The founder of California Roadhouse says Santa Monica officials killed a deal that would have brought more than 50 jobs and a live music venue to the Pier, and he's blaming the city for the impasse.

Sean Ahaus, who has spent more than a year negotiating to open a California-themed restaurant at 256 Santa Monica Pier, published a letter in the Santa Monica Mirror on Tuesday, July 14, directly challenging the city's account of why the project collapsed. The space has sat empty since Rusty's Surf Ranch closed in December 2024.

"The remaining obstacle is not financing, construction, or our willingness to move forward," Ahaus wrote. "It is an unresolved dispute over labor-related provisions in the City's proposed lease."

The city told a different story. In a statement on Tuesday, July 7, officials said they ended negotiations because Ahaus "repeatedly sought lease changes that would reduce the worker protections sought by the City in a manner inconsistent with the publicly approved lease terms." The city said it plans to begin a new search for a tenant.

What's in dispute

The conflict traces to the City Council's unanimous April 28 vote approving Lease Agreement No. 11840 with California Roadhouse. Councilmember Ellis Raskin introduced a last-minute amendment requiring that worker recall and retention terms match the city's ordinance. City staff had previously advised the council that the ordinance, introduced for first reading on January 27, did not legally apply to the Pier space.

Ahaus contends the labor provisions go beyond what a landlord can impose and intrude on employer-employee matters governed by state and federal law. In a June interview with the Santa Monica Lookout, he put it bluntly: "The bottom line is they're telling me who I have to hire, how long I have to keep them, who I can promote or not promote."

The city's position is that the council approved these terms publicly and the operator refused to accept them.

Months of unanswered requests

Ahaus wrote that he sought meetings with city officials for months without resolution. Records show he sent a letter to officials on June 27 listing 16 lease points for clarification. The city did not respond to the letter, the Santa Monica Lookout reported. One week later, on July 7, the city announced it was walking away.

Ahaus named Councilmember Lana Negrete as the only elected official who agreed to meet with him. Negrete has not publicly confirmed the meeting.

The economic stakes

The proposed lease included approximately $725,000 in city investment covering tenant improvements, building repairs, and waived rent. The space drew more than 100 inquiries and nine competing proposals before the city selected California Roadhouse.

About 30 workers lost jobs when Rusty's closed amid a UNITE HERE Local 11 organizing drive. Ahaus has alleged the union exerted improper influence over the lease terms, claiming a union representative stated at a December 19, 2025 meeting that the city had agreed to block any lease unless the company hired the entire displaced Rusty's workforce. Neither the city nor UNITE HERE Local 11 has publicly addressed the claim.

What happens next

The city has not announced a timeline or RFP date for selecting a new operator. Ahaus wrote that California Roadhouse "remains prepared to sign a lawful lease immediately." No city official has publicly responded to his July 14 letter.