Two of Seaport Village’s longstanding restaurants are set to exit the waterfront retail center next year with newcomer brands selected to reinvigorate the center’s marquee dining venues.
Tuesday, the Port of San Diego OK’d 10-year leases with two new-to-San-Diego, anchor operators: WildThyme Restaurant Group and Gladstone’s.
WildThyme will bring its California coastal-inspired restaurant concept Shorebird to the Pier Cafe venue, which is a 2,272 square foot, two-story structure that sits directly over the bay. Gladstone’s, a Malibu restaurant, will move into Edgewater Grill’s 9,684 square-foot, highly visible space alongside the promenade. Both eateries are expected to open in late 2022.
“These are celebrated tenants. … These truly are the kind of tenants you see in the very best areas,” said Port Commissioner Dan Malcolm, referencing the entire lineup of operators that the agency has secured since taking over the facility from Terramar Retail Centers three years ago. “The Port of San Diego does not have a history with managing properties like this. In fact, this is the first time we’ve done this. We’ve had many, many naysayers. … I think that this shows that we definitely have the talent and the people equipped to do this kind of thing.”
Opened in 1980, Seaport Village consists of 90,000 square feet of specialty retailers and restaurants on a 14-acre site at 849 West Harbor Drive. In 2018, the San Diego Unified Port District took over the operation of Seaport Village. It has since spent nearly $8 million improving the coastal tourist destination. The revival effort includes a leasing strategy designed to attract trendier restaurant concepts and stores.
The refreshed tenant roster includes Mike Hess Brewing, Mr. Moto Pizza, Louisiana Charlie’s, Zytoun Gourmet Mediterranean, Malibu Farm and Crack Taco, although some of the newcomers won’t open their doors for several months.
Meanwhile, developer 1HWY1 is working to secure the board’s approval on a $2.5 billion mega-project that would redevelop the entire Central Embarcadero region that includes the outdoor retail center. The firm has until the end of the year to submit a final project description. The developer has said previously that it expects to break ground in 2024 to 2025.
Shorebird is expected to offer patrons a “first-class” dining experience, with the venue featuring a rotisserie, fresh fish, sushi and a full bar, according to a port staff report on the negotiated agreements. Per the negotiated lease, WildThyme will pay minimum annual rent of $204,408 in year one. Its rent will increase annually, and the operator is on the hook for percentage rent, meaning it will be charged 6 percent of gross sales over $3.4 million in each year. In exchange, the port will give Shorebird a $227,500 allowance for venue improvements, although the operator must spend a minimum of $750,000 on upgrades to the over-the-water restaurant.
Gladstone’s at Seaport Village will be the San Diego extension of the original Malibu beachside restaurant, founded in 1972, and will serve the brand’s classic seafood dishes. Annual rent payments start at $338,940 with a 6 percent fee that kicks in after $5.6 million in gross sales. The lease with Gladstone’s includes an improvement allowance of nearly $1.3 million, but requires the operator spend at least $2.3 million.
Together, after subtracting improvement allowances and broker fees, the port expects to collect $3.7 million in net revenue over the lifetime of the 10-year leases. However, both operators are entitled to fees — as much as $100,000 for Shorebird and $750,000 for Gladstone’s — should the port elect to terminate their leases early, starting in year six, to accommodate the redevelopment effort.
Pier Cafe and Edgewater Grill are owned by Water View Restaurants. The operator, which has done business at Seaport Village since it opened, recently signed short-term leases for both venues, meaning the familiar restaurants are expected to remain open through the spring of next year or until the replacements secure permits.