Morro Bay history divides naturally into two eras:  Before the Embarcadero (BE) and After the Embarcadero (AE).  World War II marked the end of the first era and the beginning of the other.

The Navy built the Embarcadero to serve a wartime purpose, but it created a massive change in the conditions of the harbor that will forever define the character of Morro Bay. The Navy’s wartime project provided a solution to the bedeviling problem that had hindered Morro Bay since its inhabitation by European settlers: the lack of harbor improvements that would make it reliably and safely navigable.

The construction of the Embarcadero’s revetments, the fill behind them, and the breakwaters that at least somewhat tamed the harbor entrance, created a permanent economic resource that people wanted to exploit when the war was over. Safe access to the ocean provided opportunity.

But who owned this wonderful resource?  Who had the right to use the asset?  The Navy used Federal government funds to build the harbor infrastructure, but they did not consider the issue of ownership, which was ignored and postponed in the urgency of war. After the war, however, the issue had to be resolved, and the new land left behind by the Navy attracted a lot of claimants.

Morro Bay in a “State of Nature”

When the Spanish first arrived on the Central Coast (Juan Cabrillo sighted Morro Rock in 1542), the rock was an island. The rock stood in the mouth of Morro Bay, a shallow estuary draining the Chorro and Los Osos creek watersheds to the ocean. There was a channel on the north and east side of the rock that separated it from the mainland, and a channel on the south side that separated it from the sand spit. Tides and storms changed the depths and currents in both the outlet channels and the estuary rapidly and frequently, so entry to the bay was often difficult if not impossible for anything but shallow draft boats. Even in the late 19th century, the U.S. Navy warned against entering the harbor without a local pilot.

These conditions persisted well into the 20th century. Quarrymen built a small railway across the north channel in the early decades of the century to cart rock quarried from Morro Rock to boats waiting to be loaded, or to the mainland. In the mid-1930’s the WPA built the first permanent causeway across the north channel, and its effects on regularizing the tides and currents through the south channel raised the hopes of a safer harbor. But as yet there were still no breakwaters to control the impact of waves and currents on the south channel, and entrance to the harbor remained hazardous.

Despite its shortcomings, the bay had always provided shelter from the heaviest weather, and visionaries could see how valuable it could be for shipping, fishing and recreation if only the harbor could be improved. Settlers established farms, homes and businesses on the bluffs over looking the bay. Fishermen and traders built structures next to the bay and on the tidelands, including wharves and working buildings. Beginning in the 1880’s tourists from the hot San Joaquin Valley visited Morro Bay for its cool ocean air. Commodities like lumber and agricultural products were shipped through the harbor on small steam boats, using local pilots for the passage through the harbor mouths.

The titles to the bluff top land people used were rooted in the original patent conferred on Franklin Riley, usually considered the European founder of Morro Bay, in March 1872. Riley’s patent extended down to the mean high tide line.

In the decades before Pearl Harbor, Morro Bay residents working along the waterfront accepted the ever-changing tidelands and adjusted as needed.  Variations in the boundary lines of their properties were not a major concern in day-to-day life. Yet it is certainly true that people who owned parcels next to the bay believed that they owned sometimes the submerged lands that extended into the bay.

Morro Bay and the Defense of the Homeland

For many years during the first third of the century, local leaders had worked and lobbied for improvements to the harbor to increase their ability to exploit it commercially. They floated some very fanciful ideas to turn the bay and sand spit into highly developed land for fishing, fun and living. Repeatedly, the Army Corps of Engineers did feasibility studies that dashed the hopes of the boosters. The sheltered pier at Cayucos grabbed most of the local shipping, and the natural harbor at Avila Beach (Port Horford) was considered a better option for a bigger sea port.

During the 1930’s military planners were already thinking about how to pursue a war against Japan, and it rested heavily on sea power under the strategic initiative called War Plan Orange. Even before Pearl Harbor, the Army and Navy were building training bases and structures on the Central Coast that would support war in the Pacific. An article in the Telegraph Tribune from September 21, 1935 declares that San Luis Obispo County would be a “center of defense activity” in a Pacific war. The next year the annual national war games featured an amphibious mock invasion of Morro Bay.  By December 1941 many military structures and bases were already in place along the California coast.

