Eatery deal is green light for building conversion

Church buys out restaurateur's long lease

Sacramento Bee/December 27, 2007

The Ramona building, a 78-year-old former hotel at Sixth and J streets, will be converted into the Sacramento headquarters for the Church of Scientology after a multimillion-dollar renovation and seismic refitting.

Two years after it paid $4.75 million for the downtown Ramona building, the Church of Scientology is about to gain full control of the property.

A lease-buyout agreement was recently reached with Luis Jr.'s Mexican Food Restaurant, the last remaining tenant with a long-term lease in the five-story building at Sixth and J streets, the church said earlier this month.

Terms of the agreement were not disclosed, but the deal paves the way for the Ramona's conversion into the church's Sacramento headquarters - after the 78-year-old edifice undergoes a multimillion-dollar renovation that awaits City Hall approval.

"It's a good agreement that we're both happy with," church spokesman Mike Klagenberg said of the deal with Luis Jr.'s.

Luis Leyva Jr., owner of the restaurant, described the settlement as the offer he had waited for.

"I'm happy we were able to work out an agreement and we're parting on good terms," Leyva said during a break from cooking.

"If everything goes according to plan, our last day in the Ramona will be Dec. 28," Leyva said, adding that he is seeking a new downtown address for his business.

"I want to move to our new location as soon as possible."

On the advice of his attorneys, Leyva declined further comment pending the formal signing of the pact.

Leyva's buyout will be financed with cash from "the fundraising that we've done with our parishioners," Klagenberg said.

For at least 30 years, the local Church of Scientology has been based in a one-story building at 15th and I streets.

At 12,800 square feet, the building can no longer accommodate the chapter, which has more than 1,000 active members, not including seven smaller missions in greater Sacramento.

In October 2005, the church purchased the Spanish-style Ramona. The former hotel has an estimated 47,000 square feet of occupancy space.

At the church's request, several tenants - mostly law firms - vacated the premises by early 2006, with some lease buyouts.

But two first-floor tenants - Hand in Hand Bail Bonds Inc. and Luis Jr.'s Mexican Restaurant - stayed put.

A lease-buyout agreement with Hand in Hand was reached a few months ago, and that business is now in the process of moving out of the Ramona, Klagenberg said.

The owner of Hand in Hand could not be reached for comment.

With Hand in Hand taken care of, the church refocused its efforts on its talks with Leyva.

Leyva's business occupies the space of the former Kyoto Japanese Restaurant, which ceased operations in 2004.

Leyva learned the dining trade from his father, Luis Leyva, who operated Luis's Mexican Food on Alhambra Boulevard.

The son's menu was identical to the one developed by his father, who died in 2003.

What Leyva didn't anticipate is that after signing a lease through 2011, with an option for six more years, with the Ramona's previous landlord, he was no longer wanted in the Ramona.

"We first approached Luis prior to closing escrow. We let him know we wanted to occupy the entire building," Klagenberg said. "Luis was surprised. He wasn't really prepared for that, but he had a willingness to work with us."

The church plans to build a chapel in the area where people now consume enchiladas, along with chips, salsa and margaritas.

In a December 2005 interview, Leyva said he was negotiating with the church, but, "as long as I have that lease, I don't have to go anywhere if I don't want to."

Of course, Leyva added, that would change, if "they make me an offer I can't refuse."

The Ramona's renovation will include a seismic retrofitting.

"The lion's share of the renovation will be funded by the sale of our building at 15th and I streets," Klagenberg said. "It will be put up for sale in early 2008, with an asking price of about $3.9 million."

Though some details remain to be worked out, including permits and the final design for the project, the church is eager to move forward.

"If we could complete (everything) in 2008, we would be ecstatic," Klagenberg said.

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