The owners of The Harbor Restaurant have filed a lawsuit against the City of Santa Barbara for “unconscionable” rent pricing, according to court documents. The City of Santa Barbara plans to vigorously defend its position.
John Thyne, a local attorney and co-owner of the restaurant, filed the lawsuit on December 5, 2025 at the Superior Court of California in Santa Barbara County concerning the current lease agreement.
The restaurant’s location, at 210 Stearns Wharf, is owned by the City of Santa Barbara and is leased by Santa Barbara Harbor Restaurant Inc, which includes Thyne and his wife Olesya along with Gene and Carolina Sanchez.
The restaurant owners are requesting to reform the lease entered on February 7, 2002 and states this original lease was agreed upon at a time when economic conditions, visitors to Santa Barbara County, and the restaurant landscape of Santa Barbara was vastly different than today.
The Harbor Restaurant’s current rent is $61,403.70 per month on top of another $6,000 per month to pay off $358,000 in back rent while repairs were being made. The total of the back rent is due by December 2028. The repairs were due to rain and flooding that damaged the property, prompting an almost year-long closure beginning in early 2024.
The owners argue the lease includes terms that have become “economically obsolete” and arose from a mutual mistake by the owner’s predecessor and the City. They also state when the lease was executed, the parties could not have anticipated that a non-decreasing minimum base rent with annual increases—untied to any reduction in the business’s gross sales and unadjusted to market rents—together with tenant-paid triple-net charges (property taxes, insurance, and maintenance), would ultimately exceed 20% of the restaurant’s gross receipts, which is unsustainable, according to court documents.
“Plaintiff asserts that the Lease must be reformed because its current terms are unconscionable in light of the City’s actions that have dramatically decreased Plaintiff’s gross sales,” the lawsuit states.
Some of these listed actions include allowing development of the Funk Zone and other nearby areas resulting in hundreds of new competing restaurants, failure to invest in tourism related efforts, failure to ensure the prior tenant of the maintained the space, adoption of harmful parking policies on the wharf including increased costs and a cancellation of the parking validation program, allowance of unpermitted food trucks and kiosks, failure to adopt a business improvement district as in other areas of town, and failure to abate the homelessness pandemic.
The lawsuit also states the owners did not pay property taxes for three years and this fall the county seized over $304,000 from the restaurant’s bank account. That money was set aside to make payroll and settle with the city if rent negotiations succeeded. However, the seizure prompted owners to use their personal money to make payroll, according to the lawsuit.
Additionally, the lawsuit states the 2024 repairs totaled an investment of over $1.5 million by the owners that included fixing infrastructure, severe mold, outdated wiring, rotted wood, failed framing, and broken equipment.
Thyne argues that 10% of gross sales receipts is a fair amount of rent, but currently the lease is costing owners “more than 20% of the gross receipts of the business which is unsustainable in a restaurant.”
The City of Santa Barbara responded by stating it plans to vigorously defend this lawsuit.
“The City of Santa Barbara has reviewed the complaint and believes the allegations are without merit. The city intends to defend this matter vigorously. The city has not received required rent payments for several months and is pursuing its own legal remedies,” stated Santa Barbara City Administrator Kelly McAdoo. “This property is a public asset, and the city has an affirmative obligation to manage it in a manner that serves the public interest, not solely the interests of any single tenant.”
The History of the Harbor Restaurant
The lawsuit included a detailed history of the restaurant and Stearns Wharf, provided below:
“Stearns Wharf was built in 1872 by John Peck Stearns to transfer cargo and people to and from ships in Santa Barbara during low tide and to connect Santa Barbara to the world. It remains the oldest working wooden wharf in California.
Along with the Santa Barbara harbor itself, this wharf was dedicated to the City of Santa Barbara in 1925 by the State of California. In 1926, Max Fleischmann offered the city $200,000 if they would match that investment, construct a breakwater, and extend the wharf to the coastline, which the City did. Today, Stearns Wharf is one of the most well-known locations in Santa Barbara.
In 1926, The Harbor Restaurant was first created as the Santa Barbara Yacht club. In 1941 the Yacht Club was purchased by Senator Alvin Weingand and movie star Ronald Coleman who converted it into a restaurant.
The locally famous Castagnola family, headed by George Virginio Castagnola, who began as a door-to-door fish salesman and eventually opened many successful restaurants including several restaurants called the Lobster Houses, purchased this business in 1963 and made it an internationally acclaimed restaurant.
