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Commission OKs transfer of Pearl’s Deluxe Burgers operations to property owner under existing forgivable‑loan conditions
Summary
The commission approved staff‑recommended conditions allowing Pearl's Deluxe Burgers to transfer operations to the building owner while preserving the loan’s forgiveness schedule and program controls; the borrower remains liable until forgiveness conditions are met.
Staff told commissioners that Pearl's Deluxe Burgers received a forgivable tenant‑improvement loan under the former redevelopment agency's "6 on 6" program — a loan originally documented at $400,000 plus an additional $215,000 from the Central Market Cultural District loan fund — with provisions allowing a transfer of operations to the property owner under specific conditions. Christine Maher said staff interprets the transfer provision to permit the owner to step in and continue retail operations without triggering immediate repayment so long as program conditions are met, including continuous operation as a retail restaurant and rent limits consistent with the original program.
Owner Sylvia Yee, who spoke at the meeting, said 100 percent of the redevelopment funds were used for construction and build‑out including kitchen, HVAC, ADA entrances and restrooms, and that the business had been financially strained by limited evening foot traffic. Tracy Everwine of the Central Market Community Benefit District told commissioners she supported the proposed operator and said the new team knows the community.
John Chao, the proposed new operator (Little Griddle), said his plan emphasizes breakfast and lunch service and community space. Commissioners asked whether private investment was involved, whether rents would be changed and whether the loan forgiveness would be waived; staff said private investment existed, the borrower (Pearl's) would remain on the promissory note until the forgiveness schedule completes (four to five years), and the property owner has provided collateral to secure the loan in case repayment becomes due.
Staff noted program controls that limit rent increases and require the property to be continuously operated as retail for the loan to continue to be eligible for forgiveness; if the space closes before forgiveness is complete, repayment provisions can be enforced against the borrower or, if necessary, the property owner collateral. Commissioner debate included questions about whether the program's original goal — activating a catalytic retail corner — was being met; staff and several commissioners said continuous occupancy by a viable retail tenant advances that program goal.
A motion to approve the transfer under the staff‑recommended conditions passed on a roll call of 4 ayes, 1 absent.