Military planners revisited the idea of building a working harbor in Morro Bay to support the war. But this time, there was no issue of commercial competition from other nearby ports, and the war provided the urgency and a flood of money to make it happen. The US Navy used taxpayers’ dollars from the Federal government to build the structures we now call the Embarcadero in 1942 and 1943, creating new land for a Navy base (the actual work was done by the Army Corps of Engineers and private contractors).

As the war evolved, planners envisioned an offensive strategy of hopping across the Pacific one island at a time, to eventually close in on the home islands of Japan. The island-hopping tactic required thousands of landing craft putting millions of soldiers on the beaches (think Iwo Jima).  Success depended on having landing craft crews and assault troops well-trained on real beaches. 

Therefore, in early 1944, the Army Corps of Engineers (ACE) started building an Amphibious Training Base (ATB) on the Embarcadero. The revetments trace perfect lines along the natural waterfront almost from Morro Rock to the south end of where Tidelands Park is today, defining the large flat areas next to the water where the base buildings were put.  ACE dredged fill from the shallow estuary, creating more depth in the harbor. The main base buildings were built where the power plant is today, and included the T-piers and other elements of the working harbor that we still use. In one and one-half years of activity, the Navy trained over 45,000 soldiers in amphibious warfare on Morro Bay and the surrounding beaches.

After the war, the Navy decommissioned the ATB and began the scramble to remove, relocate and redistribute all the assets it had accumulated on the base. Some remnants like the quonset huts you find at a few locations around the city are reminders of the base.  But it is mostly gone now, given over to other uses or simply open land.

In the very early postwar years, you have to imagine the Embarcadero as mostly empty. The long-established abalone fishing fleet did not begin to use all the facilities that were available. Slowly, fishing boats arrived from San Pedro and San Francisco and other ports along the coast to use the newly available infrastructure in the lightly fished waters off Morro Bay. Businesses like the original Harbor Hut restaurant opened in the later 1940’s to serve the fishermen and tourists who began to return. On the site of the base, there was a race track that advertised to locals and tourists.

This placid situation would not continue.

Public Trust or Private Enterprise?

The new land and harbor infrastructure forced the issue of ownership. Private owners who had owned bluff top (‘upland’) properties before the war saw the potential for commercial development. Many public officials and office holders thought the property built by the Federal government should belong to the public as a Tidelands grant. The tug of war this started escalated into a protracted court battle that did not end until the settlement of the Pipkin lawsuit in 1968.  The product of this conflict is the modern Embarcadero we know today.

Establishing the Tidelands in Morro Bay

Immediately after the war, county and city decision-makers began arguing about what to do with the new harbor in Morro Bay. Boosters hyped the harbor as being worth millions in property value and income, needing only a little (or, maybe a lot) of private development to realize riches. Other voices favored making the new harbor a public good. Supervisor Alfred Ferrini of San Luis Obispo said “…individuals have no right to come in and take advantage of construction work…done by the Federal government for the benefit of all.”

The State Lands Commission (SLC) weighed in on May 10, 1946 by giving San Luis Obispo County a 15-year lease on most of the Embarcadero for $2,000 per year plus a percentage of the revenue from subleases.  The SLC assumed that the County would act as the developer of the new land, though it was skeptical about how well it would do the job.

It is not entirely clear that the SLC had standing to make this lease.  However, the state legislature put legal heft behind the decision by passing Senate Bill 1558 in 1947 granting the tidelands management to the County. A survey was performed to define the area of the grant.

What are the Tidelands?

Going back to English common law, the “tidelands” are the lands between high and low tides, submerged lands, and navigable waterways. Tidelands may include land created by fill, like the Embarcadero. These lands are considered public lands owned and controlled by a sovereign government on behalf of the people. When California became a state in 1850 it inherited the tidelands concept from the United States’ legal tradition.

“Public Trust” Land Grants

California uses statutes (legislation) to make land grants to local agencies like the City of Morro Bay to develop the tidelands on behalf of the people. Grants range from small ones like Morro Bay to five very large harbor developments. By law, agencies are prohibited from selling or allowing a transfer of tidelands ownership to private parties, though this has happened. There is a potential for conflict between public and private interests over valuable waterfront property.

Beginning in 1947, the legislature clarified the policy purpose behind tidelands grants as being for the development of harbor facilities for commerce and navigation, with accompanying facilities as needed for access and support. The permitted uses under the Public Trust Doctrine are generally water-dependent, and explicitly exclude residential uses. The specific statute governing the Morro Bay trust were modified a couple times in the 1950’s and 1960’s to clarify that recreation-type uses were permitted, but the general purposes of development dependent on the water still hold.

