A sizable showdown is brewing over the fate of the much-revamped Harbor Restaurant — the mothership of all restaurants to open their doors to customers on Santa Barbara’s Stearns Wharf since 1941.
Two weeks ago, John Thyne III, one of the restaurant’s new owners — not to mention a major buyer and seller of real estate and an up-to-his-elbows attorney in town — sued City Hall, claiming that the terms of the lease are unconscionably onerous and egregiously impossible for anyone hoping to make a go of it. Two years into his ownership, Thyne claims that the fine print of the lease, which was negotiated and agreed to by a prior owner, is adjusted upward every year and never goes down despite declining market realities. He has sought and failed to renegotiate those terms with City Hall. Talks have occurred but no changes got made, so Thyne is hoping a judge will intervene and help reform the lease.
For good measure, he added highly creative arguments into his filing papers. For example, he blames City Hall for letting the Funk Zone explode commercially unimpeded, failing to solve the homeless problem, and allowing a proliferation of problems that have undermined the commercial viability of anyone trying to do business on the waterfront.
While such arguments are certainly colorful, they are not the core of his case. The core is that Thyne — one of three partners in the Harbor — is now charged 20 percent of his restaurant proceeds in rent, which if not “unconscionable” is certainly unsustainable.
For large behemoths such as the Harbor, the waterfront is an especially difficult place to stay financially afloat. Only the most skilled, experienced, and deep-pocketed of such large operators survive.
City Administrator Kelly McAdoo termed Thyne’s lawsuit “meritless,” stating she and other high-ranking city officials negotiated with Thyne in good faith. She noted that the Harbor, which underwent a major makeover under Thyne’s assumption of control, is now $650,000 in arrears in his rent.
Thyne confirmed that he has been served with an eviction notice. He said it’s his intention to petition Judge Colleen Sterne to have the two cases combined; at that point, he said, he hopes both sides can come to terms. In the meantime, he said, the Harbor is doing much brisker business, selling the best seafood in town, and on its way to creating a scene that draws locals as well as visitors.
