Walk the Embarcadero this week and you will see banners going up between Harbor and Pacific Streets, the same stretch of waterfront where Morro Bay's Avocado and Margarita Street Festival is set to return on Saturday, September 12. It is a homecoming seven years in the making. What you will also see, a few doors down, is a building that has sat closed all summer: the old Libertine Pub, its windows dark at 801 Embarcadero, its future now in the hands of a city process that has nothing to do with the operator who spent more than a decade trying to save it.
Both stories are about the same short block of waterfront, and both are about a city that has decided it is done waiting.
A Party That Skipped Six Septembers
The Avocado and Margarita Street Festival is the Morro Bay Chamber of Commerce's biggest end-of-summer event, and this year it is going back to where it started. For the first time since 2019, the festival returns to its original footprint on the Embarcadero itself, taking over the waterfront between Harbor and Pacific Streets for a full day of food, drink, and live music built around the two things in its name.
The basics, for anyone planning around it:
- Date and hours: Saturday, September 12, 2026, 10 a.m. to 6 p.m.
- Location: Morro Bay Embarcadero, between Harbor and Pacific Streets
- Hosted by: Morro Bay Chamber of Commerce
- Signature drink: the Avocado Margarita, a cocktail built around California avocados that has developed a loyal following over the years the festival has run
The festival has been a reliable sellout in past years, which is part of why its return to the water matters. For six Septembers it ran from a different spot in town. Now it is back on the same blocks where the old Libertine sits, closed, waiting for the city to decide what comes next.
Next Door, a Building That Has Run Out of Operators
The Libertine opened in 2012 as one of the first craft beer bars in San Luis Obispo County, and it grew from there into a full brewery, a coffee shop, a music stage, and a genuine neighborhood fixture on the water. It was not the first business to try to make something bigger out of that particular parcel, and it will not be the last.
Before the Libertine, the site's previous master leaseholder, Burt Caldwell, tried three separate times to get a redevelopment project approved there, including one attempt that folded in the lot next door. None of the three made it through. In 2020, Caldwell gave the lease back to the city rather than keep spending on plans that never broke ground. That handoff is what let Libertine Brewing Company, under owner Eric Newton, take over Lease Site 86/86W with a three-year interim lease starting that October.
Newton then spent years pursuing his own version of the same ambition: replace the aging building with a roughly 5,000-square-foot, two-story structure holding seven hotel rooms upstairs and a restaurant and coffee shop on the ground floor, with the harbor walk extended to 20 feet and a public viewing deck built into the design. The Morro Bay City Council approved demolition of the existing building in January 2024, and Newton hoped to break ground before the end of that summer. Later that year, after more than two years of permitting, the California Coastal Commission signed off on the project, overriding an earlier objection from the council itself over how the plan handled a public plaza at the street end. Newton told the council his construction documents were about a month from being submitted.
The lease he was working under carried a hard deadline: a certificate of occupancy for the new building by October 30, 2026, or the site would revert to the city. That date is now two months away, and the building has not come down. This summer, the pub's own listing shows its doors closed.
One piece of public correspondence to the city council, written as the site's lease was expiring, put the tension plainly:
"I love the Libertine and hope it remains part of Morro Bay's future, but the City must seek to turn this underutilized space into so much more."
The writer's point was that an expired lease is exactly the moment a city should stop extending grace to one operator and open the site to the wider market. Whether or not that shaped the city's thinking, it is close to what happened next.
What the City Is Actually Asking For This Time
Morro Bay's Request for Proposals for Lease Site 86/86W describes the property, plainly, as public land at 801 Embarcadero "recently operating as a restaurant and brewery." It is not asking Newton, or anyone specific, to finish the plan already approved. It is inviting any qualified individual or development team to propose something new.
The city held a site walkthrough on June 11 and a formal pre-proposal meeting on June 18, took written questions through July 16, and posted its answers by July 23. Proposals are due September 30, just eighteen days after the festival crowds clear off the same block. Each submission has to come with a five thousand dollar deposit check, and the city has said it wants ideas that go beyond the obvious. Its stated priorities include:
- An improved viewshed and building facade along the waterfront
- Optional development of a public plaza on the adjacent city-owned parcel
- Design resilient to sea level rise and coastal hazards
- Full ADA compliance
Harbor Director Chris Munson is handling the process, and whatever gets chosen still needs final approval from the City Council once a lease is negotiated. But the shape of the decision has already changed. This is no longer one operator's redevelopment story. It is an open call, and the deadline sits right in the middle of the same month the neighborhood gets its festival back.
Why This Parcel, Why Now
None of this is happening in isolation. Morro Bay is in the middle of its first Waterfront Master Plan update since 1996, funded by a $750,000 grant and aimed at resetting the city's vision for land use, circulation, and infrastructure along the water. The city held its first public workshop in November 2025 and a second in February 2026, with the update targeted for completion in November 2026. Resident feedback so far has ranged from Embarcadero parking enforcement to a possible new bridge over Morro Creek to ideas for the old power plant site, including the fate of its two iconic smokestacks, which some residents want kept and others want gone.
Underneath all of that sits a harder problem: the ground itself. The revetments that hold the Embarcadero in place were built in the 1940s when the harbor was created, and they stretch nearly ten thousand feet along the waterfront, protecting the Embarcadero, the Morro Rock parking lot, and the area past the launch ramp. A 2024 city assessment found many sections in critical or poor condition, with repair estimates running between $26 million and $55 million. In July, the Water Resources Development Act of 2026 cleared the House Transportation and Infrastructure Committee on a 66 to 0 vote, directing the Army Corps of Engineers to take on exactly that kind of repair work. A new city manager, John Craig, started in January 2026 with a mandate that includes getting stalled projects moving again.
Put together, that is a city that has secured money to fix what is underneath the Embarcadero, is rewriting the rules for what gets built on top of it, and has just decided it will not keep extending a single operator's timeline on one of its most visible parcels. The Libertine's decade of almosts was not unique. It was a pattern the city has now decided to stop repeating.
What This Means If You Live Here
For now, the practical version is simple. Put September 12 on the calendar for the festival's return to the water, its first time back on the original Embarcadero footprint since 2019. Then keep an eye on September 30, because whoever wins the bid for 801 Embarcadero will decide the next chapter of a building that two separate operators, over more than a decade, could not finish. Whatever gets built there will be the most visible change to the harbor front in years, and it is being decided by committee this fall, not by any one business owner's plan.
If you are watching how Morro Bay's waterfront is changing, whether you already live a few blocks from the Embarcadero or are thinking about what a stretch like this means for property nearby, Jerri Delfino tracks these shifts closely as part of covering the Central Coast market day to day. Let's Connect. Request your free home valuation and get a local read on what these waterfront changes could mean for your corner of Morro Bay.
