to deal with longterm [retail] leases, on the pier," Pier Manager Rod Merl told the City Council. "The next lease available on this pier is 2020 and that's Santa Monica Sea Food... This is a very, very serious decision."

The council had the option to offer the space at 256 Santa Monica Pier to The Quintessential Group, the hip restaurant group behind The Happy Ending Bar and Restaurant in Hollywood and Black Market Liquor Bar in Studio City, and which tempted Santa Monica leaders with a gastropub/sports bar boasting a menu by Top Chef finalist Antonia Lofaso.

They weren't swayed.

"One of the things we do here in Santa Monica is honor our history, and Rusty’s is part of our history," said City Councilwoman Gleam Davis.

That's not to say, however, they were unimpressed.

"I’d like to see them come to town," councilman Robert Holbrook said of Quintessential. "There ought to be a space in Santa Monica for that type of operation as well."

Rusty's Surf Ranch has leased a space in the Billiard’s Building since 1994. (The other Billiard tenants include Santa Monica Pier Seafood and Al Mare, a new restaurant under construction that's scheduled to open in fall 2012.) In spite of the planned renovations, its concept—casual and affordable with live entertainment—will not change, its owner said.

"One of the places our family has always gone for a good time on the Pier is Rusty's," said longtime resident Tom Hall. "The pricing is right, the food is great and the events they have is exceptional."

On Tuesday, the City Council actually had the choice to expand its search beyond Rusty's and Quintessential with the help of a commercial broker.

Under its 2006 leasing guidelines, renewals and extensions are not offered to tenants; instead, when a lease expires, the city must open a competitive public recruitment process. In February, midway through a search for a tenant under the purview of the 2006 rules, the City Council amended its leasing guidelines to remove the requirement to issue "requests for proposals" in favor of practices more typical of commercial leasing, including using commercial brokers.

The panel evaluating tenants for Rusty's space looked at the new guidelines and recommended the council reopen its search:

While close, neither was able to completely meet (without conditions) the City’s economic floor of an annual $200,000 base rent with six percent of gross revenues in excess of base rent. While both operators, including the existing tenant, demonstrated strong operational qualifications and provided evidence of financial capacity to carry out their respective concepts, the evaluation committee did not want to ‘under sell’ this distinct opportunity on the Pier.

"Use the new procedure you approved earlier this year and see what there is," said Merl.

The council's response?

"It would have been great to have the [new] process in place," councilwoman Pam O'Connor. But "it would unfair to tell applicants to go back to the drawing board."

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