On the same night they cut $6.5 million from the city’s general fund budget, Walnut Creek City Council members on Tuesday approved pursuing a 10-year lease, with two five-year options, for the Mexican restaurant Los Moles to occupy the ground floor of the city-owned South Locust Parking Garage.
The lease could eventually cost the city more than $627,000. Part of the council’s approval of this lease was a transfer of $377,000 from various budgets to the city’s capital budget for use toward the restaurant.
Some council members said they view the expense as a long-term investment in Walnut Creek’s downtown in general, and in its restaurant community specifically. And because the city owns the garage and its ground-floor commercial space, council members said Tuesday night’s approval reflects the action of a responsible landlord to rid downtown of a vacant storefront.
“We know this is a challenge,” Mayor Pro Tem Kevin Wilk said about spending the money. “Sometimes it is (about) biting the bullet. But let’s invest in our community … and support these businesses.”
The retail space located at 1352 Locust St. It was last occupied by Tender Greens, a restaurant that closed in June 2018.
Base rent for Los Moles would be $15,937.50 per month, increasing 10 percent every five years. In response to the challenges related to the COVID-19 pandemic, the city and Los Moles negotiated a 20 percent rent reduction each month that Los Moles’ gross sales are less than $200,000 for the first two years of the lease.
The city has agreed to provide an eventual $438,000 in tenant improvement allowance and funding repairs for the space’s grease trap. The city’s total expenses, including real estate broker commission, come to about $627,750.
Councilman Justin Wedel did not support the lease agreement for Los Moles, saying it was inappropriate for the city to commit that much money to a commercial project when the council would, an hour later, make $6.5 million in budget cuts because of COVID-19-related drops in revenue.
Wedel also said there already are at least three other Mexican restaurants near the South Locust Parking Garage.
Councilwoman Cindy Silva countered that all restaurants have different audiences and business situations, and that the existence of three other Mexican restaurants shouldn’t dictate whether Los Moles is allowed to take over that space.
“I think we would be completely short-sighted not to be investing in economic recovery,” Silva said.
The lease was approved by a 3-1 vote, with Silva, Wilk and Matt Francois voting “yes.” Wedel voted “no;” Mayor Loella Haskew recused herself from the vote, citing an unspecified potential conflict of interest.
$16K per month to operate your restaurant in Creektown. No wonder burgers are $18 each. Says a lot about the value of a dollar in 2020. Back in 1966, Dairy Belle on Oak Park had 5 burgers for a buck. Shows you where we are today.
You have to sell a lot of burritos to support that real estate expense. This space lends itself to a restaurant with more significant gross profit. Small plates, expensive deserts, top shelf cocktails etc. Further, patrons have to brave a parking garage, and to do that, meals have to be a 1 1/2-2 hour event. Kind of a Walnut Creek thing.
Am I the only one who finds it absurd that the city is directly funding a single business?!?! Where’s the connection? Which city council member is related to the owner?
Just feels really gross.
The way it is worded it is vague on what they are doing the improvements. But one thing is the grease trap. Which would be a requirement under health/building code. So it’s possible it’s not as much for the tenant as needs to be done for any tenant.
I smell that too Bob foo… something is amiss here
Cindy Silva sounds like one huge dope. At least three other Mexican restaurants to eat at in the same area isn’t enough for her.
The city subsidizes a lot of businesses.
Sad, in the same meeting about making cuts, they continue to spend, spend, spend.
How much did the city council commit to spending on the current facelift at the Lesher?
My tax preparer explained a lot about depreciation to me with my buildings.
“ Wedel also said there already are at least three other Mexican restaurants near the South Locust Parking Garage.”
Wedel, why open a Mexican restaurant when there’s at least three other Mexican restaurants nearby? Idk, maybe because there’s a thing called supply & demand. VIVA MEXICO !!!
Two questions: Who does this business know? or What does this business know?
you left out a question… and when did this business know it…
Admittedly I’m not the sharpest knife in the chandelier but I’ve read this twice and I can’t figure it out. Who owns this building and who is paying who? And why?
If someone understands this and can explain it with little words I’d appreciate it.
