By Laurel Busby
Staff Writer
Gladstone’s, the iconic oceanfront restaurant at PCH and Sunset Boulevard, may be changing hands.
The Los Angeles County Department of Beaches and Harbors is seeking to negotiate a new concession agreement when the current one ends on Oct. 31.
Former L.A. Mayor Richard Riordan, who has operated Gladstone’s for the last 10 years and had a minority stake in the concession for the 10 years before that, is undecided as to whether he will seek a new concession agreement, but he would be open to continuing the current one until the county chooses the next iteration for the site.
“I think I’m willing to stay there until the county gets all the pieces together,” Riordan told the Palisades News. “We’ll have to look at everything and decide whether we want to bid. The county has been very good to us, and we’d like to be very good to the county”
The details of the county’s request for a proposal can be found at http://beaches.lacounty.gov/request-for-proposals/. The summary statement on the site states that the county “is seeking to negotiate a new, up to 50-year, concession agreement with a qualified and experienced proposer to develop, manage and operate a new restaurant or mixed-use facility.”
Proposers or their key personnel must also have at least 10 years of success with operating a high-volume restaurant rated at least three diamonds by the AAA restaurant guide, according to the request.
Last fiscal year (2015-16), Gladstone’s, a seafood restaurant with entrees hovering around $27-$30, earned $7,789,571 in gross receipts with $1,488,617 in rent to the county, according to the request. Gross receipts declined from the previous three years when annual gross receipts ranged from $8.8-$9.87 million with the county earning $1,765,000 in rent in each of those years.
The reduction in gross receipts meant Riordan and the county renegotiated the lease last year so that the county received 10 percent instead of 20 percent of the gross receipts, said Riordan, who also owns the Original Pantry restaurant in downtown L.A.
“We couldn’t make money on the 20 percent,” he said. “There are so many good restaurants in Santa Monica and around the Westside that weren’t there 20 years ago.” However, he added, “Gladstone’s is doing very well right now.”
Riordan said after owning one percent of the restaurant concession for 10 years, he then became the majority investor 10 years ago to keep Gladstone’s going. At the start of his investment in 1997, the county had raised the yearly rent by $603,000 to $1.75 million, and the contract also included $15,000 in annual maintenance costs. In addition, the 1997 concession agreement with Sea View Restaurants required $2.7 million in renovations.
In the new request for a proposal, the county requires at minimum an initial $100,000 from the contract date until a certificate of occupancy is established, and then $400,000 annually for 10 years, $960,000 annually for the 11th-15th years and a 10 percent increase every five years thereafter. Construction costs can offset 50 percent of the first 15 years’ rent, and the document also lists additional fees and receipt percentage requirements.
Throughout Riordan’s tenure, he said he enjoyed operating Gladstone’s, which has a staff who do the day-to-day work of running the business.
“I love it; it’s one of my babies,” said Rior- dan, who eats there at least twice a week. “I love the employees. I love the location. I love the food.”
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