Ten years later, in 1973, a portion of the property burned in a fire and it sat empty for eight years. Then, in 1981, the Williams family purchased the business, restored the building, and brought back the largest restaurant on Stearns Wharf while earning millions of dollars.
In 1989, John Scott added this restaurant to his large portfolio and he ran it along with his family, under the auspices of ScottCo., a successful multi-property restaurant portfolio, for almost 33 years until December 2021. In December 2021, Eugenio “Gene” Sanchez, purchased The Harbor Restaurant from ScottCo. and then, in November 2023, John and Olesya Thyne joined the ownership group.”
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This looks like a ridiculous position on Thyne’s part. Certainly he and his partners did their diligence on the ongoing rental cost for the restaurant before they bought the place? They got in at the end of 2023.
Sounds like they are in over their head, made a poor investment, and are now desperately suing the city with their focus being on a lease structure that has been place for twenty years.
Come on.
Maybe they thought things would get better economically instead of worse. I’m not sure anyone saw this coming – except all of us that told everyone else it was going to if that dude won again. Everyone is gonna feel the pain but it’s not everyone’s fault. Low IQ rules! Idiocracy baby!!!
Sounds about right. That’s being said, if the City wants another for lease sign on a long-term vacant property smack dab in tourist central, they can dig their heels in and get just that.
I agree with you.
A look at Monterey’s barren and mostly empty cannery row is where we are heading if the city leaders cannot come up with viable plans to return interest in State Street and our harbor area. Covid is over, open State Street and make rents reasonable for business owners on city owned properties.
Your cult leader is also doing a great job of damaging the U.S. tourism business–we’ve always gotten a LOT of well off foreign tourists in this town. Many of those people don’t want to come here anymore because we are perceived as a violent culture and the administration has become increasingly hostile to anyone outside of the U.S. The latest initiative to require five years of personal data from those seeking to spend money in our country is causing even more people to swear off coming here.
You do realize that Putin is pulling the strings of the orange one and the goal is to do to the US what happened to Russia after the Afgan years, right? Hope the Constitution holds out somehow, but doubtful. Too much money burning it down.
And the personal data includes biometrics, including DNA!
Hey, if you want a modern, efficient police state for your dictatorship, you need that.
You think that Trump is responsible for tourism in Santa Barbara? When did you last travel outside of the U.S.? I do frequently and Europe has massive problems, Asia is doing a better job. Everyone still wants to come to the U.S. which makes your point invalid.
When was the last time I travelled outside the U.S? Eight days ago. And three months before that. Four countries since September, thanks for asking.
“Everyone still wants to come to the U.S.”
So explain the drop in tourism since Trump took office.
LOL ZIPS you’ve never been to Europe. You’d have to fill out a passport application for that. They’re tough!
Read the news zippy, Canadians down 23%: https://www.bbc.com/travel/article/20251211-where-are-all-the-canadians-going
EU > 5% https://www.aljazeera.com/news/2025/9/1/foreign-tourism-to-the-us-drops-amid-trump-era-policies‘
‘Everyone still wants to come to the US’ is BS: read the news and educate yourself. The President’s policies hurt our local economy directly, full stop. His rhetoric and policies have consequences.
Well we’ve got the same # of cruise ships showing up here in SB this fall as last fall according to the City website. Devastating tourism impact by Trumps policies there, huh?
Keep Calm and Carry on…
It almost hurts to read your comments….
Cruise ship passengers are a TINY fraction of our overall tourism. Not even 1%
Here are some facts:
Cruise ship passengers coming ashore per year: about 30-50K per year
Total tourists per year: about 6-7 million
(https://www.edhat.com/news/council-votes-to-limit-santa-barbara-cruise-ship-visits-to-20-per-year/ and https://www.edhat.com/news/visitors-spent-2-24-billion-in-santa-barbara-south-coast-last-year/)
Now, do the math. Let’s even be super liberal for you: 50K is what percentage of 7 million?
Answer: .7%
LESS. THAN. 1. PERCENT.
But yeah, you just proved there’s no decline in tourism in SB, despite EVERY study/news story proves otherwise.
When will you get sick of being schooled? I can do this all day, every day.
Oops, sorry BASIC. I meant to do the math in your favor.
50K / 6 million – .8%
So, still…… less than 1%
Dude can’t think logically and assumptions rule the day. Your assumption: the same number of ships means the same number of people.
LOL. You think they would stop running these ships because of a 10% drop in passenger numbers?
Nope.
Beyond that, the information is clear–there has been a drop. People are choosing not to come because of your guy.
