The Santa Monica City Council meets Tuesday with a packed agenda that includes a long-delayed vote on a new tenant for the former Rusty's Surf Ranch space on the pier, closed-session negotiations tied to the 2028 Los Angeles Olympics and a first look at how the city plans to respond to a sweeping new state transit-oriented housing law.
Rusty's Replacement Finally Up for a Vote
Six months after California Roadhouse, Inc. was selected as the preferred tenant for 256 Santa Monica Pier, the council is set to vote on a formal lease agreement — if the deal holds together long enough to reach the dais.
The city launched a competitive selection process that drew more than 100 inquiries and nine formal proposals before narrowing the field to five finalists. California Roadhouse owner Sean Ahaus won out over four competitors, including Mixue, with a concept centered on live music and casual American dining that would include vegan options.
Under the proposed five-year lease, which includes a five-year extension option, the tenant would pay approximately $26,728 per month following a 60-day rent-free period, plus common area maintenance charges. The city has agreed to contribute up to $500,000 toward kitchen, stage, sound, and infrastructure upgrades — improvements that would revert to city ownership at the end of the lease — along with an estimated $125,000 in additional city-funded improvements and a roughly $100,000 rental waiver. The city projects the arrangement will generate approximately $325,000 annually in Pier Fund revenue.
California Roadhouse has committed to live music programming from opening day and plans to partner with School of Rock for youth performances. The lease also includes worker retention provisions that would give former Rusty's employees a structured path to rehire.
The vote comes after a turbulent stretch that has tested Ahaus's patience and his finances. A scheduled March 24 council vote was pulled without explanation after Unite Here Local 11 secured an emergency meeting with city staff in the days beforehand. Though the union's initial concerns about labor ordinance compliance ultimately proved inapplicable to the deal, the intervention pushed the item into closed-session negotiations over price and terms. Ahaus said the months-long delay has drained his financing and cost him key staff members.
Olympic Closed Sessions
The council will also convene closed-session talks under California Government Code Section 54956.8 covering five separate license negotiations connected to the 2028 Olympics and entertainment programming, with City Manager Oliver Chi serving as the city's negotiator in each.
The sessions involve a wide range of venues and parties. The U.S. Olympic and Paralympic Committee is in discussions over use of 200 Santa Monica Pier and an approximately 85,000-square-foot sand area stretching south of the pier to Acadia Terrace and several adjacent beach parking lots. Separately, ESPN is negotiating over a significantly larger footprint — roughly 400,000 square feet of sand south of the pier extending to Parking Lot 3S and additional beach lots.
Two parties are in talks over the Camera Obscura at 1450 Ocean Ave. and its adjacent exterior grass areas: the Swiss Federal Government's Federal Department of Foreign Affairs and the British Olympic Association.
A fifth negotiation involves The Living Library of Nature, Inc. over an approximately 50,000-square-foot sand area north of the Beach Bike Path near Lifeguard Tower 13. All five sessions concern price and terms of payment for the respective licenses.
State Transit Housing Law Triggers Local Debate
The council will also take up how Santa Monica plans to respond to Senate Bill 79, the Abundant and Affordable Homes Near Transit Act, signed by Gov. Gavin Newsom in October 2025 and set to take effect July 1, 2026.
The law establishes minimum height, density, and floor area standards for housing projects within a half-mile of qualifying transit stops. Santa Monica's Metro E Line stations meet the threshold as Tier 2 stops, meaning the law would allow buildings of up to 85 feet near those stations.
Staff and the Planning Commission are jointly recommending a phased strategy. The approach would pair a temporary exclusion ordinance — phasing in full SB 79 standards through 2030 — with a longer-term Transit-Oriented Development Alternative Plan to be developed as part of the city's next Housing Element update. The Planning Commission voted unanimously to endorse the two-track approach.
The law's sharpest local impact would be felt in the Pico Neighborhood and mid-city area, where staff estimates roughly 545 eligible parcels could see allowable development intensity more than double under existing zoning. Staff flagged concerns about displacement and affordability there, noting the area has the city's highest concentration of minority and lower-income residents.
Not all of the city's transit zones face equal exposure. Staff noted that the Downtown, 17th Street/SMC, and Bergamot Station zones already meet most SB 79 thresholds and would qualify for exclusion under the proposed ordinance. The Expo/Bundy zone, however, does not meet those criteria and would fall immediately under the new state standards when the law takes effect this summer.
The Planning Commission proposed a more targeted boundary in its recommendation, suggesting the city allow SB 79 to take effect within a quarter-mile of major transit stops — including the Bundy/Expo corridor — while extending protections to parcels in the quarter-to-half-mile range, particularly single-family lots in the Pico Neighborhood. All existing historic resources would be excluded from the new density standards. Commissioners emphasized that exclusions should be applied parcel-by-parcel rather than as a blanket measure.
The longer-range TOD alternative plan, commissioners said, should steer additional density toward commercial zones rather than single-family neighborhoods, while examining development rights transfers, homeownership programs for teachers and city employees, and protections for existing historic preservation incentives. Staff was also directed to clarify the law's precise definition of "major transit stops" and to analyze potential fair-housing and disparate-impact implications for the Pico Neighborhood.
The Santa Monica City Council meeting is scheduled for Monday, April 28 at 5:30 p.m. in City Hall, 1685 Main Street.