3 iconic Baywood properties sold to owner of historic Santa Barbara hotel

About a year after Baywood/Los Osos developer Bill Lee died, his family has sold the half block complex that includes a waterfront inn, coffee shop and a restaurant — all along 2nd Street in Baywood.

The real estate and businesses are being purchased by Santa Barbara hotel owner and developer Carl Johnson, who operates the landmark Upham Hotel, which opened in 1871 and is said to be Santa Barbara’s oldest continuously operating hotel. Johnson has owned the 50-room boutique hotel and restaurant Louie’s Bistro since 1982.

The new owners took over the Baywood property and business April 8.

Included in the deal is the Back Bay Inn, a 16-room boutique hotel; the shuttered Blue Heron upscale eatery completely remodeled by Lee but closed for many months due to the pandemic; and the newly leased coffee shop (Nautical Bean), now open.

Not included are several outbuildings used for more hotel rooms and office use and some residential units as well as the Thai favorite 2nd Street Cafe building, also owned by the Lee family. Sources say Johnson may end up acquiring these properties along 2nd Street as well later. Not included in the sale is the Lee family-owned Merrimaker Bar at the end of the block, again open for business after a pandemic hiatus.

Bill Lee worked to bring visitors to Baywood

All of the properties had been improved by Bill Lee, who worked hard over the years to attract locals and visitors to the area with festivals and music concerts. He also is credited with forging a community garden in town, paying for the costs.

Lee retired from his very successful commercial real estate business, Lee & Associates, that still operates around the U.S. West in favor of his adopted and laid-back home in Los Osos.

Both Lee’s Back Bay Inn and the Santa Barbara Upham Hotel share a similar upscale yet quiet feel and relaxing charm.

Johnson was not able to comment on the sale, but an associate, Jon Bowen, said, “We’re excited about the opportunity to be in the Central Coast with the purchase of the Back Bay Inn. The Back Bay Inn will complement our sister property, the Upham Hotel in Santa Barbara.

“As we are taking over operations, we will take our time learning about the area and the property before we make any changes. We recognize the inn’s significance in the community and wonderful location. As we move forward, we will look to highlight the properties’ offerings and create memorable experiences for our guests.

“We are currently seeking out an upscale restaurant operator to resume operations of the Blue Heron.”

The hospitality firm also owns Country House Inns, a collection of family-owned inns located in California and Southern Oregon wine regions.

Before his death, Lee was working on a permit to add nine more rooms to the Bay Bay Inn. It’s unclear what will happen to that proposal.

John Lindt is the editor of the news website Sierra2theSea.net.

This story was originally published May 2, 2022 at 11:13 AM.