Santa Monica's City Council voted 7-0 on Tuesday, Oct. 13 to put a local craft brewery in the long-vacant Rusty's Surf Ranch space on the Santa Monica Pier.

The deal with Santa Monica Brew Works would bring a surf-themed, fast-casual restaurant and the Pier's only dedicated live music venue to 256 Santa Monica Pier, according to Patch. The site has sat empty since Rusty's closed in December 2024.

Tentatively called "Surf Shack by Santa Monica Brew Works," the restaurant would occupy about 3,039 square feet of interior space and a 1,073-square-foot outdoor patio. Co-founder and CEO Scott Francis is a former music publishing executive, the Santa Monica Daily Press reported.

The unanimous vote authorizes City Manager Oliver Chi to negotiate and sign the lease. A final agreement has not been executed, and no opening date has been announced.

What the city pays

Santa Monica would contribute up to $750,000 for tenant improvements and separately cover roof, plumbing, electrical and HVAC repairs. The city would also waive permit and plan-check fees. Brew Works would pay $5 per square foot in monthly base rent, increasing 3% each year, on a five-year lease with two five-year extension options.

City officials estimate the deal would generate about $214,800 a year for the Pier Fund once rent begins.

Those terms are more generous to the operator than the earlier California Roadhouse proposal, which called for $6.50 per square foot and $625,000 in city-funded improvements. Chi told the council the Roadhouse deal would have produced roughly $325,000 a year for the Pier Fund after the first year, compared with about $215,000 under the Brew Works proposal.

Chi acknowledged the Brew Works arrangement is "a little bit more advantageous for the potential operator" but called it appropriate given the two years of delays surrounding the site.

Worker protections stay

The lease requires Brew Works to notify former Rusty's employees of a 30-day hiring window before opening and offer interviews to those who apply. Qualified applicants would receive written job offers based on staffing needs, followed by at least a 90-day introductory period.

The agreement also keeps the labor-peace clause that has been standard in Pier leases for decades. California Roadhouse had asked the city to remove that clause and sought changes to worker-retention provisions. Those requests, Chi said, did not match council direction. The city chose Roadhouse from nine proposals in April. Talks ended in late June.

"This is immutable; it's not proposed to be changed. It's proposed to remain," Chi said of the labor-peace requirement.

Council questions

Councilmember Ellis Raskin made the motion "with the understanding that the lease terms are substantively equivalent" to the city's worker recall and retention ordinances adopted in February. Mayor Caroline Torosis seconded.

Councilmember Lana Negrete said she had heard from local businesses asking why they could not compete for the space. Brew Works was selected through a provision in the city's Pier Leasing Guidelines that allows a direct proposal after notice to the Santa Monica Pier Corporation, rather than a competitive bid.

Asked by Councilmember Natalya Zernitskaya about the cost of rejecting the deal, Chi said the building would keep deteriorating. The opportunity cost "becomes harder and more expensive the longer we wait," he said.

No timeline for construction or opening has been set.