Popular eatery closing after failing to reach lease agreement with city
A piece of Santa Barbara history will close its doors, after city officials decided not to renew the lease for the East Beach Grill restaurant on the waterfront.
The restaurant, located on the ground level of the Cabrillo Pavilion Bathhouse, has been a popular breakfast and lunch spot for locals and tourists for 33 years.
Francisco Aguilera has been working there most of his life. He started as a dishwasher, then became a cook and finally the proud owner in 2008. He said, “It was a little bit of luck and a lot of hard work.”
On December 31, Aguilera’s lease will be up and his business, or “his baby” as he refers to it, will shut down.
Aguilera has built a legion of devoted customers who are sad to see him go. “We are very disappointed. He’s one of our local heroes,” said Linda Brown. “We don’t feel that it has to be a ritzy restaurant that serves alcohol.”
The city is moving ahead with plans to renovate the event center, locker facility, staff offices, the gym and the restaurant inside the historic building at a cost of 15.7 million dollars. “Our goal is a modern social event center and a community accessible recreation center,” said Parks and Recreation Department Director Jill Zachary, who oversees operations. “We anticipate with all of the renovations that it will become a destination for residents and visitors.”
City Council asked Zachary to give Aguilera the first opportunity to develop a new lease agreement. Both sides hammered it out for more than 150 days, but ultimately the city rejected Aguilera’s offer.
The city wants to maintain a casual setting at the eatery, but also have it serve as a dinner destination with more of a “sit-down experience,” as Zachary referred to it. Zachary said the building needs to serve the public, but also create some revenue for the Parks and Recreation Department. Zachary said 65 percent of the department’s revenue comes from the city’s general fund with the rest coming from what the department generates. Aguilera said he was willing to renovate his kitchen, apply for a liquor license and stay open later. But, negotiations stalled when both the parties could not agree on terms of the rent.
“When the city and East Beach Grill were talking about financial terms, our proposal was based on what the city looks for in terms of percentage rent and a minimum guarantee rent,” Zachary said. “Essentially, it was no different from any other waterfront lease, and represented less than 10 percent of gross revenue proposed.”
Aguilera said he would have to double his rent payment each year. Aguilera said, “We don’t need another high end restaurant because most of them along the waterfront have failed or changed owners.”
One of Aguilera’s loyal customers, Leo Deamicis agreed, “He’s been the only successful restaurant in Santa Barbara that has returned money to the city council in its profitability. Yet, the city is turning around and wanting to move him out and bring somebody in here to run a dinner house rather than breakfast and that’s not much thanks for what he’s done for Santa Barbara.”
The negotiations and communication between Aguilera and city staff have largely ceased. Aguilera’s customers hope city officials change their minds. “In the end, the only thing that matters in life is relationships and we all have a relationship with Francisco that is longstanding and deep rooted,” said Brown.
“Everybody loves the way we have it,” Aguilera said. “If it’s been working for 33 years, why shouldn’t it work for the next 33 years more?”
Aguilera said he hopes a deal can still be reached. The city said the door is still open. It has opened a request for proposals, in which Aguilera can participate. The proposal window closes on July 17.
Construction on the bathhouse is slated to begin in January of 2018. City officials anticipate the project will be complete in 18 months, with the bathhouse only being closed for one summer season.
