Beach House owners ‘furious’ with city over electricity, rent

Owners ‘may bring in legal counsel’

The owners of the Beach House restaurant in a letter to the city manager dated Sept. 13 demanding a meeting to discuss three issues: the lack of installation of a permanent electrical panel for the business; city demand for payment of rent (and notice of default) and the city’s alleged refusal to take action on flooding.

The city manager wrote in an email that the property manager has advised the tenant that a meeting isn’t necessary.

In the last paragraph, the letter states that if the city and Beach House owners cannot meet in 72 hours the Beach House may have to bring in legal counsel.

The Sun requested comment from City Manager Jill Ingram, and courtesy copied Assistant City Manager Patrick Gallegos, and City Attorney Craig Steele. Ingram responded in a brief email sent Wednesday, Sept. 14, in which the city manager said there was no flooding or water intrusion to the restaurant property. Ingram’s reply said the Beach House is paying rent as they agreed to in the contract and that the electrical panel installation is continuing according to the terms of the contract. (See below for details.)

The Beach House letter

According to the letter, signed by Rosie Ritchie, the business owners are furious.

“The City agreed in Section 1.3 of the Lease dated March 12, 2018 to diligently bid and perform the Base Building Work, including installation and repair of electrical panels and breakers,” the letter said in part.

“In clear disregard of the lease terms, it has been 4 ½ years to the day and the City has still not provided a permanent electrical panel,” the letter said.

“SCE inspected the work performed by the City of Friday September 9, 2022, and found multiple deficiencies in the work which require modification before the work will pass SCE’s inspection,” according to the letter.

“I spoke with the SCE inspector, Jesse Carrasco, who expressed his frustration that the City’s work was non-compliant,” the letter said.

“He said that the City could have called him and asked for him to come out and observe the work in progress to make sure the City was on the right path but did not,” the letter said.

According to a Sept. 7, 2022, letter from Optima RMP, Incl, to City Manager Jill Ingram, Optima owner and president Mohamed Mamoun wrote “that electrical work is probably the most significant part of any construction project. In fact, the electrical feed to the beach house should have been installed prior to us starting construction.” (Editor’s note: Mamoun wrote the business name in small letters. The Sun is quoting the words as they were written.)

Mamoun’s letter asked that Ingram refrain from communicating with Optima staff and forward all questions to the Beach House.

According to the Beach House, the lack of electricity has stalled construction at the site of the future restaurant.

According to the Beach House letter, workers “have had to take turns using power tools so the power doesn’t go out.”

The letter says the city’s delay in providing electrical power have caused financial damages and continue to delay the opening of the restaurant.

“Second, the City demanded and has collected rent contrary to the terms of the First Amendment to the Lease,” Ritchie wrote. According to the Beach House letter, the amendment to the lease makes the rent due 120 days after the city government issues the building permit. “The building permit was issued by the City on March 3, 2022, meaning that the first rent payment would be due on July 3, 2022. Of course, we prepaid 3 months rent at the time we entered into the First Amendment to the Lease and should not be making our first new rent payment until October. Yet The Beach House has been forced to pay rent under protest since March, 2021,” according to the letter.

“In our last attempt to address the issue, the City, through the Property Manager, Andrea, said it was not ready to address the issue. That is not acceptable,” the letter said.

“Third, serious flooding occurred over the past week and we now have a lake adjacent to the restaurant,” said the letter in part.

“The City did not do anything to alleviate the problem. While pumps were placed all over town, including the south side of the pier, no action was taken to protect The Beach House. Planing Commissioner, Steve Miller, observed the lake and expressed that he did not understand why the City had not been pumping water to protect The Beach House,” the letter said.

“We need to meet immediately to come up. With a solution allowing The Beach House to open in the next 30 days,” the letter said.

In a Sept. 13 phone interview, Ritchie expressed frustration. “We’ve jumped through every hoop and they keep throwing roadblocks,” she said.

City manager response

“[T]he Beach House tenant continues to make required monthly payments per terms of the lease agreement they agreed to and signed and also approved by the City Council,” Ingram wrote.

“Second, the electrical panel installation on the property continues to move forward per the terms of the lease agreement and electrical services contract approved by the City Council, and also per the project timeline that has been communicated and discussed with the tenant multiple times,” Ingram wrote.

“Third, there was no flooding or water intrusion and no damage whatsoever to the restaurant property, as the tenant confirmed and communicated to the City’s property manager throughout the storm event as well,” Ingram wrote.

“In fact, as you know, the 1st Street beach area has not historically or typically been impacted by significant storms or high tide events, and in response to the high tide late last Thursday evening, the City installed a berm near the restaurant property in preparation for the predicted arrival of the Hurricane Kay storm on Friday evening,” Ingram wrote.

CBS on Sept. 9 and KTLA on Sept. 10, both reported Beach House owners Ritchie and Brian Kyle were concerned about flooding.  The CBS website said Kyle and Ritchie told the station that there was water and mud in the parking lot.

“Additionally, as the Seal Beach Police Department communicated to the community through multiple sources early last week, including a press release, emergency Nixle messages, several social media sources, and posted beach signage,  City crews provided free sand bags to residents and business owners at the City maintenance yard and the 8th Street beach lot to assist in protecting their homes and businesses,” Ingram wrote.

“The City’s property manager also reminded the tenant of this available resource as well, which the tenant utilized,” Ingram wrote.

Asked if the city would meet with the Beach House owners, Ingram wrote:

“[A]s with all of our other tenants in City-owned properties that are managed through our contract property manager on behalf of the City, if the property manager determines that a meeting with City staff is necessary, they will notify the City, and at this time the tenant has been advised by the property manager.