Oyster Farmer to install FLUPSY at North T-pier

By Neil Farrell · Mon Aug 31 2026

City Council approves two-year lease for floating upwelling system as oyster farming continues to expand in Morro Bay

Oyster farming in Morro Bay got a boost after the City Council agreed to lease a portion of the North T-pier to one of the local growers for an oyster nursery.

Harbor Director Chris Munson brought the item to the council on behalf of Grassy Bar Oyster, Co., to allow them to lease a section of the North T-pier and install a floating upweller system (FLUPSY).

"A FLUPSY is an aquatic nursery used in oyster farming to rapidly grow tiny juvenile oysters (spat) to a size where they can survive predators in the open ocean," Munson explained in his report. "Both Grassy Bar and Morro Bay Oyster Company operate a few FLUPSYs in Morro Bay at both public and private docks."

The lease payments were set at $6,212 a year (about $517 a month). He'd also set the annual rate for electricity needed to run the FLUPSY pumps at $1,643. But that's where the proposal caught the council's attention.

"The council approved it, but directed staff to have the electricity metered rather than them paying the fixed fee," Munson said.

The lease covers a 36-foot portion of the southern arm of the T-pier on the inside (shore) side. The FLUPSY is 20 feet long and they also want to put in a 16-foot floating work dock to service it.

"The FLUPSY and dock combined have a similar footprint and impact to a 37-foot vessel," Munson said. "The license rent was priced accordingly."

And just like a boat tied to the pier, it needs to be connected to shore power. "FLUPSYs require electricity to power the upwelling system and need water for occasional cleaning," Munson added. "Grassy Bar will pay the electricity fee per plug used."

The North T-pier is wired for electric power, and any boat that ties up there can use a special marine-rated extension cord to hook up to a power box. Boats normally pay a set fee per day to use shore power. 

The lease is a little unusual. Visiting boats can tie up there on a temporary basis. But only the Harbor Patrol, Coast Guard, and Fish & Wildlife's patrol vessel have permanent spaces at the North T-pier.

"The T-Piers are currently underutilized, so providing a dedicated space is not an issue," Munson said.

The company has to get a Coastal Development Permit from the Coastal Commission, as the area lies within its "original jurisdiction," but Munson said they wanted something from the city first. "The Coastal Commission requires an approved license agreement before processing their Coastal Development Permit," according to Munson.

It would seem to be a slam dunk, as one of the preferred uses of the ocean the commission has supported is aquaculture, like oyster farming.

It will also bring in some needed revenue for a Harbor Department that has a lot of maintenance work to catch up on and that has seen its lease revenues flattening out for some time now.

Grassy Bar's lease is for two years, but the contract says either party can terminate it with a 30-day notice. The Harbor Director can also twice extend the lease after it expires for two years each time, making the agreement potentially for six years.

Munson said they intended to monitor the power usage but if it's metered, that should do that job for them. Installing an electric meter will likely increase Grassy Bar's costs.

Of note, in the council packet, Grassy Bar included a diagram roughly showing what the FLUPSY's profile would look like in the water. That graphic, which was not done to scale, was actually taken of the wrong pier.

"The picture was actually of the South T-Pier," Munson said. "They took it there because there was a boat at the North T-Pier at the time in the real location."

The South T-pier would be problematic for a couple of reasons: First, it is mainly used for commercial fishing boats, and second, the little cove between the south arm and shore is where sea otters have been hanging out — many with pups — for several years now. It's a popular spot for fans of the sea weasels, as they can easily watch them and photograph them from the Harborwalk above what is now nicknamed, "Otter Cove."

Also, putting an oyster nursery next to a sea otter nursery might not be the best thing to do (Ironically, there's a sea otter floating in the bottom right corner of the picture).

The bulk of the oyster farming is done in the back bay, in an area between Morro Bay and Los Osos.

Grassy Bar and Morro Bay Oyster Co., each have leases out there in the mudflats where they hang bags of oysters to grow to market size with the high tides submerging them twice a day.

The oysters are brought in as larvae, as there are no native oyster species in Morro Bay. Oyster farming in Morro Bay has been done for many decades.

Feature Image: Grassy Bar Oyster Co. has been granted a lease on the North T-pier to install a FLUPSY. The diagram shows what the profile of the floating oyster nursery would look like. Rendering by Grassy Bar Oyster Co.