Blue Shell's Sweets and Treats closed on Aug. 31, 2026. By the time The Tribune reported it two weeks later, the next tenant had already been named. The Cinnamon Roll Place, run by April Perez, plans to open in that Embarcadero space in December. If that holds, the gap between owners will be about three months.
A short walk up the waterfront, the former Libertine building at 801 Embarcadero has been closed since January 2024. That's more than two and a half years. On Sept. 30, the City's latest call for someone to redevelop it closed with one proposal.
Both are Embarcadero storefronts, and the difference in timing comes down to who controls the next step. A small shop can pass between private owners in a season. The 801 site is public land and water leased out by the City of Morro Bay, so its future moves through the Harbor Department's lease process. Most of what's changing on the waterfront this fall fits somewhere between those two speeds.
The fast lane: shops that turned over in weeks
The Blue Shell's handoff is the clearest example. The owners announced the closure on social media without giving a reason and thanked the community for "the amazing years." By early September the windows and doors were covered, with a sign saying the shop was closed. The Cinnamon Roll Place plans to keep the space familiar to anyone who stopped in for something sweet. According to The Tribune, Perez's plan includes scratch-made cinnamon rolls, a coffee bar, chocolates and an old-fashioned ice cream counter. December is still a planned month, not a confirmed opening date.
Crab It While It's Hot moved even faster, without a long gap in between. The seafood-boil restaurant opened this summer at 517 Embarcadero, Suite C. It's open noon to 8 p.m. Monday through Thursday and 11 a.m. to 8 p.m. Friday through Sunday. The Tribune's own coverage disagrees on the exact date: the article text says Aug. 1, and a photo caption says July 1. Either way, it's been serving for at least two months.
The same pattern shows up off the water. On Main Street, The Second Line opened its first permanent Morro Bay shop at 897 Main St. in early September. It serves beignets and coffee daily from 7 a.m. to noon in the space Savory Smoke left earlier in 2026. Out on Quintana Road, Big Rock Tabletop opened in June at 620 Quintana Road as a games shop and play space, open daily from 1 to 9 p.m.
The middle lane: a permit, then a wait
Some changes need a public sign-off before they can happen. In its Oct. 2 update, the City reported that the Planning Commission had approved Morro Bay Oyster Company's conditional use permit, which allows changes for a retail space. The update gives no opening date and no details about what the retail space will offer. Anyone hoping to buy oysters there will have to wait for the company to announce a date.
A broader change for waterfront businesses is also in this lane. The Harbor Advisory Board has been working on the framework for a Tidelands Business License Program. It went to City Council for feedback, and staff planned to bring it to the Planning Commission on Oct. 20 for a Major Modification Permit. City staff say they're working with the Embarcadero Master Leaseholders and the Chamber of Commerce to finish the program before it returns to Council. The public material so far doesn't say what the program will require of businesses. Still, it's the clearest sign this fall that the rules for Embarcadero businesses are being written alongside the leaseholders.
The slow lane: 801 Embarcadero
The Libertine corner shows how slowly the lease process can move. In 2024 it looked settled. The plan replaced a 4,677-square-foot building with a 5,206-square-foot building holding a restaurant, a coffee shop and seven hotel rooms upstairs. It also came with public features that would have changed that stretch of the water. New Times listed them as a public plaza at the street-end parking area, a 15-foot harbor accessway, a daytime-use floating dock and a second-floor public lookout.
Here's how the site went from an approved plan to a single bid:
- January 2024. The Libertine closed for what was reported as a temporary closure to make way for the rebuild.
- June 13, 2024. The California Coastal Commission acted on the project. In August, City Council took up the plaza conditions again after the Commission's decision overrode its earlier deferral.
- July 31, 2025. The lease on Lease Site 86/86W expired.
- Late 2025. A City waterfront update reported that the previous leaseholder had decided not to renew the lease for the approved restaurant and hotel. The Harbor Department posted a call for proposals with a Dec. 18, 2025 deadline.
- May 21, 2026. The City issued a new request for proposals and described the building as vacant. In its July answers to proposers' questions, the City confirmed that the plan is to demolish the building.
- Sept. 30, 2026. The request closed. One proposal came in, and staff said they'd review it "in the coming days."
The City didn't drop the old plan. The 2026 request says a new proposal with the same building footprint, mix of uses and public benefits would "likely benefit from a streamlined permitting process" by using the existing approvals. At the same time, the City was asking for an extension of the Coastal Development Permit, which was set to expire in June 2026. We haven't found a public record showing whether that extension was granted.
The plaza is no longer guaranteed either. In the July question-and-answer document, the City said a plaza "remains an option," but applicants may propose a different use for the street end. So the public pieces of the 2024 plan are back up for discussion.
The steps from here are set out in the request. Staff screen the proposal. A panel reviews and interviews qualified proposers. The panel then recommends a choice to City Council. As of the City's Oct. 2 update, the proposer hasn't been named and no meeting date has been announced. The request's tentative schedule calls for proposals to be evaluated in October 2026 and estimates the winning proposer's approval for October or November. On that same schedule, a new lease is estimated for fall 2028, with site redevelopment estimated to begin in winter 2028.
The same process covers the harbor's public spaces
The Harbor Department also maintains the public waterfront between the businesses, and that work is moving slowly too. The October update says Measure Q/E money is paying for cleanup from the Harbor Office to the Rock, with replacement fire pits already bought and faded signs due to be replaced. Plans for the Boat Launch Replacement are being finished after a recent land and water survey. Crews are replacing water lines and fixing electrical and dock problems at the Dune Street slips.
The bigger repairs depend on federal funding. On Sept. 16, the House passed the Water Resources Development Act of 2026 by a vote of 415 to 9. It changes Morro Bay's original 1945 federal authorization to include repair and maintenance of breakwaters, revetments and seawalls. The City points out that the bill still goes to the Senate and doesn't fund the work yet. At the north end, the Morro Bay Maritime Museum has drawn up a concept plan to expand at 1210 Embarcadero, according to a City project sheet updated in January.
What's on the waterfront this month
October's events are spread along the same stretch of water:
- Oct. 10, 8 to 10 a.m.: Morro Bay Rotary's 5th Annual Rubber Ducky Derby at the inlet by the Galley and Hofbrau restaurants, 900 Embarcadero.
- Oct. 12, 5:30 p.m.: Maritime Movie Night, two documentaries shown as a benefit for the Maritime Museum at the Bay Theater. The museum's calendar lists tickets at $15.
- Oct. 24, 3 to 5 p.m.: The Witches & Warlocks Paddle, a costumed paddle meetup. The City's Oct. 2 update notes that the City doesn't participate in or organize it.
- Oct. 25, 11 a.m. to 3 p.m.: The Maritime Museum's free Family Fun Day at 1210 Embarcadero, with more than 30 exhibitors planned.
On a walk from the Ducky Derby at 900 Embarcadero to Family Fun Day at the museum, you'll pass covered windows where The Cinnamon Roll Place plans to open in December. You'll also pass the Libertine building, which is waiting on a Harbor Department review of the one proposal the City received.
At Franklin Real Estate & Rentals, we keep an eye on the waterfront lease sites, permits and openings that shape day-to-day life in Morro Bay. If you own a home or rental property here and want a clear sense of what changes like these could mean for its value, request a home valuation and we'll go through it with you.
