Harbor Commission backs 3-month rent deferment for Breakwater restaurant during renovation

The Santa Barbara Harbor Commission voted unanimously Jan. 16 to recommend that City Council approve a three‑month rent deferment for the Breakwater restaurant while the tenant completes interior and exterior renovations.

Waterfront business manager Cesar Barrios told commissioners the owner plans interior upgrades, a new prep area in place of an old freezer and a relocated entrance on the east side of the building to improve public access. Barrios said the Breakwater lease covers a 4,053 square‑foot space at 107 Harbor Way and that the tenant took ownership in mid‑2024. "Because of the extensive nature of the repairs and the temporary closure of the restaurant, the owner is proposing a rent deferment to help manage their financial obligations during this time," Barrios said.

The waterfront department staff recommended a three‑month deferment beginning in February 2025 and running through the end of April. Barrios said the total base rent to be deferred for that period is $30,956; that amount will not be waived but will be amortized through the remainder of the lease (staff said the lease expires in December 2030) unless the tenant opts to pay the deferred amount up front. The recommendation will be implemented only if City Council approves a formal lease amendment.

Several commissioners questioned the department’s process for conveying leases to new owners and for vetting proposed tenant construction. Commissioner Peter Nelson said he supported the deferment but wanted clearer upfront information when a lease is conveyed: "When we convey a lease to a new owner…is there any way that before we do an approval like that, we can get a good idea of what the new tenant will do with the property?" Barrios replied that the department typically requires a business plan at conveyance and approves a proposal conceptually before tenants file building permits, but it did not require a full building plan or a reported renovation budget during the conveyance in this case.

Commissioner McCray moved the advisory recommendation to council; Commissioner Nelson seconded. Mr. Lopez read the recommendation. The commission vote was recorded as: Cohen — yes; Ford — yes; McCray — yes; Nelson — yes; Stedman — yes; Anderson — yes; Chair Stanwyck — yes. The motion passed unanimously.

Commission discussion included clarifications about amortization and percentage rent: Barrios said the amortized amount is added to the tenant’s monthly base rent schedule and that percentage rent (when applicable) is calculated from the established base rent. Commissioners also discussed the standard three‑month deferment practice, noting staff sometimes negotiates longer periods depending on the scale and timing of construction.

The Harbor Commission’s action is advisory; the deferment requires a lease amendment adopted by City Council. The staff presentation indicated permits to begin the renovation were expected within a month of the Jan. 16 meeting, and that the owner has the option to pay deferred rent up front to avoid amortization.