DATE: November 5, 2025
TO: Honorable Mayor and City Councilmembers
FROM: Public Works Department
TITLE: PERCENTAGE PROPERTY LEASE AGREEMENT WITH GIVINO ROSSINI, DBA KETTLE ON COAST FOR THE PREMISES LOCATED AT 223 NORTH COAST HIGHWAY
RECOMMENDATION
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Staff recommends that the City Council approve a Percentage Property Lease Agreement with Givino Rossini, DBA Kettle on Coast, for the use of City-owned property located at 223 North Coast Highway, for a five-year term, with one five-year extension option, for the purpose of operating a bakery/restaurant for a five-year minimum total revenue of $462,000; and authorize the City Manager to execute the agreement upon receipt of all supporting documents.
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BACKGROUND AND ANALYSIS
The City and Petite Madeline Bakery entered into a lease agreement (“Petite Madeline”), dated April 21, 2010, which was amended by Amendment 1 dated March 16, 2016, Amendment 2 dated December 2, 2020, and Amendment 3 dated October 15, 2025 (“Existing Lease”), for lease of real property located at 223 North Coast Highway consisting of 2,355 square feet (“Premises”). Petite Madeline is a bakery/restaurant establishment in downtown Oceanside that has been owned and operated by Christine Loyola since 2010. Petite Madeline occupies a portion of the City-owned building containing suites 217, 219, and 223 (“Building”), in which the Oceanside Theatre Company occupies suites 217 and 219, which is the space south of Petite Madeline.
Christine Loyola and Givino Rossino have entered into a purchase agreement for the acquisition of Petite Madeline (“Purchase Agreement”). The Purchase Agreement is contingent upon assignment of the Existing Lease to Givino Rossini, DBA Kettle on Coast (“Lessee”). The parties therefore have requested that the City consent to assignment of the Existing Lease by Lessee, and by City’s approval of a new lease agreement, City would thereby consent to the assignment of the Existing Lease to Lessee, based upon the terms and conditions of the new lease agreement as set forth below.
At this time, Lessee has requested to enter into a percentage lease agreement for a 5-year term, with one 5-year extension option (“Agreement”). The Agreement, if approved, would replace the Existing Lease in its entirety, leaving the Existing Lease, on the effective date of the Agreement, of no further force and effect. The Purchase Agreement is contingent upon the approval by Council of the proposed Agreement between the City and Lessee, and the Agreement will only commence once the Purchase Agreement between Christine Loyola and Lessee has closed escrow (“Effective Date”). The Agreement stipulates that Lessee will have until June 30, 2026 to close escrow on the Purchase Agreement; otherwise, the Existing Lease with Petite Madeline will continue in effect.
Givino Rossini, as the new Lessee, owns and operates two bakery/restaurants in north county San Diego. If the proposed Agreement is approved by Council, Lessee’s new bakery/restaurant at the Premises will be renamed as “Kettle on Coast”. Lessee will use the Premises to serve food through a fully-operational kitchen and provide occasional live entertainment and activities. In doing so, Kettle on Coast aims to become a hub for culture and connection for Oceanside residents and visitors. Lessee has a proven track record of successfully operating bakery/restaurants since 2012 and Lessee’s qualifications were confirmed through staff’s verification of provided references and financial statements of prior operations at the Premises.
Kettle on Coast will be open seven days per week, with operating hours from 7am to 3pm. Lessee will provide an equal opportunity for the existing Petite Madeline employees and new applicants to interview for positions at Kettle on Coast.
Commencing on the Effective Date, Lessee would begin paying monthly minimum rent of $7,700 (“Minimum Rent”), and will pay the greater of Minimum Rent or six percent (6%) of total monthly gross income received (“Percentage Rent”). Minimum Rent will be adjusted annually based on the semi-annual Consumer Price Index (CPI), with a six percent maximum adjustment rate.
In addition, Lessee will assume responsibility and cost for all non-structural maintenance and repair of the Premises, including windows, awnings, and doors; however, City will be responsible for maintenance and/or replacement of any original/historic windows at the Premises. Lessee will be responsible for 100% of gas/electric costs on the Premises, as well as its pro rata share of the Building’s utility costs, which will include 45% of trash, 89% of water, and 80% of recycling expenses for the Building.
Upon commencement of the proposed Agreement, Lessee will close its business and operations to the public for up to two weeks in order to make improvements and repairs to the Premises to transition to its new business Kettle on Coast.
The proposed Agreement also provides for a potential rental abatement to Lessee if and when the Coast Highway Corridor Project moves forward, and in the event there are negative impacts to Lessee’s business and operations because of the project. Pursuant to the terms of the Agreement, the City Manager may administratively approve an agreed upon rental abatement for this purpose, if this becomes applicable.
FISCAL IMPACT
The proposed Agreement will result in a minimum total revenue in the amount of $462,000 over the five-year term, which will be deposited into account 1101.4351. There is no historical information to estimate the revenue to be received from Lessee related to Percentage Rent.
|
Description |
1st Year Annual Amount |
5-Year Minimum Revenue Amount |
Revenue Account |
|
Minimum Total Revenue |
$92,400 |
$462,000 |
1101.4351 |
COMMISSION OR COMMITTEE REPORT
Does not apply.
CITY ATTORNEY’S ANALYSIS
The referenced documents have been reviewed by the City Attorney and approved as to form.
Prepared by: Bryan Smithwick, Property Agent I
Reviewed by: Hamid Bahadori, Public Works Director
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. Staff Report
2. Agreement
3. Lease Calculation