Some small-business owners in Morro Bay are feeling short-changed as the city rolls forward with beautification efforts to attract tourism revenues and stimulate the local economy.

At the center of the issue is a new city ordinance barring the use of temporary flags, banners, and A-frame “sandwich board” style signs anywhere in the city. Such an ordinance, the city says, is necessary to preserve its “small town fishing village” image and eradicate “visual blight”—and it’s actually been on the books for years, but seldom enforced.

But for small businesses around the city, especially those in areas where potential customers might cruise by without noticing—as is the case with many businesses along Highway 1 in North Morro Bay—the ordinance is just another obstacle to weathering a particularly tough economy.

Some business owners with locations off the beaten path even go so far as to allege it’s an example of the city playing favorites with the main players on the Embarcadero, and a City Council that has left unfulfilled promises of helping the plight of small business—platforms three new council members ran on in the last election.

In late April, after months of discussing possible strategies to enhance beautification efforts, the council found that one of the issues most frequently brought up was the proliferation of A-frame signs along the sidewalks of the Embarcadero, the heavily frequented main drag, crammed with heavy foot traffic and relatively narrow sidewalks.

On May 24, the council unanimously approved an ordinance banning the signs and temporary flags on sidewalks and private property. Councilmembers said they understood the burden such an ordinance might place on small businesses and established regulations for signs deemed more aesthetically hunky dory—projecting, or “pub-style” signs, which extend horizontally from the face of a building and hang over the heads of passers-by.

“We haven’t taken something away without giving something back,” Mayor Bill Yates said of the pub signs.

Many smaller businesses on the Embarcadero, even if they agree the sidewalks had become cramped, argue they can’t afford to install the new signs, don’t have the physical space for them, or both. And businesses off the Embarcadero question why the ordinance covers the entire city.

“In all honesty, this is an Embarcadero issue, and it smells like some rotten fish that we all have to suffer because of it,” said Liz Bednorz, owner of the Beach House Bistro in North Morro Bay. “I have a very limited time span to get you off the highway, and I repeated this many times to the council, but we were just told point blank that this is going to happen.”

Craig Schmitt, CEO of the Morro Bay Chamber of Commerce, told New Times he’s heard a slew of complaints over the ordinance, mostly from businesses in North Morro Bay.

“As a result we’ve tried to stress the point that one size does not fit all,” Schmitt said. “We’d like to see a more balanced approach.”

The all-encompassing nature of the ordinance isn’t the only reason some business owners say the city is playing favorites with the Embarcadero. On April 12, the council approved a motion to pull $25,000 from the city’s harbor fund (a special pot of money set aside for the Harbor Department) to pay for new uniform banners, which hang from lampposts along the Embarcadero. According to staff reports, the funds were used to design and draft four separate types of banners—one for each season—and two sizes for each because the Embarcadero has two lamppost sizes.

The city justified the use of Harbor Department money for the project because there was $40,000 available due to the vacancy of the Harbor Director position, which has yet to be filled. Yates said the use of harbor funds for the project was appropriate, telling New Times it was a one-time deal, and that the project benefits the harbor and small businesses around it.

Not everyone—especially some people who work with the Harbor Department—liked seeing the city get grabby with that money for beautification. Lynn Meissen, a member of the Harbor Advisory Board, told the council the money should be invested in safety and infrastructure projects.

“It’s a matter of priorities,” Meissen told New Times. “And there are some in the Harbor Department and Board who would agree with me.”

Furthermore, funding sources for continued maintenance of the banners are still up in the air. Already, at least one banner had fallen down and needed to be repaired, but Parks and Recreation Department Director Joe Woods said it probably just wasn’t installed properly and was an easy fix.

Most everyone acknowledges that the Embarcadero is the major force in the city’s economy, but shop owners whose businesses lie off the beaten path remain skeptical of the city’s reasoning, pointing out that Yates owns a share in the popular seafood restaurant Windows on the Water, and Councilman George League is president and owner of the Great American Fish Company, both of which are on the Embarcadero.

“I don’t know how they can say this is a conflict. All we did was enforce the regulation,” League said, adding that he was among the first to take down his own A-frame.

“They just got out of hand,” he said of the signs. “Something had to be done.”

Councilwoman Carla Borchard also owns Carla’s Country Kitchen on Beach Street, a block from the Embarcadero.

“I feel it’s that ol’ boys network,” said Joe Yukich, owner of Osaka Joe’s Sushi in North Morro Bay, whose business also sits off Highway 1. “I can understand they want to make the city as appealing as possible in this poor economy, but I don’t know what the game is here.”

In response to the discontent, the council and planning commission will hold a public workshop to discuss whether something can be worked out with businesses that feel they’ve been hurt by the ordinance, though that meeting hadn’t been scheduled as of press time.

Staff Writer Matt Fountain can be reached at [email protected].