The tidelands grant in Morro Bay encompassed a huge amount of land, new and old. In addition to most of the land created by fill, and almost up to the bottom line of the bluff, it covered tidal and submerged land south of the current Tidelands Park, a big part of the northern bay, the north end of the sand spit, and a huge swath of open ocean out to the three mile limit (see map). The exact boundaries of the grant were established by survey, but these have been slightly modified over time by subsequent surveys to help resolve disputes such as the Pipkin lawsuit (see below). Included within the general area were some privately held properties that remained in private hands.  

The Navy base was not part of the tidelands grant because it was not declared surplus until early 1948. At that point, San Luis Obispo County negotiated a purchase of the base for a little under $80,000. The purchase included the parcels at the northeast bight of the revetment where the power plant is now, as well as the T-piers and other elements of the harbor infrastructure that the Navy had built.  

By late 1948 the table was set for the emergence of the fight between the private owners of upland parcels along the bluff and the administrators of the Tidelands grant. However, the development of the Embarcadero was so slow during the 1950’s that property owners were (apparently) not motivated to challenge the public trust in court. 

In its role as administrator of the public trust, the County of San Luis Obispo was not well organized or aggressive about lease management, and the leases that did exist were neither highly profitable nor carefully scrutinized. Even up to 1960 there were undeveloped open spaces along the Embarcadero, especially on the southern end of it, so demand wasn’t strong enough to make the supply a value worth a fight.

May E. Pipkin, et al, versus Trust Administrators

Then, for some reason, May Pipkin pulled the trigger to file suit against the County in 1961 in a quiet title action to terminate the County’s authority over the tidelands (filed in the Superior Court of San Luis Obispo, case 31598). Eventually, the Pipkin suit had 23 plaintiffs, each of whom laid a claim to part of the new land on the Embarcadero. The plaintiffs included property owners and lessees from all parts of the Embarcadero, whose properties were located both under the bluff and on the newly built waterfront.

At the outset of the lawsuit, the defendant in the Pipkin suit was the County of San Luis Obispo as the legally appointed trust administrator of the tidelands grant. That role was later transferred to the City of Morro Bay after its incorporation in July 1964. Despite some resistance from the City, courts ruled in 1965 that the trustee role had in fact transferred to the City upon incorporation. 

During this timeframe, the City and County were also embroiled in a series of lawsuits over allegations that the County had failed to perform its trustee duties, adding to the uncertainty over the status of the leases which continued to exist through this entire episode. In fact, one point of contention was that the County had entered lease agreements for below market value, which some might construe as a gift of public money. It was a very messy time, legally speaking, for the City and County.

The basic argument of Pipkin was that the upland owners of lands adjacent to the easterly edge of the Embarcadero had a valid claim to the new land. They believed their pre-war claims had always extended some distance into the tidal flats, including submerged lands. Some argued they owned submerged lands right up to the sand spit. The similar Thomas, et al, lawsuit (dismissed in 1968 due to inaction) stated clearly that the Franklin Riley 1872 patent included all the land to the mean low tide line, even up to the sand spit.  The location of the low tide line based on the Riley patent was highly ambiguous because the natural conditions that defined it no longer existed.  What does that mean when we cannot see or measure the line of the tide on the land?

The counter to this was that the State legislature inherited the common law notion of the tidelands  when it joined the Union, and had established a tidelands trust policy consistent with that. The 1947 statute creating the Morro Bay trust is within this long-established legal tradition. In addition, the 1947 grant to the County specifically indicated the new land of the Embarcadero from fill is included when it explicitly says that both “filled and unfilled” land are part of the trust.

Where are the lines?

The eventual resolution of the Pipkin case was based on a compromise achieved in March 1968 that adjusted the boundary of the tidelands grant in the center section of the Embarcadero between South and Dunes streets. It created the general division that stipulates that parcels east of the easterly edge of the Embarcadero Road are private, and those west of that line are part of the tidelands grant to be administered by the City.  In legalese from the settlement resolution, “Said boundary line is… the Easterly line of Embarcadero Road lying between South Street and Seventh Street (now Dunes Street)…”

The horse trading between the City and the plaintiffs took a long time (1961 to 1968).  In the end, the outlines of the deal are that the City gave up claims to the property east of the Embarcadero and the private property owners gave up claims to the westerly parcels forever. The City also agreed to make $175,000 in improvements to the Embarcadero between South and Dunes by 1969, financed with general obligation bonds, with no contributions from the owners. 

