His SLO bowling alley project fell apart. Now he faces lawsuits, complaints of ‘scamming’

Discovery SLO’s vision: Bowling alley, concerts, food and more — all in one spot

Jeremy Pemberton, managing partner of the Discovery SLO on Chorro Street in downtown San Luis Obispo, talks on April 7, 2017, about what the new entertainment center will look like. Construction is expected to start soon.
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Jeremy Pemberton, managing partner of the Discovery SLO on Chorro Street in downtown San Luis Obispo, talks on April 7, 2017, about what the new entertainment center will look like. Construction is expected to start soon.

The businessman behind a scrapped downtown San Luis Obispo bowling alley and entertainment center now is facing two lawsuits — one for allegedly cheating an investor out of $500,000 and another for neglecting to pay an $87,000 credit card bill.

Jeremy Pemberton — the managing partner behind the abandoned Discovery SLO bowling alley and concert hall — also recently has been accused of failing to fully pay some of his workers at his company’s new SLO tapas restaurant Branzino, which opened in March.

Pemberton, however, denies that he owes money to investor Carlos “Xavi” Fajardo, who has sued him, or that he owes money to any Branzino employees — adding that he is working out a payment plan with American Express to pay off his current credit debts.

”My client simply wants his money back,” said Michael Pick, who is representing Fajardo in the case against Pemberton.

Pemberton counters that the terms of the agreement were that “no partner shall demand or receive a return of such partner’s capital contribution.”

“The partnership was always contemplated to be a 25- to 35-year, illiquid asset,” Pemberton wrote in a written summary he shared with The Tribune.

Two lawsuits claim about $680,000 owed

A court judgment entered May 9 determined that Pemberton now owes about $593,000 in the case filed by Fajardo, a 28-year-old San Luis Obispo resident who invested $500,000 in the Discovery SLO project.

The judgment factors interest accumulated on the initial investment (totaling about $86,000) and lawyer fees (about $6,000), according to court records.

The case is set for a hearing June 5 to determine what assets Pemberton and his affiliated entities have toward properly compensating Fajardo, Pick said.

Pick said his client was approached by Pemberton in 2017 while already in the process of losing his lease “and getting kicked out” of the 1144 Chorro St. property where the bowling alley was to be located.

“After some diligence and representations by Pemberton,” Fajardo agreed to invest $500,000, and the partnership was recorded on Aug. 11, 2017, the lawsuit states.

“At the time, he had no sense that anything was wrong,” Pick told The Tribune.

In a photo from April 2017, Discovery SLO developer Jeremy Pemberton inspects the building at 1144 Chorro St., which was planned to include bowling, music, games, food and a speakeasy. The project was called off. Joe Johnston jjohnston@thetribunenews.com

In April 2017, Pemberton and his Discovery SLO company were sued by their commercial landlord, Jamestown, a multi-billion-dollar, international corporation, in a lawsuit that has since been settled.

Jamestown accused Discovery SLO of failing to pay $750,000 in rent as the project at 1144 Chorro St. stalled after years of planning. The details of how the case was resolved in 2018 were not revealed by either side. The project plan for the site was canceled.

Fajardo claims he followed up to get information on the project status but received “little to no substantive response” and demanded to inspect Pemberton’s financial records in February 2018 — which Fajardo had the right to do under their partnership agreement, the lawsuit states.

After a final demand for a response on May 4, 2018, without avail, Fajardo filed his lawsuit in June 2018, stating he had no idea of the status of the project or how his funds have been used, the lawsuit states.

Pick said that real estate investments can be risky and that his client was aware of that, but that Pemberton improperly hid information from Fajardo.

In a separate matter, American Express alleges Pemberton has lapsed on $87,652 in owed credit payments in a case filed in San Luis Obispo Superior Court on April 30.

The American Express lawsuit notes Pemberton’s payment had been due on March 24, 2019, and names Pemberton and his company, Discovery SLO Management LLC.

Pemberton’s response to the lawsuit claims

Pemberton said he plans to fight the lawsuit filed by Fajardo, and he has hired a lawyer after representing himself for nearly a year because of the financial hit he took from the planning of the bowling alley project.

He told The Tribune that he provided regular updates to Fajardo on the project’s planning and documented text messages.

In one text shared with The Tribune, Pemberton wrote to Fajardo about a $1.5 million credit line offered by a bowling partner, a $1.1 million reduction in construction costs and planned dates to start construction.

