A large group of residents, employees, and fellow business owners came out to support Three Stacks and a Rock Brewing Company during a Jan. 9 City Council meeting.
The outpouring of support followed Jan. 7 Facebook and Instagram posts from the brewery calling for people to rally against what they alleged was an unfair rent rate change for their property.
“As some of you may know, we agreed with the city to take over their abandoned building and transform it into the business it is today … unfortunately, the city is not honoring their contract with us,” the brewery’s Facebook post read.
Three Stacks said that in addition to paying the city a base rent for the space, the brewery would also be required to pay additional rent that equals 10 percent of its alcohol sales.
“This will result in our slow death and potential to go out of business,” the post stated.
Brewery owner Chuck Nettnin spoke during public comment at the Jan. 9 meeting, saying his business wasn’t able to reach an agreement with the city after multiple attempts at negotiating the contract. A contract amendment to increase his rent was on the Jan. 9 consent agenda.
“At this point, it looks like the city is picking and choosing what they want to enforce and benefit from,” Nettnin said. “This is not an item that should be [voted] on because we have not been given a chance to negotiate fairly.”
Nettnin also alleged that Morro Bay Harbor Director Ted Schiafone told him in meetings throughout the year that there would be no negotiations on the rent rate. Schiafone responded to the allegation, saying that the Harbor Department worked with Three Stacks for close to nine months on the contract.
“They have met with us, the City Council, the city manager, and the chamber of commerce. The lease they signed stipulates if we can’t reach an agreement, the default—which is this rent increase—occurs,” Schiafone said at the meeting.
He said that he had multiple “good faith attempts” on record to discuss the increase with Nettnin, despite the brewery falling behind on its payments.
City Attorney Chris Neumeyer added to Schiafone’s comments, saying that the current lease stipulates that Three Stacks needed to start paying a percentage of alcohol sales for rent in May 2022 when it opened, and that the brewery had not been held to that standard until now.
“I feel we have done outreach,” Mayor Carla Wixom said at the meeting. “We have a responsibility as an elected council to be fair and hold everyone to the same standards.”
Wixom and city staff acknowledged that the brewery made the financial effort to improve the building, but added that the city would no longer continue things as they had in the past and that the rate needed to reflect the terms of the lease.
The City Council voted 4-1 to approve the contract amendment and rent increase, adding a condition that it would increase gradually to account for Three Stacks’ business expenses. Δ
This article appears in Volunteers 2024.