Morro Bay officials shut down business competitors of council members

February 17, 2014
red tag placed on the former Morro Bay Sun Bulletin building last Halloween

Red tag placed on the former Morro Bay Sun Bulletin building last Halloween


(Editor’s note: This is the first in a series about allegations of abuse of power and selective enforcement of laws in Morro Bay. Several videos, showing police and planning staff interacting with people who have business interests in the city, are attached at the bottom of the story.)

Morro Bay officials have targeted new start-ups in the city that would have competed with businesses operated by current and past city council members, several businessmen say.

Morro Bay’s planning and permitting offices, city attorney’s office and the police department have taken part in the effort to restrict competition, the businessmen said.

The Morro Bay Police Department set up a plan to shut down a proposed arts center in the old Morro Bay Sun Bulletin building, a department memo obtained by CalCoastNews shows.

The arts center was the brainchild of Jim Davis and Rick Holliday. The two signed a master lease for the 8,000 square foot Sun Bulletin building at 1149 Market Avenue in May 2011. They planned to create a center for the arts, which would incorporate music, an art gallery, offices and some type of eatery.

The Morro Bay building located at 1149 Market Ave.

The Morro Bay building located at 1149 Market Avenue

When they tried to submit their building permit and business license applications, city staff called them into an impromptu meeting with then-Planning Director Kathleen Wold. Wold refused to accept their applications and architectural plans and instead ordered them to construct a tavern or hotel at the Market Avenue building, Davis and Holliday said.

“I remember distinctly her saying you can’t do music. You have to do a tavern or hotel,” Davis said.

Wold then threw the plans down on a planning table and ordered the pair to meet with the city attorney and police chief, Davis and Holliday said.

Davis and Holliday then met with Rob Schultz, who was Morro Bay’s city attorney, and then-Police Chief Tim Olivas. John Weiss, owner of Coast Electronics, who was present at the meeting, confirmed that the meeting occurred.

Schultz also ordered Davis and Holliday to put in a bar or motel, the two men said. No options were allowed.

“It felt intimidating,” Davis said. “The tone was harassment.”

Schultz went so far as to warn them about going into competition with established business owners in Morro Bay, Holliday said.

Schultz denied the allegations, calling them ridiculous.

Holliday said a councilwoman, who owned a business across the street from the building, too, threatened him about going into competition. Carla’s Country Kitchen owner Carla Wixom, then known as Carla Borchard, sat on the city council from 2008 to 2012, when she unsuccessfully ran for mayor.

Shortly after signing the lease, Holliday was eating breakfast in Wixom’s restaurant, he said. Holliday told Wixom that he and Davis were thinking of putting in offices, hosting bands and creating some type of eatery.

“She said straight up that will never happen,” Holliday said. “She said you will never get a competing business there.”

Wixom denies the conversation occurred, saying she never spoke with Holliday about his business plans.

But, Holliday said she told him several times that he would never open a competing business and made jokes about him being unable to get permits and a business license.

By the end of 2011, Holliday ended his lease, saying it was impossible to operate a business at the location.

Davis continued his efforts to start up the arts center. In early 2012, he was joined by Los Osos Mexican Market owner Rey Diaz. Diaz moved into the downstairs, with Davis retaining the upstairs. Diaz planned to open a Mexican market in Morro Bay. His Los Osos location sells groceries and includes a grill, where customers eat Mexican food.

On Jan. 14, 2012, Diaz arrived at the building to move in his belongings. Just after Diaz arrived, police officers did too, according to graphic artist Toby Schultz, who was working in the building at the time.

The officers said they were responding to a report of an illegally parked car but proceeded to question Diaz about the business he was putting in the building, Schultz said. An officer then asked Diaz if he would be going into competition with Wixom.

“‘So, you’d be in competition with Carla?’ That was exactly what he said,” Schultz recalled.

After questioning Diaz, the officers walked over to Wixom and spoke with her for at least ten minutes, Schultz said.

A second witness, who asked to remain anonymous because of fears of retaliation, said the officers spoke with Wixom for about 20 minutes following the interaction with Diaz. Before the police went to question Diaz, Wixom was pointing them in the direction of Diaz, the source said.

Wixom said she does not recall the incident and that she would not have directed the officers to Diaz. She said, though, that she is close to police officers and talks to them frequently.

