Proposed hotel, brewery development on Morro Bay’s Embarcadero put on hold

The Morro Bay City Council has delayed indefinitely deciding whether to issue a lease for a new 30-room hotel on the Embarcadero.

Developer John King and Burt Caldwell, owner of the Libertine Pub, have proposed building a hotel, brewery and distillery at 833 Embarcadero at the current site of the Libertine and neighboring Off the Hook seafood restaurant. The properties are among 30 sites the city leases out along the harborfront.

At its meeting Tuesday, council members told the developers they wanted more information on a parking plan and revenue the project would generate for the city, Councilwoman Christine Johnson said. The council also told the developers they don’t support a part of the project that calls for seven floating sea cottages.

Public comment was also against the sea cottages, Johnson said, primarily because of the reduction in boating space the cottages would cause. The council asked for additional information from city staff about these issues.

“We were hoping to get that information by the end of October but staff said that would be difficult,” she said. “It certainly will not be a quick turnaround.”

In addition to the seven floating sea cottages, the development calls for seven ground floor rooms and 15 second floor rooms. The ground floor would also have a brewery and distillery facing the Embarcadero and an outdoor sailing-themed bar serving hot food.

The development is estimated to cost $11.5 million and generate a projected $3.6 million in revenue to the city over the first 10 years, including nearly $300,000 a year in transient occupancy taxes. If developed, the hotel would be managed by the Boutique Hotel Collection.

The development would require the removal of the Libertine Pub and Off the Hook restaurant buildings to create a single 127-foot-wide parcel. In a staff report, City Manager David Buckingham described the development as a once in a lifetime opportunity for the city because it would allow two small parcels on the Embarcadero to be combined into a larger parcel.

“If the two sites are redeveloped independently, then the leases will almost certainly be 40 to 50 years each,” the staff report states. “There will not be another opportunity to combine those sites until around 2060, if at all.”

If the City Council approves the lease, the project would have to be approved by the city Planning Commission and the California Coastal Commission. The leases for both the Libertine and Off the Hook properties expire in 2018.

This story was originally published September 14, 2016 at 5:15 PM with the headline "Proposed hotel, brewery development on Morro Bay’s Embarcadero put on hold."