SAN FRANCISCO (KRON) – A jointly-owned boat yard and restaurant are negotiating with the Port of San Francisco to stay on the city’s waterfront after ending up with an outstanding rent balance of $900,000.

San Francisco Boat Works, which offers boat repair and maintenance, and The Ramp Restaurant, are located in the city’s Mission Bay neighborhood near Chase Center. They are jointly owned by Arvind Patel through the company St. Francis Marine.

“For 16 years I’ve been trying to renew this lease,” Patel told KRON4. “We’ve made multiple efforts — all the way to the mayor — and it’s just not possible to get through these bureaucrats.”

St. Francis Marine first entered into a 30-year lease with the port in 1986, according to Randy Quezada, the port’s director of communications. Since that expired, the eatery and boat yard have been on a month-to-month lease.

“The port has worked with them to address various permit and compliance issues and offered to bring their percentage rent rates closer to comparable retail tenants in the area,” Quezada told KRON4. “However, because of their failure to correct these issues they are not currently in good standing and we have not been able to enter into a new lease agreement.”

These issues included making improvements without permits, though the port decided to give them the ability to apply for the permits retroactively.

Patel said that the fixes he made during the pandemic were absolutely essential.

“Everything in the whole place, after 30-40 years by the Bay, deteriorated,” Patel said. “It was a lawsuit waiting to happen — broken, patchy … It took eight months to bring everything up to code.”

San Francisco Boatworks, seen from above (Photo courtesy of Arvind Patel)

Patel told KRON4 that the boat yard’s rent is too high because while it makes a gross margin of less than 10%, it has to pay 8.75% of its sales to the port. He said this is more than double what comparable boat yards on California’s coast pay.

The COVID-19 pandemic hurt Patel’s businesses, which according to Quezada have not paid rent “for more than two years” despite $6.7 million in sales between March 2020 and January 2022. St. Francis Marine now has a $900,000 bill and was given a 30-day notice in March.

Now the two sides are in negotiations over rent relief.

“The Ramp and SF Boatworks offer great food and important maritime industrial services for small recreational vessels throughout the Bay Area,” Quezada stated. “The port is committed to ensuring that small and recreational vessels have access to services along the waterfront and seek to come to mutually agreeable terms with [St. Francis Marine.]

“Now that they are compliant with state and local regulatory agencies and seeking rent forgiveness from the port, we are able to extend to them the same rent relief options that were presented to all other Port tenants because of the pandemic,” he continued. “To date, almost 140 tenants have availed themselves of this generous program in addition to receiving other federal, state and local supports to offset pandemic losses. The port understands the significant challenges that the pandemic has posed to our tenants but must treat all tenants equitably and cannot offer more support to SFM than to others.”

Patel said, of the port, that “they want to work it out — but we need to come to an agreement to survive financially.”

“At the end of the day, we barely survived the pandemic,” he said.