Diaz would not comment on the incident. Diaz does not want to upset city officials, several sources said. Diaz is concerned that it might jeopardize his use of the building.

The Morro Bay police log for the day shows that officers were responding to a “suspicious person incident.” City Attorney Anne Russell did not provide the names of either the person who was considered suspicious or the complainant when CalCoastNews requested the records under the California Public Records Act.

Since then, Diaz had begun to construct the market and gained preliminary approval to open the business. He has not received permission from the city, though, to operate a grill.

As Diaz flirted with opening the market, Davis continued to pursue his dream of hosting bands in the upstairs for private video production and small performances. Davis managed to host several bands in the building and even shot a music video there. City officials said he could only use the property for storage.

On Oct. 31, 2013, the Morro Bay Police Department issued a memorandum planning a raid on Davis’ activities. In the memorandum, Police Commander Bryan Millard wrote that Davis and Holliday had been hosting parties with live bands and that a disturbance would likely take place that evening. Millard directed the officers who would respond to the party to obtain a signed noise complaint from a neighbor, issue a citation and call the city building inspector and fire marshal, who had volunteered to come out to the scene after hours.

Although Holliday had been gone from the building for nearly two years, Davis hosted performances and had planned a Halloween party with a live band that night.

Paula Radke, who lives in a nearby commercial building called the police to complain about the noise. Radke told CalCoastNews that she had been instructed by neighbors to make the call before the event began. Radke says she lives legally in the building, but city files show that she applied for, but never obtained a permit allowing residential use.

Police officers Gene Stuart and Sue Gomes responded to the noise complaint and told her to sign a noise complaint, Radke said.

Stuart and Gomes called building inspector Brian Cowen and waited outside the building for more than 20 minutes before approaching Davis, a video made the night of the raid showed. While waiting for Cowen to arrive, Stuart ordered the band’s drummer to continue playing music.

“Go rock one more,” Stuart said on video. “Just do the song.”

Stuart and Gomes later issued Davis a disturbing the peace violation, charging him with a misdemeanor.

Officer Gene Stuart speaking to Jim Davis

Officer Gene Stuart speaking to Jim Davis

When Cowen arrived, Davis would not allow him to enter the building. Then, without inspecting the building, Cowen declared the entire 8,000 square foot structure unsafe and ordered everyone to leave, the video shows.

“They essentially shut us down,” Davis said. “It’s a total violation of property rights and free enterprise.”

Cowen said that the building tenant and party host had violated state codes. But Cowen did not cite the particular codes, the video shows.

“Per state law, you can’t use this building for any use other than storage,” Cowen said to Davis on the video. “By having these people in the building, you are endangering them.”

But Cowen refused to explain how he had made the determination that the building was unsafe.

Cowen red-tagged the building. Red tagging requires the city to shut off the water, gas and electricity and bar the public from entrance. Cowen later posted a notice citing state building and fire codes.

A few months later, the San Luis Obispo County District Attorney’s Office dropped the disturbing the peace charge against Davis. Millard, though, said in an interview that his officers acted appropriately.

“We do work with the planning department as a partner agency in enforcing the laws,” Millard said.

The memo resulted from a meeting of the code enforcement committee, Millard said. The committee, which is comprised of representatives from different departments, including police and planning, meets to discuss code enforcement issues in the city, Millard said.

Code enforcers do not act on behalf of council members, Millard said.

“There is no direct action where a council member would talk to an officer and action would take place,” Millard said.

Building owner Clark Kayler, a Sacramento-based woodworker, said having his building red tagged was like getting slapped with a scarlet letter.

“They are allowed to just label a building unsafe,” Kayler said.

Kayler said the city has selectively enforced legal codes against him since he purchased the property in 2009.

Morro Bay planners have denied all business proposals for the Sun Bulletin building that occupy a cumulative total of more than 2,000 square feet. The city cited parking requirements as the primary reason for the occupancy restriction, even though the property includes an adjacent gravel lot.

Additionally, city records show that businesses have occupied the entire building on multiple occasions, dating back to its construction in 1969. The original business, a marine supply manufacturer and retailer, even used the parking lot for business activities, according to Morro Bay resident and former store employee Eddie Sylvester.

“When we were there, no one could park in the lot because we had it full of equipment,” Sylvester said. “The city uses parking against people when they want to.”

