The City of San Luis Obispo is asking City Council on Tuesday night for an additional $80,000 to fund a court-appointed receiver to handle the current state of affairs with the owner of the property at 1150 Laurel Lane, where the popular Bang the Drum Brewery and other businesses had to vacate in 2025 due to dangerous building conditions.
Honestly, I thought they had already exhausted their options at this point, because its been going on for so long, nearby resident Greg Wakefield told KSBY.
If the City Council approves the amount, the total legal fees thus far will stand at $223,000.
City Attorney Christine Dietrick is scheduled during the regular meeting to present her report recommending the increase in funds allocated to the matter, which has yet to be resolved. If approved, the funds will be allocated to Civica Law Group in its duties as the receiver after the outside counsel, almost immediately learned the matter was even more complex than anticipated with two separate pending lawsuits involving the property…
The case involves a bankruptcy proceeding, and per Dietrick, more than 18 lien holders with more than 40 liens. The case involves a building deemed to be unsafe with more than 270 code violations.
In addition to the brewery, several other businesses also lost their space. HASLO, the Housing Authority of San Luis Obispo, and SLO City Church both also had to vacate the premises, with little notice.
The recommendation states, In May 2025, after the commercial property at 1150 Laurel Lane had several years of code violations, substandard building conditions, and failure to make progress following the issuance of an extensive notice of violation and order to abate, the City Council made the decision to file, in the name of the City, a civil complaint seeking the appointment of a receiver to take control of the property. A link to the recommendation with the financial details can be found here.
Members of the public are allowed to provide a maximum of three minutes of public comment at City Council meetings. Item 5f will be heard during the regularly scheduled meeting on Tuesday, May 19, at 5:30 p.m. in Council Chambers at 990 Palm St.
Ive seen some of their struggles like going back and forth with the City over the last few years, Wakefield said. It could have been handled better from the property owners side. It seems like theyve had like, what, a decade to figure out some of these issues?
Im While most tenants were forced out, KSBY has confirmed that two businesses, Ernest Packaging Solutions and Empire Electrical, continue to operate on the north side of the building. In the image below from Google Earth, you can see that the building is on a diagonal, with the area Bang the Drum and SLO City Church located on the lower side of the building, and the area Ernest and Empire occupies on the upper side of the building. The City confirmed to KSBY that the issues that need to be addressed do not apply to the warehouse areas where those two businesses operate and only affect the lower areas.
City spokesperson Whitney Szentesi told KSBY, Dangerous conditions have continued, and other code enforcement efforts have not worked, so the City is pursuing legal action that includes a request to approve a health and safety receivership, which would allow a court-appointed receiver to take steps to address health and safety concerns and bring the property into compliance.
Bankruptcy expert Adam D. Stein-Sapir at Pioneer Funding Group tells KSBY, “In April, Laurel Creek announced that they had found a new lender, CapMoon, to pay off the old mortgage debt from CPIF totaling more than $44M and invest new money to complete the project, he said. This was a welcome development because the court denied their reorganization plan in March.”
KSBY has reviewed the documents Stein-Sapir referenced, in which Laurel Creek, LP filed a status report on its Chapter 11 bankruptcy filing with the Central District of California – Northern Division, Case No. 9:25-bk-10985-RC, on April 22, 2026. The case currently sits before the Hon. Judge Ronald A. Clifford III in Santa Barbara.
KSBY Community Reporter Jessica Roe will follow up on how the council votes on Tuesday night and on any other developments in the case.
If you have relevant new information about this story, or would like to submit a different NewsTip, you can reach Jessica via email at jessica.roe@ksby.com.