Santa Monica Council Will Weigh Brew Works Lease
The city will consider a new restaurant lease that drops prior labor mandates for the former Rusty's Surf Ranch space.
Updated on Oct. 13, 2026 in Remote Work
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The Santa Monica City Council will meet October 13, 2026, to discuss a proposed lease with Santa Monica Brew Works for the space previously occupied by Rusty's Surf Ranch. The deal arrives after a failed 2025 proposal involving California Roadhouse Inc. collapsed over labor provisions.
Why it matters
The proposal signifies a shift in city leasing strategy by removing worker retention mandates that previously caused a high-profile operator deal to collapse. This change alters the financial and operational risk profile for the city-owned pier property.
The city proposes a $750,000 tenant improvement allowance alongside $214,800 in expected first-year rent. The five-year lease term includes an annual rent escalator of 3% for the 3,039 square foot space.
The players
Santa Monica City Council
The local legislative body responsible for approving municipal lease agreements and setting city-wide labor policy.
Santa Monica Brew Works
An existing local brewery and restaurant operator that has maintained operations in the city since 2014.
California Roadhouse Inc.
A commercial operator that previously won a bid for the pier site but withdrew due to contested labor mandates.
Rusty's Surf Ranch
The former occupant of the 256 Santa Monica Pier space which ceased operations in early 2025.
The details
The city would assume responsibility for base building repairs, including roof, electrical, plumbing, HVAC, and fire systems. Unlike the prior deal with California Roadhouse Inc., this proposal excludes specific city-mandated worker recall and retention provisions. Brew Works would instead voluntarily interview former Rusty's Surf Ranch employees during a 30-day window before operations begin.
Timeline
2014: Santa Monica Brew Works began local operations.
February 2025: Rusty's Surf Ranch vacated the premises.
2025: California Roadhouse Inc. won the initial selection process.
October 13, 2026: City Council meets to review the Brew Works lease.
Market Landscape
The proposal follows the failed 2025 California Roadhouse deal, marking a departure from strict City Worker Protection Ordinance compliance requirements. The city is shifting its negotiation approach to prioritize property activation over labor retention mandates.
Operators in the city should track whether this removal of labor mandates sets a new precedent for municipal commercial leases. Monitor the October 13 session to see if the council's decision triggers a broader easing of retention requirements for city-owned properties.
The takeaway
The move suggests that municipal entities may be willing to soften labor requirements to fill vacant, high-profile commercial real estate. Operators should verify whether their current city lease negotiations are subject to the same worker recall mandates that this proposal explicitly omits.
Further reading
For broader trends in local commercial property management, read more in Remote Work.
Source note: This article includes information reported by Santa Monica Daily Press.
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