Market Ave. during business owners

Market Avenue during business hours

Other businesses on the block have grandfathered status and have no parking requirements. Radke’s business relinquished its parking lot in a property sale and remained open. Still, about one half of the parking spaces on Market Avenue are unoccupied during business hours.

Morro Bay has singled out his building, Kayler said.

“The scrutiny is not there for some people, and the scrutiny on my property never ends,” Kayler said.

Both Kayler and Morro Bay Councilman Noah Smukler, point to a 1986 city plan as evidence that the building owner has the right to make use of his property. The Beach Street Area Specific Plan calls for the protection of commercial activity in the area despite the existence of neighboring housing.

“It clearly shows that building has a right to be utilized,” Smukler said. “We have a specific plan that was approved and the community has adopted.”

The plan also called for the city to create parking stalls perpendicular to the sidewalk on Market Avenue to increase the amount of on-street parking. The city created the parking stalls on bordering Surf Street but never did so on Market Avenue.

One resident in the adjacent neighborhood is Councilwoman Nancy Johnson. Johnson’s Morro Avenue house with an adjacent vacation rental looks down on Kayler’s building.

Several individuals involved with the building allege that Johnson, also a political ally of Wixom’s, has frequently surveyed the property and rallied neighbors to oppose business activity there.

“I heard Carla and Nancy were really active down there in trying to fight that,” Smukler said.

Johnson said she never opposed businesses at the building and rather worked to lure them in.

The building is currently vacant, with the exception, of containing some Mexican market equipment. No new tenants have arrived since Halloween night when the building was red tagged.

Holliday and several associates have filed suppression of business and harassment claims against the city. Davis plans to do so as well, he said.


Audio and videos of the Halloween night incident:

Audio of Morro Bay Police officer Gene Stuart telling a man wanting to attend the Halloween party at the Sun Bulletin building that he gets a free pass to urinate in the street. Stuart does not want the man to tip off the building tenant that police are outside.

Video of Morro Bay Police officer Gene Staurt explaining that he has been up 36 hours and knows something is going on, but he is not sure what that something is because of his lack of sleep.

Morro Bay Police officer Gene Stuart says he is going to give a noise violation, but then orders the band to play one more song.

Morro Bay building inspector Brian Cowen says Jim Davis is violating state code though he will not divulge what code is being violated. He then red tagged the building.

Like CalCoastNews on Facebook and get updates on Josh Friedman’s Morro Bay series.

MB Police Memo by CalCoastNews

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Rick Holliday to mbactivist1 and all others! We have put up a YouTube Channel called; “MORRO BAY CORRUPTION”.

Videos will began being posted this weekend for everyone in Morro Bay to see what your police and city officials are doing to the citizens and business of Morro Bay!

We will start with the video taken by Brian Der Garabedian on 10/31/2013. The video will show the whole story, pay close attention to what is said and done by Morro Bay police officers, Gene Stewart and Sue Gomes and city building official, Brian Cowen.

We will post a new video each week on the “MORRO BAY CORRUPTION” YouTube site. And just a note for all of you in Morro Bay……JIM DAVIS just filed his claim with the city of Morro Bay yesterday (Friday 3/12/2014) and will file a lawsuit against Paula Radke and others soon!

This is the case where Commander Mallard stated to CalCoastNews that he had “not seen the video evidence taken that night, but stated that his officers did everything right”. Really? Commander, you did not even review the video and yet you sent “this case” to the D.A.? Perhaps you should be fired for failure of your duty to the citizens of Morro Bay! Watch the video Commander! Your officers are lairs, your officers are committing crimes and you are their leader!

A “top cop” official who does not even look at all the evidence (so you say). Even the D.A. dropped this case because it had no merit, period! And now you have another lawsuit, nice job commander!

Perhaps it’s time for new leadership in Morro Bay, including the police Dept. Did the Chief of Police see the video(s), city attorney? Did “they” OK” the case to move forward? If so, “they” should be removed from their positions of power because it is obvious that “they” are abusing their positions!

Stay tuned, the fire works are just about to start! And wait till Joseph Goodwin gets his claim in next week along with at least three other lawsuits (not claims!) that have been completed! Get yer popcorn out and grab a seat, your going to get the real stories with video and not the “I did not see the evidence you presented to us ” B.S. that Morro Bay police and city officials are used to handing out to the citizens of Morro Bay!

