[Updated: Fri., Jan. 9, 1:17 p.m. and 5 p.m.]
Attorneys for Santa Barbara City Hall exercised their peremptory challenge rights to bump Judge Colleen Sterne off a lawsuit over its lease brought by the Harbor Restaurant, one of the two mothership-sized dining operations located on Stearns Wharf. One of the restaurant’s owners is John Thyne III, a high-profile attorney and real estate broker.
City Attorney John Doimas declined to explain Sterne’s removal, stating, “That decision involves confidential litigation strategy and should not be interpreted as a personal or professional reflection of any kind.”
Prior to the filing of the lawsuit by the Harbor Restaurant, it had been in a protracted dispute with the city, Doimas indicated, involving the nonpayment of rent. Doimas stated, “The Harbor Restaurant is nearly a year behind on its rent and went several consecutive months without paying the City.” With Thyne and his partners $650,000 behind in rent, City Hall filed a notice against them to pay or quit. It’s only a matter of time before an unlawful detainer is filed.
In the restaurant’s case against the city, Thyne has charged that the lease on the property is “unconscionably onerous” and is structured in such a way that 20 percent of its revenue — $61,000 a month — winds up going to pay rent. Thyne and his partners inherited an existing long-term lease when they took control of the flagship restaurant. Thyne has sought — without success — to renegotiate the terms with the city.
Some city officials have described the level of relief Thyne is seeking as tantamount to “a gift of public funds,” which, they point out, is against the law.
Doimas said the city has worked hard and in good faith to work something out with Thyne: “The City has acted in good faith throughout, has been very patient, and has taken multiple measures to mitigate and offset costs.” Thyne has argued that the terms are so unreasonable no operator could hope to stay afloat; he said he was appealing to the courts to get the lease “reformed.”
When Thyne filed legal papers against the city a few months ago — he also charged that City Hall has undermined the Harbor’s market base by allowing the unchecked proliferation of the Funk Zone. Once that happened, Doimas said those discussions became more difficult.
“The City has done nothing wrong here and will vigorously defend this lawsuit,” he said.
Thyne said he will move to consolidate the two cases — once the city’s unlawful detainer is filed — into one.
In the meantime, Judge Donna Geck has been named the new judge. Thyne said he’s fine with Geck just as he was fine with Sterne.
When City Hall waged all-out legal war against landlord Dario Pini — famous for building code violations, jerry-rigged accommodations, and crowded quarters — Judge Sterne presided over the lengthy trial. Thyne represented an insurance company that underwrote coverage for Pini’s properties and showed up in the courtroom, sitting alongside Pini’s legal counsel. While Pini would agree to pay $336,000, the trial results were at best mixed for City Hall.
Sterne also presided over another lengthy trial over a proposed gang injunction in 2014. City Hall claimed the injunction was necessary to curb growing youth violence, but civil libertarians argued it was too broad and sprawling in its impact and would effectively criminalize all young Latino males. The trial was long, intense, and hard-fought; Sterne ruled thoroughly against the city and its proposed gang injunction.
Editor’s Note: This article was updated to clarify that City Hall’s ongoing legal dispute with the Harbor Restaurant is not yet a lawsuit, and that the Harbor Restaurant has sued the city over the terms of its lease.
