Chalet signed a 20-year, $3-million lease agreement for the boathouse and will invest at least $2 million improving the space. The 350-seat restaurant overlooking Lake Merritt is expected to open in May 2009. The remainder of the space, in a lower level accessed from the lake site of the building, will be leased out for boat-related uses, such as boat rentals and a rowing club.

The city's real estate services manager Frank Fanelli tells GlobeSt.com that the Chalet Management's improvements will be on top of $12 million the City of Oakland is spending to restore the 24,000-sf historic structure and create a regional park on the surrounding land. Much of the expense is attributable to a seismic retrofit being required because of the change in use. The building, which sits on water, also needs to have pier rings replaced, he says.

The project is clearly not a profitable one for the city. Fanelli says the goal was to preserve and reactivate an historic structure, increase public access to the lake and "bring some ambiance to that area," Fanelli says. "There's not a four- or five-star restaurant anywhere in the vicinity unless you come to Downtown Oakland," he says. "It will be a nice amenity for people who live along the lake and will attract people to the lake in general."