Update! The city of Morro Bay wrote me a check for over $4,000 to settle the first case against them. The second case is going through the court system. This case is for violations of my Civil Rights and the price tag is a little bit more, $1,000,000. My plan is to use the money to educate the police dept., and citizens of Morro Bay about the law and duties of a sworn police officers and to open up a free law clinic to help those who have been illegally harassed or intimated etc. The city of Morro Bay (because of me!) enacted a new ordinance (587) that clarifies the filing process for claims against the city of Morro Bay. Because of the overwhelming evidence against city staff, employees etc., the interim city manager hired a private investigator to review our allegations. If your interested in finding out what the investigator had to say…….ask the city manager to view the findings, they should be public record and available to view M-F during normal business hours. I’m sure most of you saw the video of officer Stewart sleeping in his car while on duty! This video and 60+ more were given to “other agencies” to review as well! The police chief, her commander and many other police officers continue to “conceal the actions” of fellow officers, city staff and employees without punishment and true consequences for their “illegal actions”. Do not let anyone take away your rights “illegally”, under the color of authority! Fight back! Don’t just “sit back” because the only thing that will happen if you do nothing is……..NOTHING! One man/woman can make a difference. I did and you can too! Stop taking/listening to “UNLAWFUL ORDERS” given under the color of authority! Know your rights! Educate yourselves! Lets hold those in office, those with a badge and those with the power to govern to the very laws that were put in place to guard against the very tyranny of those who continue to abuse their power(s) against the citizens of Morro Bay! Stay tuned!

Good Morning. Very little of this article is true. I was there. Nancy Johnson had nothing to

do with my complaint about the noise coming from next door. Permit denials had nothing to

do with competition. No police officer made me sign a complaint. Many neighbors were in

pain about the noise and people squatting in building. Many complaints were made over the

two years this went on.

Jim Davis believed he was above the law and established a “Speak Easy” as he called it. By the very definition of the words, you should get it. ” I can do what ever I want here and

I know it is illegal”. Maybe they couldn’t get permits because what they wanted to do was

not permitted in the neighborhood. Maybe they should have gotten their permits before

beginning their business. Maybe they shouldn’t have rented out places for people to live in

the building

I am not living on Market Street. I know nothing about parking problems. There are plenty of businesses on Market with no off street parking. Where would you put it? As things are,

currently on Market Street, there is plenty of parking for all.

Sorry Jim. Sorry Rick. I know you will continue to harrass me until I die for wanting you to

comply with code. l am taking steps to protect myself. Do your thing…..

Paula Radke…..When we rented the building from Clark Kayler we were told that Clark had rented you a space to store your things. You lied to us about the rent you were paying him. You also lied about the fact that you sub-rented additional space without telling or paying Clark for it! When Jim and I informed you that we needed to have you list us as additional insured you flipped out! You then told us that you would move your stuff out in 30 days, that never happened as you stated that you were at a show and could not get your items out in time. We explained to you that we would remove your items for you if you did not remove them in a timely manor. In 2011 when we rented the building you were living in your building, period! Your claims that the police did not make you sign the citation against Jim Davis do not match the 911 calls and video tape from that evening, including the fact that you state in the 911 tape that you “have to get dressed” to meet the officers! Why? Were you sleeping in the building? Also you have had illegal work preformed by illegal contractors working illegally in the city of Morro Bay on your building and you know we have the tape to prove it! Your a liar and the truth will come out and very soon as your going to be sued by Mr. Davis and others, good luck with all the karma coming your way Ms. Radke…… and just a note to you……I am not “harassing you until you die” as you quoted, you see Ms. Radke to me, your already dead!

It’s Friday morning. I turn on my computer to find dirt and find no dirt. I go to CCN to find dirt – no dirt. I go to the Youtubes to find dirt – no dirt. I really need that dirt.

Fertile dirt in Morro Bay to be sure! Just have to dig a bit. Role up your sleeves, the treasure (lies) within your grasp.

I don’t have time for digging, or roll-playing – I WANT DIRT NOW!

Rick Holliday to slophocles…….UPDATE! Well this is sweet!

