Suit claims Newport hindered business

Newport Beach acted in an arbitrary manner and hindered business at the Newport Beach Brewing Co. when it modified the restaurant’s permit this year, according to a lawsuit filed by the Balboa property’s owners.

The lawsuit, which attorney Stephen M. Miles filed with Orange County Superior Court on Friday, claims the City Council imposed unfair restrictions on the Brewing Co. after a small group of residents complained about noise and drunken patrons. The Brewing Co. seeks a removal of the restrictions — which include a limit on the restaurant’s dining space during the day on weekends and a mandate to keep hourly records of food and liquor sales — and $1 million or more in damages.

Jerry Kolbly, the owner of the Brewing Co., was not available for comment Wednesday, but Miles said the city had played loose with the law in an attempt to reduce alcohol sales in the neighborhood. The ongoing back-and-forth with the city, he claimed, had a negative impact on the restaurant’s revenues.

“There’s a lot of patrons who are confused about what the city’s intentions are, and because of that, the Brewing Co. has lost business,” Miles said.

Assistant City Atty. Aaron Harp said the Brewing Co. had been treated fairly throughout the last year’s hearings and the City Council had no agenda against the restaurant. He expected Newport Beach to prevail in the case, which lists the city, the City Council and five council members as defendants.

“The Brewing Co. went through an extensive hearing process,” Harp said. “There is no bias or any reason the council would take action against them.”

The recent troubles over the Brewing Co. began in January 2006, when a small group of residents in the neighboring Cannery Village Lofts complex complained to the city about unruly behavior of patrons at the restaurant. The Planning Commission held a series of hearings on the matter and the Brewing Co. agreed to make some minor operational changes, but Kevin Weeda, the developer of Cannery Village Lofts, appealed the commission’s ruling.

The City Council voted to alter the Brewing Co.’s use permit in March, then nullified the decision when members determined the hearing had not been adequately posted and the council did not have legal authority to limit alcohol sales. A revised set of changes passed the council in August.

Weeda, who has a business in the complex he designed, denied the claim in the lawsuit that he had an interest in purchasing the Brewing Co.

“The contention that we are behind it [residents’ complaints] for financial motivation is absolutely untrue,” he said. “We have no interest in their property. We had an opportunity to buy that property seven years ago and we declined.”

MICHAEL MILLER may be reached at (714) 966-4617 or at [email protected].