Thank you
The City owns the land, parking garage and is the landlord for the two ground-level retail tenant spaces including Bier Haus. Mole will pay rent to the City. Now go back and read the story.
The Mexican restaurant will be paying the lease, but first, the city of WC will spend $400,000+ (our tax dollars) for building improvements plus an additional ~$200,000 on real estate broker fees and whatever other nonsense they’ve agreed to.
Time to audit Walnut Creek’s swindlers
And what is the Mayors connection to this restaurant.
Any journo care to ask the tough question?
Is the city council insane? What a major insult to those three existing Mexican Restaurants who have been paying high rents and taxes all these years. No sweet deal for them huh, at taxpayers expense???
Standard WC. What Cindy wants Cindy gets. And we will never find out what’s behind it all.
Jojo, you are 100% correct. Silva is a stain on Walnut Creek. A stain that won’t go away.
She has threatened many people, including a City Attorney.
If you cross her watch your back!
People are forgetting that it is not real money, it’s tax money.
Speaking of real money.
Anyone remember the four kiosks the city bought for $120,000.
They were short lived at Liberty Plaza.
Waste of money, again.
Would be a down payment on a home for a Walnut Creek citizen.
But mice nuts to the city.
He has restaurants in San Rafael, El Cerrito and Emeryville. Maybey Walnut Creek thinks Los Moles will bring millions of dollars of business to them.
That is pretty high improvement cost. Shopping centers would probably give you half that amount. In someways I feel for businesses that are not that big, paying that much rent though. Cost of food, insurance, taxes, help, and rent there is not much left.
Wilk and Silva were two of the four (Hoffmeister of Concord, and Pierce of Clayton complete the quad) who endorsed and urged a “Yes” vote on the sales tax increase to fund Measure J which was on the ballot last March. Fortunately, it was roundly defeated.
Under the guise of transportation improvement, it proposed increasing sales tax to collect money that would do absolutely nothing to ease the commute in the County. It was intended instead to increase public transit and allocated a large amount of money to BART and buses. The measure was nothing but spendthrift.
Remember these names, however, the next time they come up for re-election and vote them out. They don’t care how they get the funds they want just as long as they get them.
The money is not coming out of their own pockets, and there is zero accountability for potentially bad and costly decisions made by them. In a nutshell, that’s so-called government leadership.
I’ve eaten at all those three restaurants. The best by far is Walnut Creek Tacos. But even for them prices, I much rather go to Concord, where the food is more authentic. From the sound of it, this City is bound to end up like the City of El Cerrito, filing for bankruptcy.
I hope this does not become a trend!!!
You guys are a hoot. Every time I read of a restaurant closure on this site you all complain about greedy landlords. Now, if a landlord actually works with a tenant to get rid of an empty store front, of course you complain as well. Seems like you’re only happy if you can complain.
But, Joe, the City council should not be giving out sweet deals to some and not others.
Why is the mayor recusing herself? That in itself should raise a red flag.
But in typical fashion, the good ol girls and boys club gets what they want. Sad, but true.
And I am not complaining, just asking for the truth.
We’re you on the arts commission?
So you would have preferred to see an empty store front where Tender Greens used to be? What other restaurants are in buildings owned by the City of Walnut Creek? Have they approached the City to modify their lease agreements and have been turned down? Or what do you mean by giving sweet deals to some and not others?
I believe the article state that the Mayor had a potential conflict of interest in this matter and thus excused herself. Would you prefer that city officials with conflict of interest don’t excuse themselves? Why would avoiding a conflict of interest raise a red flag?
So what would have been the right thing to do in your world?
Great timing, WC. Just the moment to invest in a restaurant. Genius.
First two terms of elected office = “Public Servant”
Three+ terms of elected office = “Public Whore”
TERM LIMITS desperately needed, from city hall to the US Senate. Join the movement and DON’T re-elect incumbents.
Interesting how the City of WC makes this a priority rather than help the other business tenants nearby. As a local business owner there is a “massage” business nearby that continues to stay open during these times and seems to only cater to men. Seems very suspicious but the city will not do anything about this. This affects many businesses nearby but the city turns a blind eye.