The founder of California Roadhouse says the City of Santa Monica ended lease negotiations for a long-vacant Pier restaurant space without ever clarifying the labor provisions that became the deal's sticking point.
Sean Ahaus, who also owns Vito Restaurant in Santa Monica, published a letter in the Santa Monica Mirror on Monday, Aug. 17, stating his company "reached agreement with the City on every other material lease provision" for 256 Santa Monica Pier. The only unresolved issue, he wrote, was the city's refusal to define its Right to Recall and Labor Peace requirements before he signed a binding contract.
Ahaus said he learned the city had ended negotiations through newspaper articles, not through direct communication.
"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," Ahaus told the Santa Monica Lookout on June 22. "If I don't do this, there's a 99 percent chance I'll be sued by the union."
The space at 256 Santa Monica Pier has sat empty since Rusty's Surf Ranch closed in December 2024. California Roadhouse, a restaurant and live music venue that Ahaus said would create more than 50 jobs, was selected through a competitive process that drew more than 100 inquiries and nine proposals.
How the deal unraveled
The City Council unanimously approved Lease Agreement No. 11840 on April 28, including roughly $725,000 in tenant improvements, building repairs and waived rent. But at that same meeting, Councilmember Ellis Raskin proposed a last-minute amendment requiring that "terms of worker recall and retention be consistent with our ordinance," according to council minutes. The amendment passed 7-0 with no legal discussion.
City staff had advised the council that the recall and retention ordinance did not apply retroactively to California Roadhouse, which entered negotiations more than eight months before the ordinance was approved. Staff cited California case law rejecting retroactive application of ordinances that impose new liability for prior conduct.
Ahaus sent a letter June 14 threatening legal action and demanding the city preserve all communications with UNITE HERE Local 11, the hospitality workers' union. In a follow-up letter June 27, he asked officials to clarify 16 lease points. The city did not respond to either, according to the Lookout's reporting.
On July 8, the city announced it had ended negotiations. Officials said they asked Ahaus multiple times whether he would proceed on the council-approved terms, and he declined. The city said Ahaus repeatedly sought lease changes that would weaken worker protections in a manner inconsistent with the publicly approved terms.
Ahaus fires back
Ahaus disputes that account. In his Aug. 17 letter, he states California Roadhouse "has always been willing to offer employment opportunities to every former Rusty's Surf Ranch employee" and alleges he was "treated differently because of the views I expressed regarding certain City policies and the public officials who advocated them."
He called on the council to define its labor requirements publicly before offering any new Pier space for lease.
The city has not publicly responded to Ahaus's Aug. 17 letter. No response from UNITE HERE Local 11 has been found in available reporting.
What's next
The city said July 8 it would begin a new process to find a future operator for the space. The council's next regular meeting, originally scheduled for Aug. 25, was cancelled for summer recess. The next meeting date has not been confirmed.