Anecdotal from me, but I was in three countries in Europe a few months ago and talked to quite a few people who said there was no way they’ come here while Trump is in office. Some very nice Canadian ladies in particular who said they always came to Palm Springs in the Winter and no way in Hell would they now. They said that they were so enraged by the way Trump derided Canada, calling it the 51st state,, blah blah blah, that they and their friends would never. They said they felt sorry for us.
Here’s some info on the Canadian trend.
down 23–24% in early and mid-2025 for the same time frames compared with the previous year.
Yahoo Finance
+1
This sustained drop is much larger than typical year-over-year tourism fluctuations.
💵 3. Economic impact estimates
Canadians were the single largest group of foreign tourists to the U.S. (about 20 million visits and ~$20 billion in spending in 2024).
U.S. Travel Association
A decline of ~24% in Canadian visitors in 2025 has contributed to significant revenue loss—reportedly up to ~$29 billion less tourism spending than expected.
Travel And Tour World
Laughable, dude. Let’s blame SB tourism’s slump on our President! And throw in the Harbor restaurant’s problems while you’re at it. Genius. It’s amazing how sour libs are these days.
If you don’t understand how Trump’s racist immigration policies affect tourism, you’re even…. never mind. You know.
It’s genuinely shocking how stupid the guy is.
Or is it?? He just spits the same dumb, mindless, and ignorant drivel as way too many in our society.
PRELIM – true, his/her type’s stupidity shouldn’t be that shocking. Those who still support Trump fall into one of only 2 camps: absolute, unintelligent morons and just plain bigots. However, I think Alex is referring to how, despite his/her claims of academic and professional “success” in fields that require a high degree of intelligence, he/she manages to spout out such blatant lies and gut wrenchingly unintelligent nonsense on a daily basis here and expects us all to believe he’s/she’s accomplished all he/she says.
LOL, and you really think that Santa Barbara is not a part of the United States? Because a lot of people have stated very clearly that they will not visit the USA while Trump is in office. And of course the latest nonsense of telling all visitors to cough up five years of personal data is going to hammer tourism here.
You can not possibly believe that there is zero impact. Have you ever left your house?
“how sour”
You’re the most sour human being most of us have ever encountered.
It’s true. I’ve never come across anyone, aside from Trump, who so casually lies, intentionally sounds uneducated and cries about things that don’t affect him/her on a daily basis. Funniest is when he/she tells others to get a hobby or make friends. I don’t know a single person who would enjoy spending more than a minute with a person like this. Cruel, bigoted and a proud liar. Gross.
I can’t help but think of the Elephant Bar property that closed in 2013. A new restaurant tried to open but city wanted more and more money, the restaurant said no and closed down. At one point the city offered $250K to settle litigation but not sure what happened. I drove by it a few months ago, the building is collapsing in to ruins.
Dave Nancarrow is rolling in his urn.
CITIZEN – drive by it again. It’s not collapsing. In fact, a new place is opening there soon – The Goleta Spot. Will be pretty cool.
Crazy though how it failed even with tons of cars driving by every day. Imagine that?
CitizenSpeculativeBaloney
Stupid people can’t help but think stupid thoughts.
How can 10 percent of GROSS sales not be fair? That’s not from Profit, but SALES. It has to be a partnership with the city for sure. I wonder who else is going to come in and take it over and make enough to stay in business? Elephant Bar anyone? I sure miss that place. I do hope they can come to some agreement. I’d also like to see another building empty because the city is out of control, and things aren’t going to change until it all crashes. We’re seeing that on a national scale right now. People that aren’t paying attention or paying attention to the misinformation out there are going to get hit with a ton of bricks in then next year. Good luck to us all.
IT’S ALL BIDEN’S FAULT. OH AND OBAMA TOO!!
“Mr. Thyne, did you voluntarily sign the lease?”
“Yes, but…”
“Case dismissed.”
They have a larger problem than high rent. Their food is lousy!
John’s Investment vs. the City’s Pension plans for it employees. Sorry John the Government employees who sit and drink miso soup all day are the new rich. I am sure if you fatten them up with free food for lunch once a week for a year they may reconsider
You really are quite delusional, and aptly named.
perhaps some of the drop in tourism is due to the deteriorating condition of some of our most iconic cities NY, Chicago, LA, SFO to name a few. We knew of a couple that was looking to buy a house, potentially in SB. Once they saw the condition of Santa Barbara & State street, they decided against it. The deterioration and violent crime making the airwaves is undeniable.
You must exclusively consume con social media bullpuckey.