Quick Take
Over the past two years, a conflict between the owners of Capitola Bar & Grill and their landlord have escalated into multiple lawsuits. Now, owners Lasalle and Michelle Strong say they have been "pushed to the limit" and are closing the business at the end of the month.
After more than a year of tense disputes and legal battles with their landlord, the owners of Capitola Bar & Grill say they plan to close the beachfront restaurant at the end of January.
The restaurant is located on a coveted space along the Esplanade in Capitola Village, with windows and a patio that overlooks Monterey Bay, the historic Capitola beach bungalows and Soquel Creek. But just a few months after it opened in August 2021, owners Lasalle and Michelle Strong and their landlord, Steve Yates, began to disagree over whether the restaurant was allowed to host live music.
This week, the Strongs announced on Instagram and Facebook that in light of the ongoing conflicts that have escalated into multiple lawsuits, they made the difficult decision to close Capitola Bar & Grill at the end of the month.
“The constant harassment and intimidation from the landlord and his son … has created an unsafe environment for our family,” a post on the restaurant’s Facebook page reads. “Although we are suffering a financial loss of over $500K, vacating is the only option. The legal fees have become a burden on our livelihood, leaving us no choice but to close the doors.”
The friction began in April 2022. The landlord’s son, Ryan Yates, lives in an apartment above Capitola Bar & Grill and made numerous noise complaints to the Capitola Police Department related to what he said was loud live music not authorized under the Strongs’ lease. The Strongs argued that they had a right to play live music at the restaurant, and that it provided a vital income stream by drawing guests during business hours and days that would otherwise be slow. Steve Yates maintained that the commercial lease forbade live music due to the restaurant’s proximity to three residential apartments in the same building.
By February 2023, the Strongs had stopped all live music performances, but the conflict continued. By the end of the year, both parties were in arbitration for multiple lawsuits relating to payment of rent and an unlawful detainer regarding the Strongs’ residential lease of an apartment in the building, among other things.
The Strongs have alleged publicly that they believe Ryan and Steve Yates’ actions are racially motivated because Lasalle Strong is Black and that the Yates’ ultimate goal is to drive the Strongs from the building. Both Steve and Ryan Yates have said the accusation that they are racist is untrue and harmful.
There were several incidents in the past week that contributed to the decision to close, Michelle Strong said.
On Jan. 3 and 5, Capitola police responded to two noise complaints at the restaurant, one during a private party at 12:30 a.m. and the other at 10:30 p.m. during dinner service. Capitola Bar & Grill is allowed to remain open until 2 a.m., said Michelle.
On Jan. 3, there was a verbal altercation between Lasalle Strong and Ryan Yates in which Yates called her husband a “rapist,” Michelle Strong said. She also alleged that Ryan Yates stomped on the ceiling with enough force that a bottle on the liquor rack fell, nearly injuring her.
“That just makes me feel unsafe even being here and the fact that he will go out of his way to yell at Lasalle in the hallways,” said Michelle.
After a recent hearing in one of the cases between the Strongs and Steve Yates, the couple decided it would be best to walk away rather than prolong the fight to a potentially unfavorable outcome. Michelle said Lasalle told her, “Let’s just make it our choice.”
One of the disagreements currently moving through the legal system is whether Capitola Bar & Grill still has a lease. Steve Yates says that the original lease was terminated eight months ago and that Capitola Bar & Grill is a holdover tenant occupying the space illegally since July. The Strongs say they are using that to their advantage to leave without being accused of breaking the lease.
“He’s saying we don’t have a lease, so there’s no financial loss as far as him saying we owe him for the next five years,” Michelle Strong said.
Steve Yates said he found out that the Strongs plan to close Capitola Bar & Grill when a friend sent him a post from the restaurant on Instagram. He said the Strongs haven’t discussed the closure with him and he’s unsure how it will affect any legal proceedings.
The restaurant has been in default for nonpayment of the Strongs’ lease since February 2023, Steve Yates said, and the loss of income from the rent has required him to draw on lines of credit to pay property taxes, utilities and other bills for the building. “They’re leaving a wide swath of unpaid bills,” Steve Yates said.
He dismissed the accusation that he has made the Strongs feel unsafe. “I’ve in no way, shape or form made them feel unsafe,” Steve Yates said. “It’s absurd.”
It’s unclear what the next month will look like for the business, or what the future holds for the Strongs, said Michelle.
Without a commercial lease, the business has no value and can’t be sold. The Strongs could take their liquor license and open another business at some point in the future, but right now they are looking for steady work to pay down their debts.
“That was my resolution to say, ‘Fine. You don’t want us here and we’ve been pushed to the limit to where we no longer want to be here. Let’s walk away,'” said Michelle. “He’s not allowing that. So we really don’t have any other choice but to take what we can and just close the doors and move on.”
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