The Pipkin settlement resolution contains some legal “force” to get to an agreement; in other words, it contains the stipulation that the State Land Commission has the authority to assert a decision. The ambiguity of the western boundary of the low water mark in a state of nature (that is, before the Embarcadero was built) could never be established objectively given the many dramatic changes in the bay since 1872. None of the parties had the ability to resolve this ambiguity on an objective basis.

Therefore, the settlement states that the State Land Commission has the authority to “establish the low water mark…by agreement, arbitration, or action to quiet title, wherever it is deemed expedient or necessary.” Regardless of the “facts” of the situation that might arise from competing surveys, the SLC provided the authority to force the decision, described above. 

The Boundary Agreement, which was eventually signed by 19 of the twenty-three plaintiffs, stipulates that the boundary is permanent and the 19 plaintiffs quit claims to property west of the defined line. It was executed upon signature of the authorized representative of the State Lands Commission.

The settlement that still defines the border between public and private on the Embarcadero was set in 1968, even though subsequent changes (e.g., in 1981) were made for a few parcels. This agreement resulted in a number of new leases on the waterfront, known for all time as the “Pipkin” leases. They were for 50 years, the maximum length allowed under State law, from 1968 to 2018. The Pipkin leases are now in discussion for new development, or the new development is already under way. 

The Aftermath of the Pipkin Agreement

On March 28, 1968, the Sun Bulletin (a weekly paper published in Morro Bay) reported that the “Pipkin Settlement Dazzles Council.”  Then City Attorney Peter Kardel brought the just-completed settlement agreement to the Morro Bay City Council as an item on the regular public session agenda, rather than for discussion of the 50-page document in a “secret session.” The majority of the Council—Mayor Jack Surfluh, plus Council members Wayne Bickford, Paul Bowen and Lila Keiser—voted in favor of the agreement, and praised the mayor for bringing it to completion.

But not everyone favored the settlement. Councilmember Wes Mallery complained that the Council could not act in good faith, not having had time to review the full document. His argument “met only derision from his fellow councilmen,” with the Mayor claiming he could scan it in 15 minutes.

In the same issue of the Sun Bulletin, Bill Harwood accused the Council of having “rubber stamped” the City Attorney’s settlement without question, and that the result was “fraught with peril for hard-pressed taxpayers, who…will pay through the nose for the thrown-together pre-election sellout.” Presumably, Harwood referred to the part of the settlement that guaranteed substantial infrastructure improvements on the Embarcadero without requiring a financial contribution from the private owners.

The “pre-election sellout” instantly became an election campaign issue (city elections were held in the spring of 1968). Wes Mallery, the lone Council voice opposed to the settlement, published a letter in the Sun on April 4, 1968 supporting Joe Giannini and Fred Donohoo, both of whom had previously announced their  candidacies in January. Mallery said that “Morro Bay cannot survive another four years of the mistakes and government we have had,” citing increasing tax rates and proposed development on the sand spit as the key problems. Giannini and Donohoo campaigned on controlling spending, citing loose management by the current city government.

On April 9th the citizens agreed with the insurgents. Giannini was elected Mayor and Donohoo to the Council. The new Council met in regular session for the first time on April 16th, and wasted no time tearing into City Attorney Peter Kardel who had negotiated the Pipkin settlement just weeks earlier. In its April 18th issue, the Sun Bulletin reported that Mayor Giannini challenged Kardel to show why his invoices for over $13,000 during the Pipkin negotiations in March 1968 were justified, and exclaimed “I think we’ve been taken in Morro Bay, Mr. Kardel.” Giannini asked for a closed session discussion about personnel issues, “within 24 hours.”

Between the time of the first session of the new Council and the publication of the Sun on April 18th, the Council fired both Attorney Peter Kardel and city Administrator C. Ted White. Kardel continued to serve for 30 days on an hourly basis as attorney on tidelands issues, with Council support over the objection of Giannini.

By the end of 1968, Giannini was at odds with the rest of the Council over police and Brown Act (open meeting law) issues. The new Council had confirmed the tax increase proposed by the previous Council. And the Pipkin settlement endured.

The Pipkin settlement has permanently determined the division of public vs private ownership of the Embarcadero, even though within this framework there are continuous battles over who is responsible for what. This is not likely to change, either.