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Morro Bay delays decision on hotel project 

Morro Bay isn’t quite ready to have sea cottages floating in the harbor next to boats, sea otters, and the occasional paddleboarder.

That was the consensus at the Morro Bay City Council meeting on Sept. 13, when the council decided to delay a decision about a 30-room hotel development that would combine two lease sites on the Embarcadero.

In March, Morro Bay sent out a development proposals request for what’s currently the Off the Hook Seafood Grill site. 

City staff considered three of those proposals, but the project that ultimately wooed staff came out of left field.

Burt Caldwell, the leaseholder at the Libertine Pub site on the Embarcadero, joined forces with well-known area developer John King to form K&C Development LLC. Together they proposed a larger project that combines the Off the Hook and Libertine sites to make room for a 30-room hotel, brewery, and distillery—featuring seven “sea cottages” that would float in the harbor.

City staff recommended K&C Development’s project to the council, as it presented “a once in a lifetime opportunity” to combine the two sites and maximize revenue to the city.

But the council expressed reservations about giving the green light to any project without reviewing concept plans for Centennial Parkway, a long-planned city effort to revitalize downtown and the Embarcadero. The Centennial Parkway plans would directly connect with any development at Off the Hook and/or the Libertine Pub.

From parking concerns, to eelgrass, to the impacts on boating, to public access, the council named concerns and wanted more time to review the projects.

“It’s creative, no doubt, but a bit of a stretch, mentally, for our community and likely permitting agencies,” Councilmember Christine Johnson said.

The council decided to delay a decision until after it approved a concept plan for the Centennial Parkway. The council will review two Centennial Parkway concept plans on Sept. 27.

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