Title
[Sublease Agreement] Subleasing of Old Sacramento Waterfront Café - Steamers Building
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FileID
File ID: 2026-00613
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Location
Location: 1108 Front Street, District 4
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Recommendation
Recommendation: Pass a Motion: 1) finding that special circumstances make the use of a bid procedure inappropriate and that the use of another competitive solicitation process is in the best interest of the City; and 2) authorizing the City Manager or designee to execute the attached Sublease Agreement with Der Biergarten Waterfront for an initial one-year term and up to three five-year extensions for a premises along the Old Sacramento Waterfront.
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Contact
Contact: Valerie Mamone, Project Manager, (916) 808-5451, vmamone-werder@cityofsacramento.org, Office of Innovation and Economic Development; Dustin Hollingsworth, Assistant Director, (916) 808-5538, Convention and Cultural Services, djhollingsworth@cityofsacramento.org
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Sublease Agreement
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Description/Analysis
IssueDetail
Issue Detail: On November 19, 2024, staff updated the City Council on the Waterfront Reinvestment Program, which included the Waterfront Site Redevelopment Opportunity. The Waterfront Site Redevelopment Opportunity included two City-owned sites on the Embarcadero: the former Rio City Café building and adjacent Steamers Building. Synergistically, the two buildings could offer a variety of waterfront dining options to further attract visitors to Old Sacramento and staff anticipated issuing separate solicitations for each site.
The Steamers Building was previously used as an ancillary kitchen for Rio City Cafe. It is located on the waterfront at 1108 Front Street that measures approximately 750 square feet with an approximately 1,500 square feet of outdoor seating directly to the north of the building, adjacent to the river.
On June 16, 2025, staff issued a Request for Expression of Interest (RFEI) seeking a qualified restauranteur to sublease the Steamers Building. The RFEI called for a fast casual walk up café, food and beverage concept that will enliven the Embarcadero and increase riverfront vitality and connectivity. The City received eight responsive proposals from local and national restaurants, cafes and pop-up concepts.
An evaluation committee scored each of the eight proposals based on criteria specified in the RFEI and selected five of the eight proposals to be further evaluated through interviews. One of those five selected proposers declined the opportunity to interview.
During interviews proposers were able to elaborate further on their concepts and were again ranked based upon predetermined criteria published in the RFEI. As a result Der Biergarten Waterfront received the highest score and the committee recommended the concept to move forward with sublease negotiations. The attached sublease is the product of negotiations and Staff recommend executing the agreement.
The Steamers Building is situated on property owned by the State of California (“State”) and leased to the City through City Agreement No. 86013. The terms of the State lease require the City to get approval from State for sublease agreements with terms beyond one year. After City Council approval, the sublease will be submitted to the State Lands Commission for approval. If State approval is not obtained, the sublease may not be extended beyond the initial one-year term.
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PolicyConsiderations
Policy Considerations: The approval of the sublease with Der Biergarten Waterfront will further the vision, goals, and objectives of the City’s 2040 General Plan, the 2003 Sacramento Riverfront Master Plan as approved by the cities of Sacramento and West Sacramento and the Sacramento riverfront priorities set out by the Mayor and City Council in 2017. Further, a new riverfront restaurant will support future city investments in the Old Sacramento Waterfront by creating a related and supporting asset that will aid the economic development efforts of the city and other civic organizations.
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EconomicImpacts
Economic Impacts: A new Sacramento waterfront business can have a significant, beneficial impact on Sacramento’s ability to capture increased sales and encourage visitors’ choice of Sacramento as a leisure destination. Additionally, a new restaurant will draw visitors to the waterfront, increase visitation and dwell time in the Old Sacramento Waterfront which will support other businesses.
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EnvironmentalConsiderations
Environmental Considerations: Under the California Environmental Quality Act (CEQA) approval of the proposed sublease agreement has been determined to be exempt from CEQA pursuant to CEQA Guidelines Sections 15301. The project consists of the operation, repair, maintenance, permitting, leasing, and minor alteration of existing public or private structures, facilities, and mechanical equipment involving negligible or no expansion of existing or former use.
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: City staff released a RFEI to seek a restauranter qualified to operate a successful walk-up café concept with food and beverages. The concept Der Biergarten Waterfront was selected and will accomplish the goals of activating the embarcadero by adding live music, communal tables and German food and drink offerings to families and patrons. Der Biergarten will generate revenue that can be reinvested in the public realm of Old Sacramento and the riverfront. The development of a new walk-up cafe on the waterfront will provide a world-class urban experience for residents, workers, and visitors. Further, the project will help to reactivate the Old Sacramento Waterfront and create an unique asset for marketing the Sacramento region.
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FinancialConsiderations
Financial Considerations: Revenue from the businesses that fall within the area that the City leases from the State Land Commission have generated more than $2,449,000 in the past four fiscal years (FYs) with a high FY2022/23 of $963,052, as these revenues include pandemic related back rent payments, and a low in FY2024/25 of less than $438,588 reflecting the closure of Rio City Cafe. Executing a sublease with Der Biergarten Waterfront in the Steamers Building will help restore revenues.
Pursuant to the lease between City and State, the City pays the State Lands Commission 20% of the gross rental income that it receives from the leased property, with the City keeping the other 80%.
The restaurants located on the Embarcadero are the highest revenue generators for the State-leased properties. The revenue is deposited as General Fund (Fund 1001) in the Convention and Cultural Services Department and is used for ongoing maintenance in Old Sacramento. An additional waterfront restaurant will be a significant source of revenue for the City and assist in maintenance costs in Old Sacramento.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Sean Deerfield and Der Biergarten Waterfront meet the requirements of LBE.
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Background
Background: On June 16, 2025, staff issued a Request for Expression of Interest to select a qualified restauranteur for a fast casual walk-up café concept for a sublease for the Steamers Building, a City-owned building located on the waterfront at 1108 Front Street that measures approximately 750 square feet.
The City requested proposals from restauranteurs for a walk-up café, food and beverage concept that would enliven the Embarcadero and increase riverfront vitality and connectivity. Additionally, it would create a new destination that extends the dwell time of visitors to Old Sacramento during the day and attracts more visitors in the evening. The City received proposals from eight businesses:
1. A Kitchen Bayou
2. Der Biergarten Waterfront
3. Alchemist and Bike Dog Brewing
4. Fisherman Wharf Café
5. JMSI Poke, LLC
6. Everytable
7. Dutchman Stroopwafels
8. Balance Me Out
Staff reviewed and scored the eight proposals and recommended interviewing five of the proposers. An evaluation committee comprised of a Sacramento urban retail broker, an Administrative Analyst with City of Sacramento’s Convention and Cultural Services, and a local restauranteur/entrepreneur reviewed and interviewed four of the Proposers: A kitchen Bayou, Der Biergarten Waterfront, Alchemist and Bike Dog Brewing and JMSI Poke, LLC. Fisherman Wharf Café opted not to interview.
Der Biergarten Waterfront received the highest score from the evaluation committee, and a decision was made to recommend the concept to move forward with sublease negotiations.
Sean Deerfield is a local business owner with establishments in Old Sacramento and Midtown. He is community-minded and a strong partner and collaborator in the city. With the current success of Der Biergarten Midtown this new concept in Old Sacramento will deliver an authentic German beer garden experience encouraging communal dining and social connections in a family-friendly environment. Der Biergarten Waterfront will offer a vast array of authentic German food and beverages, as well as local Sacramento craft beers catering to both the German culture aficionados and craft beer enthusiasts.
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