SLO bowling alley developer faces new lawsuits

May 20, 2019

One of the two brothers who was behind the failed San Luis Obispo bowling alley project is facing a lawsuit alleging he cheated an investor in the project out of $500,000, as well as other claims related to credit card debt and not paying workers at a new downtown SLO restaurant. [Tribune]

Jeremy Pemberton was a managing partner of the Discovery SLO project, which consisted of plans to build a bowling alley and entertainment venue in downtown San Luis Obispo. Faced with allegations of hundreds of thousands of dollars in unpaid bills, Jeremy Pemberton and his brother, Joshua Pemberton, scrapped the project.

Discover SLO, the Pemberton brothers’ company, had been leasing a downtown SLO building from Jamestown, an international real estate firm. Jamestown sued Discovery SLO, alleging the business had failed to pay rent for more than a year and owed the real estate firm at least $750,000. The lawsuit has now been settled.

Carlos “Xavi” Fajardo, a 28-year-old San Luis Obispo resident, invested $500,000 in the Discovery SLO project. As the project was falling apart, Fajardo demanded to inspect Pemberton’s financial records, which he had the right to do under the partnership agreement, the investor claims.

After receiving no response, Fajardo sued Pemberton in June 2018, stating in the suit that he had no idea about the status of the project or how his funds had been used. A court judgment entered in May determined Pemberton now owes Fajardo about $593,000.

Michael Pick, who is representing Fajardo, said a hearing will take place on June 5 to determine what assets Pemberton and his affiliated entities have that can be used to compensate Fajardo.

Pemberton claims the terms of his agreement with Fajardo were that “no partner shall demand or receive a return of such partner’s capital contribution.” Pemberton also stated the partnership was contemplated to be a 25 to 35 year liquid asset.

The developer also claims Fajardo never asked to see his financial information and that he provided the investor regular updates about the project’s planning. Pemberton now says the $500,000 investment could go to a project elsewhere and that he is currently exploring possibilities in cities such as, Austin, San Diego, Miami, Sacramento, Portland and St. Paul.

In addition to allegedly owing Fajardo nearly $600,000, Pemberton owed American Express $87,652 on March 24, 2019, according to a separate lawsuit filed by the credit card company. Pemberton does not deny owing American Express money, and he said he is working out a payment plan with the company to pay off his credit card debt.

Additionally, Pemberton’s new San Luis Obispo venture, a recently opened downtown tapas restaurant called Branzino, is already facing allegations of failure to pay employees.

Hannah Broyles, a 22-year-old former back waiter at Branzino, said she was owed about $450 and has only received $287. Broyles also said she was sent home from work early multiple times, apparently as a way to cut costs.

Broyles said she has heard a lot of people are having problems with Pemberton at Branzino, and it seems like he is scamming everyone he possibly can.

Pemberton says some checks initially bounced, but according to his accounting records, all employees have now been paid what they were owed. Pemberton also says he expects the restaurant to be highly profitable and that he plans to open 15 to 20 more Branzinos across the country.

In the past, both Jeremy and Joshua Pemberton faced numerous similar allegations. The Pemberton brothers’ previous business dealings resulted in claims of fraud, a bankruptcy involving $1.4 million in unpaid wages and charity pledges that were never fulfilled.

In 2011, the brothers filed for bankruptcy claiming $9,750 in assets and $1,431,201 in liabilities, including unpaid wages to employees, clothing expenses, dry-cleaning bills, jewelry store debt and money owed to nonprofits.