City Amends Harbor Hut Lease

The Harbor Hut Restaurant in Morro Bay has been granted a lease extension after completing nearly a million dollars in repairs and improvements. Submitted photo

The City of Morro Bay has amended the lease of one of the longest running and most elegant restaurants on The Embarcadero, after the leaseholders completed nearly a million dollars worth of improvements and repairs, with a quarter million more promised in the future.

The thatched roof, Tiki-themed Harbor Hut Restaurant, located at 1205 Embarcadero, had negotiated a new lease in 2018 that included 5 years left on the old lease and another 27 years into the future, 32-years total.

But that lease had three conditions that had to be met:

• Further develop the lease site, in particular the floating dock and slip on the water portion of the site;

• Complete repairs to the underlying structure of the building, in particular the underpinnings and piles holding up the cantilevered dining room, and the seawall, and,

• Pay a “fair share” contribution to the Harborwalk, a portion of which was incorporated into the sidewalk across the frontage of the building.

At the time the estimate for all this work was $500,000 but by the time all the work was done the cost was actually much more than the original estimates.

“The dock system exceeded estimates,” reads a report from the Harbor Director, “and the required pile repairs were much more extensive than what was originally surveyed.”

Most recently, the owners, Troy and Heather Leage, proposed another $255,000 in improvements due to be completed by the end of 2029 and bringing the total reinvestment up to some $800,000, according to the report. The Harbor Department, which manages all the waterfront lease sites, is happy with the long-time leaseholders.

“Harbor Hut is a lease in good standing and has done an excellent job of keeping the facility in good repair and presentation. The current lease term expires in 2050.”

The latest amendment to the lease added 5 more years with an option for another 10 years if the site passes a survey/inspection. “The survey and repairs will include all buildings, structures, improvements, utilities, appurtenances, the pier and wharf, and any other work necessary to maintain the Lease Site and preserve the service life.”

The lease site is restricted in what can be done there. Harbor Hut sits in the Measure D Zone, the area of the waterfront from Beach Street north that is reserved for commercial and sport fishing related uses.

So a new development could go in if it had something like a fish market as a tenant, but things like gift shops selling T-shirts to tourists would probably violate the restrictions.

That voter initiative, passed in 1983, allowed existing developments, mostly restaurants like Harbor Hut and Tognazzini’s Dockside, to remain in business but they cannot expand their footprints, which greatly limits what a person can do with a site. It grandfathered in existing uses and limits future competition in the Measure D Zone.

The investments made at Harbor Hut, along with the redevelopment next door at Morro Bay Landing, which greatly expanded private slips and brought new sport fishing outfits to town, have made that end of the waterfront much more popular. Also, that end of Embarcadero is where the most parking is located, as well as the legitimate tourist attraction of the Maritime Museum, which is across the street.

According to the Harbor Hut website (see: harborhutmorrobay.com), the Hut was first opened in 1951.

“Founded by Ralph ‘Tiger’ Ruse the Harbor Hut was established in order to cater to the increasing number of travelers coming from the Central Valley, Los Angeles, San Francisco, and from around the world who looked to explore the amazing stretch of coastline to the north and south of Morro Bay.”

In 1964, Tiger’s son in law the late George Leage started working at Harbor Hut and eventually took over daily operations and began managing the restaurant. George bought the restaurant in 1978 keeping the establishment in the Leage Family.

George’s son, Troy, began working at the Harbor Hut in 1980 and soon began to manage the daily operations. In 2009, Troy Leage and his wife Heather bought the restaurant from George solidifying the long family tradition.

The two also have the ‘Lil Hut, a small hamburger and fish & chips takeout restaurant next door to Harbor Hut. So the business caters to both the casual, lunchtime customer who wants to sit on a covered patio overlooking the bay, and folks looking for a nice sit-down dinner or after work cocktail.

City Amends Harbor Hut Lease

Comments