Pemberton told The Tribune he secured $6 million in financial commitments to construct the project.

Pemberton denies he ever tried to hide any information about the landlord-tenant relationship with Jamestown. Additionally, Pemberton denies that Fajardo ever asked to review his financial records, per the partnership agreement.

“I would have been happy to show him that information, but he never asked,” Pemberton said.

SLO Discovery015
The building at 1144 Chorro St. in San Luis Obispo, where a planned entertainment center was scratched. Joe Johnston jjohnston@thetribunenews.com

Pemberton told The Tribune that the $500,000 investment could go to a project elsewhere, and that he’s currently exploring plans in other cities, including Austin, San Diego, Miami, Sacramento, Portland and St. Paul.

“Under the terms of the partnership agreement, management has chosen to relocate the principal place of business,” Pemberton wrote in a Feb. 7, 2019, email to Pick. “... These are bonafide opportunities that may create a greater investment holding and (return on investment) potential than previously considered.”

Asked about Pemberton’s response Friday, Pick said in an email, “I don’t think any of his points have merit.”

Branzino workers say Pemberton owes them money

Additionally, workers involved with his newest venture, Branzino at 1122 Chorro St., have told The Tribune that Pemberton failed to properly pay them money they were owed for their work.

Hannah Broyles, a 22-year-old former back waiter at Branzino, told The Tribune that she is planning to file a wage claim with the state’s Labor Commission’s Office to recover her lost funds.

She was owed roughly $450 and so far has received $287, she said.

“I have been owed an extra 20 hours of pay for over 60 days now,” Broyles said in a letter she has prepared for Pemberton, shared with The Tribune.

Additionally, Broyles said she showed up to work some shifts and was sent home or put on break shortly after arriving and then sent home later without completing her full shift, which she believed was a way to skirt costs. She eventually quit, and knows of two other friends who quit, as well.

“I keep hearing that a lot of people are having problems with (Pemberton) at Branzino,” Broyles said. “It just seems like he’s scamming everyone he possible can.”

Broyles said Pemberton rarely communicated face to face with non-management employees during the month or so she worked there, but recalls one meeting in which he spoke in front of a group of workers.

“He gave us this spiel about how we’re going to make so much money and that we’re the best in town,” Broyles said. “He said we could go work some receptionist job, but we’d make more in a week at his restaurant than in a month and a half doing that.”

Two other former Branzino employees, who didn’t want to be identified, shared similar stories of not being paid money they said they were owed.

“He told me, ‘I don’t have any money right now,’ and ‘I’m going to have to pay you in a couple of weeks,’” one employee said. “I did get some money, but not what I was promised. I now have a law group that is representing me.”

Pemberton says issues worked out

Pemberton acknowledged that some initial checks bounced, but attributed that to a misunderstanding with a planned credit deposit, and said all issues with the bounced checks were resolved within 24 hours.

Pemberton also said that according to his accounting records, as of now, all payments have been properly made to employees.

He acknowledged that some employees worked shifts of only a couple of hours when business was slow, but said that was a financial decision not to overspend on staffing when customer numbers were low.

“According to our records, we have paid everybody what they’re owed,” Pemberton said. “I have 23 employees now. The business is doing outstanding. We have amazing Yelp reviews, and we’re filling up every Friday and Saturday night. We’re offering a great product.”

Pemberton attributed employee departures to a high turnover rate at restaurants.

Pemberton said he expects the restaurant to be highly profitable and that he plans to open “15 to 20 more Branzinos” across the country.

Pemberton, whose company also owns and operates the Discovery Ventura bowling center, has an Instagram account titled “mrbreadbaby.”

One recent post, commenting on his 35th birthday, notes: “I’ve found the most rewarding, and equally humbling, experience is creating a culture where the individuals you work with truly feel like family.”

Pemberton added: “I’ve taken some heavy beatings in the past 10 years, and I’ve had failures that unfortunately have hurt others along the way, and I wish more than anything was avoided and humbly apologized for. My enthusiasm is that with age comes wisdom. My management of risk/reward matures daily.”

Correction: This article has been changed to correct a word related to an Instagram post in the last paragraph.

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Nick Wilson covers the city of San Luis Obispo and has been a reporter at The Tribune in San Luis Obispo since 2004. He also writes regularly about K-12 education, Cal Poly, Morro Bay and Los Osos. He is a graduate of UC Santa Barbara and UC Berkeley and is originally from Ojai.