The city of Morro Bay lost the first (of many) lawsuits (14SC-0102) to me when Judge Barry Labarbera ordered the city of Morro Bay to pay me; $4,301.98 in damages and found the city’s “design immunity” defense to be full of, well…. holes and cracks like the sidewalks in Morro Bay!.

The second lawsuit is May 30th, 2014 but the third lawsuite should be very interesting as it will be filed in FEDERAL COURT. The ACLU is looking at the case right now, they say its “cut and dry case with strong video/audio/document evidence”, stay tuned!

Also, our YouTube site: morrobaycorruption is back up and running after some very powerful folks asked us to take it down for a minute while they did what “they needed to do?” So were are going to post lots of videos (un-edited) and please tell your friends and neighbors to pass the information around!

It’s just another smear campaign created by Jamie Irons, Christine Johnson and Noah Smukler to distract from all the damage they’ve done to the City of Morro Bay in since they’ve been the council majority. They have no problem lying and making up stories about people who have ever accomplished anything positive for this community. They’re whole strategy is to make up things to divert voters attention from all the damage they’ve done in such a short period of time in office. They care nothing about what is best for the City. It’s all about their preconceived agenda and the fact that none of them have any experience running anything larger than a trust fund or the girl scouts. I feel so bad for all of the long term residents, on fixed incomes, who won’t be able to afford to live here after they’re done. You know, there are some people who have lived there whole lives here and this council will force them to lose all that they’ve worked for their entire lives. These are bad people.

Yes taxpayer, we are friends with many elderly here in MB that are scared to death as we are now coming upon a new sewer that will be costing $200.00 a month. Irons, C Johnson, and Schmuckler could care less about those less fortunate here that are living on a fixed income. After all look what happened in Los Osos.

It appears that YOU are doing a smear campaign, taxpayer. Please do provide some facts regarding the accusations you are making.

I don’t believe the article quotes any of the Council majority, which likely means they were not even interviewed for the story. That makes your claim that this story is their propaganda look pretty silly. CCN is not in the business or the habit of spreading propaganda for anyone. They investigate and they print the truth.

As for people not being able to afford the new Council, it’s the old one they couldn’t afford – the one run for the benefit of our local good old boy/girl network, at the expense of everyone else. Thanks for wanting truth over gossip, stay tuned, our channel is up and lot’s of videos coming! CCN had it right all along, everyone will see! and we shall have part three in just a few!

Hey Taxpayer……Do you think I’m a Jamie Irons fan? That I’m working for them? That somehow all of this is a “made up lie”? Blog your B.S. from Aaron’s (the rock) page of garbage, it will fit right in…..

I’M BACK!!!!!!!!!!!!!!!!! morrobaycorruption on YouTube!

You want the dirt. Call David Vogel, my attorney at; 540-7100 leave your address and I will make sure you get some copies of the FULL VIDEOS of that night and others! Morro Bays greatest hits, part 1.

Thank you, Rick for offering to make the videos available. Some have implied that CCN uses only clips, and not complete videos, to fool the reader. This openness on your part should demonstrate that neither you nor CCN are hiding anything.

New video(s) on morrobaycorruption on YouTube

Also quick update…..City of Morro Bay lost the lawsuit against me! Round two is May 30th, with a Federal Case coming soon…….

Stay Tuned!

Alright, rickholliday – it’s Thursday afternoon and I don’t see any dirt. You promised me dirt.

Go back and look Josh always says “first in a series” and then never produces anything more. Its because he does his investigation after the story and then figures out its not true and does not know what to do.

Dream on.

No, it’s all true! Stay tuned, lot’s more coming!

Your logic is funny! 1st. The city of Morro Bay LOST their 1st lawsuit to me.

2nd. The city lost their motion to strike last week against me and I was allowed to amend my complaint and the case moves forward for violations against my civil rights and more! Josh and Calcoastnews did a great job and the fact of the matter is that the story IS THE TRUTH! BUT……..’YOU CAN’T HANDLE THE TRUTH”! Stay tuned!

Rick Holilliday and these stories are starting to remind me of Richard Simmons

Yes we have hear so many stories by CCN that were so called “breaking” and new information……that only have seemed to sizzle out. When I ask whatever became of such stories my comment always get deleted. Why is that?

This is one of the most boring TBID meetings I’ve ever seen. And would someone please get Jayne Behman a space-heater.

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