Help for harbor restaurant speeds opening
by Jason Dietrich
Joe's Crab Shack, the newest restaurant in the harbor area, plans to open Tuesday, June 13 or Wednesday June 14, according to Jeff Kantwell, Divisional Vice President of Development for Landry's Seafood Restaurants, the company that owns Joe's Crab Shack.
To help convince Landry's to open one of their seafood restaurants in the former Reuben's building in the harbor, the city agreed to contributed $200,000 to Landry's for the building's renovation.
"It's a requirement of the lease that they spend at least $800,000 of their own money. If they do, the city will chip in $200,000 for maintenance and repairs to the outside," said Tom Sudinsky, senior associate with Wald Realty Advisors, the company that negotiated the lease for Joe's Crab Shack.
Those funds could come in the form of a lump sum or rent refunds. Joe's Crab Shack is set to pay a base rent of $10,000 per month. As business improves, the rent will increase.
"We said we'd put in $200,000 for exterior improvements that the city would have had to do anyway. It facilitated them opening for business a bit earlier and it allowed one contractor to oversee the entire project instead of the city having to go out and get their own," Sudinsky said.
"That kind of expense is normal when you have an adverse business climate. If things are going well, then business want to come into your area," said Stephen Shoemaker, a harbor area businessman.
Harbor Properties Director Barry Kielsmeier compared the process to buying a house in need of repair. Typically either the price is reduced or the seller agrees to do the repairs as part of the bargain.
"It's not unusual to get contributions from the landlord that are directed to the construction. In this case the city owns the property," Kantwell said. Joe's Crab Shack has several other locations in Southern California and is looking at locations in Anaheim and San Francisco. The project in Redondo Beach so far has cost them about $1.1 million, before the city's rebate, said Kantwell.
"On the building itself there was quite a bit of rotten wood. We replaced that and put in a new gable entry in the front. It was all consistent with the Joe's Crab Shack look," said Kantwell.
But it hasn't always been so easy to get the city to approve Joe's signature "trade dress.' A monument sign, partly funded by the city, with a large arrow pointing toward the restaurant was shot down by the Harbor Commission.
"I felt we had abided by necessary codes and ordinances. The harbor commission's decisions were arbitrary and capricious. We worked with city and planning department to design a very attractive sign. It was about a $60,000 project split between the City, the Portofino hotel, and us. We did all the legwork and design. We felt like when they got what they needed they turned a blind eye to our needs and our trade dress," said Kantwell.
Ward Realty is working on marketing two other harbor properties, Sudinsky said.
Earlier this month the city council approved giving Home Depot Corporation
$1 million in redevelopment agency funds to open a Home Expo interior design
center near the South Bay Galleria Mall. The store is expected to generate $450,000
in sales tax revenue for the city by its fourth anniversary. If the Home Expo
center fails, the center will be required to repay a portion of the city's investment.
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