Morro Bay’s popular brewpub, The Libertine, will continue for at least 3 more years after signing a new, interim, master lease for its location on the Embarcadero.
The craft brewpub, located at 801 Embarcadero, with a huge offering of craft beers on tap and food, had its future blurred somewhat when the master leaseholder of the tideland’s trust property, Burt Caldwell, informed the City that he wanted to turn back the lease and had given up trying to redevelop the lease site.
“As many of you know,” reads a June letter to the City from Caldwell, “I’ve had numerous plans in front of the City over the past five years at the cost of hundreds of thousands of dollars. I’m at a stage of my work career being 73-years old where another plan just is not attractive.”
He added that the Coronavirus Pandemic response that shutdown all non-essential businesses (initially including restaurants, bars, and pubs) and the loss of rents from a closed sub-lessor added to his decision to let the property go back to the City.
Caldwell had held the master lease since 2006, when he and Rose’s Landing owner Doug Redican, proposed to develop a conference center, retail shops, and small motel. That was in response to the City’s long-time efforts to get a conference center built in town.
That project, approved by the city council, was drastically changed by the Coastal Commission, which cut the 2-story building down to one, in order to protect the view from the Centennial Parkway next to Dorns.
This even though the current building is two stories.
A second and third attempt to redevelop the site never really got off the ground; the lease ran out this month.
Libertine, which opened in October 2015, purchased the microbrewery business that Caldwell had built, Embarcadero Grill, and eventually expanded into the street-side former retail space that had been Southern Port Traders for decades.
Under the terms of the new lease, Libertine will pay the City a minimum rent of $32,000 a year, which Harbor Director Eric Endersby said would be $4,000 more a year than they were getting under the former lease terms.
As with other new leases, when revenues go past a certain threshold, the City would switch to a percentage of gross receipts — 3% for restaurant/dining, 5% for fast food/convenience food, 10% for bar/lounge and beer, and wine, 5% for retail sales, 10% for boat tie-up and 5% for all other uses,” according to Endersby’s staff report.
“Since this lease site has never had a percent-based master lease before,” Endersby said, “it is unknown what the percent rent-generating capacity may be.”
The City still wants the site redeveloped. “This term will allow sufficient time for Newton [Eric Newton, Libertine owner] to submit a redevelopment plan and the City to evaluate that plan,” Endersby said. “If the City Council decides not to accept Newton’s plan, then time will still be available to put the site out to receive proposals, based on a request for proposals [RFP ] and for the City to pursue that RFP process while retaining Newton as the interim tenant.”
There was no change to the potential uses on the site — restaurant and foodservice, bar and retail sales, an “allowance for use of a dock for commercial and pleasure vessels and including passenger-for-hire vessels.”
The site currently has traditionally only had a floating dock, and boat slips would presumably be part of a redevelopment project, in keeping with the City’s desire to develop the water lease sites along with the shore sites.
Until “no later than September 30, 2021,” Libertine has” to submit a conceptual plan for the site’s redevelopment. That plan needs to include: long-term vision for the premises to include proposed new building type, size, uses, and operations, including sufficient plan drawings and renderings to show the basic layout and visual aspects of the plan.
The City wants a redevelopment timeline included, plus a plan for financing.
Caldwell’s most recent proposal was to expand the existing building into the street end and put in motel rooms on the building’s second floor.
That’s what was called for in the City’s now-dead Market Plaza plan. That plan encompassed the redevelopment of the City’s Market Avenue property, the Centennial Stairway, and Parkway (including the Giant Chessboard) and going down to the water’s edge.
It would have eliminated the street end parking and turned it into a public plaza and built a huge motel-retail complex on the parking lot across the street.
The City has gotten a few bites on what would be a major redevelopment, but no takers have been announced to date. The building on the bluff is now leased by Ciano Real Estate.
Asked what the City expects to be done with Libertine, Endersby said, “Personally, I would expect a full tear down — the building is pretty tired. But we will see what the Libertine folks’ vision is. We will be more actively involved on this one, as opposed to the past attitude of ‘What do you want to do?”’ This time we will be more involved in the visioning part.”
Libertine will also be on the hook for payment of rents that the City deferred as part of its local pandemic response. Caldwell’s letter said he was getting $4,800 a month, with some $2,300 going to the City. The $32,000 minimum rent is based on 8% of the “current appraised values.”