At the January 10, 2017 Oakley City Council meeting, the City Council will vote on a resolution to execute a termination agreement and deed in Lieu of foreclosure with the owners of Carpaccio’s restaurant. Later in the meeting, they will vote on a new tenant.
According to the Staff Report, Carpaccio’s is set to close on February 15, 2017 in an agreement with the city.
The city says the restaurant was constructed in 2013 (3070 Main St, Oakley) and has had periods of profitability, but also low periods of sales. In 2015, the City even assisted the restaurant owner/operator, Manuel Munoz, by hiring a consultant to identify ways to increase efficiency, sales and profitability. In 2016, Mr. Munoz approached the City to discuss termination of his agreement and a closing date.
The Termination Agreement acknowledges that the City and Mr. Munoz (Operator) wish to terminate the duties and obligations set forth in the agreements made between both parties as a result of the building being constructed and occupied by Carpaccio’s.
The agreement contains the following main provisions:
• Operator forfeits all payments made toward the loan
• Operator will cease operations no later than February 15th, 2017
• Operator will pay the City rent of $5,000 per month for the months of November, 2016 through February, 2017
• Operator will sign a Deed in Lieu of Foreclosure
• Operator may not sell the business without the written consent of the City
• The City and the Operator release and forgive each other under all obligations set forth in the Promissory Notes, Loan Agreements and Development and Disposition Agreements
• The Operator and the City shall compile and agree upon a list of equipment/fixtures owned by both parties and the Operator shall not remove any items owned by the City.
Oakley City Council to Select New Tenant
After the City agrees to terminate the lease with Carpaccio’s, Dwayne Dalman, the Economic Development Manager for Oakley will present the city council with three potential new tenants.
The new tenant will take a similar deal to what happened with Republic of Cake who was replaced by Mr. Pickles. The City has narrowed down the interest list and received formal proposals from three experienced restaurant operators.
Buon Appetito currently has two Italian restaurants, one in Hayward and the other in Benicia. The operator has extensive restaurant experience, starting his career at II Fornio and then opening an Italian restaurant (Mangia Bene) in Martinez. The operator lives in East County and has already been looking to locate an Italian restaurant in this area. A review of the operators financial statements and tax returns show strong profitability for the last three years. The proposal from this operator would be for an Italian restaurant that has a similar menu as the existing Buon Appetite restaurants, which feature homemade pastas and fresh ingredients. This operator would use the downstairs as a restaurant and the upstairs as an event space, and be open for lunch and dinner. Buon Appetite would offer a seamless transition with a similar Italian restaurant concept and a short turn-around time between Carpaccio’s closing and this restaurant opening. They are also in agreement with the proposed lease terms.
The second Italian restaurant proposal is from a restaurant owner who currently owns and operates La Veranda in Pittsburg. This operator also has extensive restaurant experience, having been a part of the opening of the first La Veranda in Clayton in 2002.
The proposed menu offerings would be similar to La Veranda in Pittsburg. This operator would also use the downstairs as a restaurant and the upstairs as an event space, and be open for lunch and dinner. This proposal did not include financial statements or tax returns, as the owner would prefer to provide these as a condition of approval. This proposal would require more extensive negotiations with the City, as the owner is looking for rent waivers and reductions, as well as tenant improvement concessions. If negotiations were successful, this concept would also be a seamless transition with a short turn-around time between Carpaccio’s closing and their restaurant opening.
Gabv’s Bar & Grill
The third proposal is from an operator that has owned and operated La Strada Italian restaurant in San Pablo for 20 years. The operator has a partner that has owned and operated the Union Hotel and Restaurant & Bar in Benicia for 18 years. Though the partners both have experience operating Italian restaurants, they have proposed a bar & grill concept for this location. They believe a strong bar and grill would be popular and successful in Oakley. This proposal includes approximately $100,000 to $150,000 in modifications to the space that would be funded by the operators. They wish to make three changes as follows:
- Sports Bar- They propose to change the bar area to a sports bar theme, by adding TV screens and by removing the wine bottle wall by the bar to expand the bar area.
- Ground-floor patio – They propose to enclose the ground-floor outdoor patio with an overhead awning and tent-like walls, similar to the Dead Fish restaurant in Crocket.
- 2nct Floor-They propose to use the second floor for events and parties, but plan to add an elevated stage to accommodate live music and acts. They also propose to remove the upstairs bar and replace it with a portable bar located at the top of the stairs. It is anticipated that the remodeling under this proposal would take approximately six to eight weeks, If this proposal were approved, they would immediately start up a marketing and outreach program.
As opposed to the other two proposals, Gaby’s Bar & Grill would only be open for a happy hour and dinner at the start (not lunch). In addition, they are proposing free rent for four months on the ground floor and for one year on the second floor. Their proposal included financial statements and tax returns for two years, which showed profitability for both years.
The city of Oakley Staff, upon review of the proposals, feels that Buon Appetite offers the most seamless transition, is most suited for the space, and is a strong, experienced operator.
If you Go:
January 10, 2017
Oakley City Hall Chambers
3231 Main St, Oakley, CA