The subject Property consists of a vacant 1.864 acre site that was formerly occupied by the Black Angus Restaurant from 1988 through 2005.  The property was acquired by the Garden Grove Redevelopment Agency in July 2009, and with the Redevelopment Dissolution, the property was subsequently listed on the Long Range Property Management Plan and transferred to the City for future Civic Center needs.

In April 2017, the City received an unsolicited proposal from SteelCraft Long Beach, LP, for the development of an outdoor urban eatery built primarily out of recycled metal shipping containers.  The proposed project would be up to 14 users in shipping containers occupied by boutique eateries, brewery, wine vendor, micro retail space, incubator space, and communal eating areas throughout the project site. The development would illustrate SteelCraft’s values, which are restoration, the celebration of local craft and artisans, and community engagement.

The developer, Howard CDM, was formed in 1996 and has directed the development and construction of projects of up to $10,000,000 and a cumulative investment value nearing $1 billion.  Their team brings 45 years of experience in design, innovation, strategy and development.

The City’s economic consultant, Tierra West Advisors, conducted an economic analysis of the project.  The analysis consisted of a financial proforma of developer’s cost and revenue assumptions, review of land values in the region for similarly zoned properties, and public parking rates in the region in order to establish a land value and determine a land lease rate and terms of the lease agreement.

Negotiations have been finalized, and the proposed terms are summarized below:

• Ten-year term with up to four 5-year extensions (total of 20 additional years) to be exercised at the election of the tenant;

• 1.864 acre site; and
• Triple-net monthly lease payment of $8,120.00.

The City will receive net proceeds to the General Fund of $8,120.00 monthly or $97,440.00.  In addition, the anticipated future use of the Property is expected to generate additional property and sales tax revenues of approximately $85,000.00 annually to the City.

It is recommended that the City Council:

• Approve the Lease Agreement by and between the City of Garden Grove and StreelCraft Long Beach, LP for real property located at 12900 Euclid Street, Garden Grove, in the amount of $8,120 per month; and

• Authorize the City Manager to sign the Lease Agreement and make modifications as needed.

By:  Monica Covarrubias, Project Manager