April 27, 2010 --The Planning Commission last week approved a conditional use permit (CUP) for building owner Promenade Gateway LLP to convert the Broadway Deli space into a retail spot with a smaller eatery in the corner. Not in the plans for the property is keeping open the deli that has stood there for 20 years. Promenade Gateway will soon begin marketing the site to potential new tenants.

The Broadway Deli’s lease expires at the end of May. General manager Marc Zeidler said Promenade Gateway wanted to triple the rent to about $150,000. Promenade Gateway asset manager Scott Blake said that is not true. He said an appraisal was done of the property, the results of which were presented to the Broadway Deli management.

Blake declined to reveal the appraisal results to The Lookout News. He said the Broadway Deli management, after seeing the appraisal, decided not to pursue a negotiation for a long-term lease renewal.
“There was no number discussed,” said Blake when asked about the alleged rent increase.

The Broadway Deli management signed a 90-day lease last week, and the restaurant will be on a month-to-month plan after that lease expires. Land use consultant Howard Robinson, who is working for Promenade Gateway, told the Planning Commission that the deli would remain open until renovations begin. It would be “four to nine months” before it would close.

Blake said the closure could come sooner than that because “they’ve made noises that it doesn’t make economic sense to stay.”

“The fact is they don’t make money at their current rent,” Blake said

Marc Zeidler declined to comment on the restaurant’s financial state and rumors that it might look for another home in Downtown Santa Monica. He advised contacting owner Marvin Zeidler, who has not returned numerous phone calls from The Lookout for comment on this situation during the past month.

Promenade Gateway’s plan is to create a 6,000-square-foot retail space stretching along Broadway.

The 2,600-square-foot restaurant would be located in a corner, with its entrance on the Third Street Promenade and the side stretching along a passageway, which would be enhanced and feature outside dining.

The building owner needed a CUP because the City code requires a restaurant along Broadway at the Promenade intersection. Had the CUP application been rejected, Blake said Promenade Gateway would still have gone ahead with the conversion project with the configurations adjusted so the CUP would no longer be necessary.

The vote to approve the permit was 5-1, with Commissioner Jay Johnson dissenting. He said the site could be reconfigured to bring in retail with a smaller version of the Broadway Deli remaining along Broadway. He said he was “very disturbed about this whole sequence of events” and that the Broadway Deli “was a real asset to our community, and I’m disturbed that it’s leaving simply as a function of having monumental rent increases. “

Johnson added putting a retail shop along Broadway would create a “boring street” with a “token food operation in the little corner” because there is already, in his opinion, too much retail there. “I think we’re hurting ourselves as a City, as a community,” Johnson said.