By Nick Diamantides
Staff Writer
The Signal Hill City Council and Redevelopment Agency (RDA) is giving much needed assistance to a restaurant deemed vital to the city’s economy and image. During its meeting last Tuesday night, the Council, along with the RDA, voted to pay Delius’s rent for the next three years as the upscale eatery struggles to overcome the effects of declining sales due to the recession.
In a complex series of agreements approved Tuesday, the RDA will lease the site at 2951 Cherry Avenue for $60,000 a year for the next three years. The agency will then sublease the site to Delius at no cost. In addition, the RDA will provide $40,000 in utility reimbursements to the restaurant for up to three years.
City Manager Ken Farfsing stressed that providing the assistance was in keeping with the city’s Strategic Plan. He noted that in several surveys conducted during the last 15 years, residents strongly expressed their desire for upscale restaurants in the city. To comply with that desire, the Strategic Plan listed the goal of marketing the city as an upscale community with a diversified retail and business base.
Farfsing explained that Delius owners Louise and Dave Solzman relocated their restaurant from Long Beach to Signal Hill in 2007 to the former site of the Rib Restaurant, but the building required more than $1 million in renovations to make it suitable for an upscale eatery. “The restaurant renovation could have been considered for agency (RDA) assistance in 2007, since it would have implemented a key goal of the city’s Strategic Plan,” Farfsing said. “However, neither the land owner (Mitchell Land and Improvement Company) nor the Solzmans contacted the agency for assistance.”
Farfsing added that Mitchell Land contributed $450,000 towards the remodel and loaned Delius $361,044 for the project. The balance of the remodeling costs was funded by the contributions of dozens of individual investors.
“Delius agreed that it would make the loan payments, along with then-market rent, when the restaurant opened in 2007,” Farfsing said. “The restaurant was performing well until the current economic recession took hold in December 2008.”
Farfsing said the Solzmans asked for RDA assistance about six months ago because they were operating the restaurant at a loss. He noted that, upon inquiry, city staff discovered that in order to help the Solzmans, Mitchell Land had lowered the rent by 50 percent, deferred the construction debt, made the loan interest free and had provided other concessions as well. “The Solzmans had also taken several steps to reduce their operational costs, including laying off employees, doubling up on work activities and deferring their own compensation,” he said.
Farfsing noted that in spite of all those measures, the Solzmans’ losses were mounting and without RDA assistance the restaurant would almost certainly go out of business. “By assisting Delius, the agency is helping to fulfill the community’s desire for an upscale restaurant,” he said.
Councilman Larry Forester noted that city staff, Mitchell Land an the Solzmans worked very hard to iron out an agreement that was acceptable to all parties.
Councilman Mike Noll said that in spite of the fact that he was a fiscal conservative, he supported the agreement because it would be good for the city and enhance city revenues in the long run.
Vice Mayor Ed Wilson agreed. “There is a (twofold) image we are trying to portray for this city,” he said. “One is fiscal conservativeness and the other is the quality of life that Delius represents.” He added that the assistance accomplishes both of those goals.
The next meeting of the Signal Hill City Council is scheduled for 7pm on Feb. 16 in the Council Chambers of Signal Hill City Hall.
