Harbor District dispute erupts

It has also not been keeping its facilities’ hours open for as long as the lease agreement states and did not pay the missing money back by the date stated on the default letter, giving the Harbor District just cause to evict them, Pruett said. 

Pelagic CEO David Westendorf, who said he was diagnosed with a rare form of cancer in June 2025, acknowledged that revenue has been down since his diagnosis, but painted a very different picture of Pelagic’s interactions with the district. 

Westendorf’s Americans with Disabilities Act accommodations due to his cancer were disregarded, he said, and the district allegedly unfairly enforced parking regulations and did not negotiate in good faith regarding the lease, which is currently ongoing and set to expire in 2028, and short-term rent relief. Pelagic supporters present at the meeting also said the district attempted to intimidate the hospitality group and the restaurants’ supporters. 

“We have tried to negotiate with the harbor nonstop for eight months. Our asks are simple,” Westendorf said.

Pelagic is requesting a rent reduction — its current rent stands at $20,500 a month, and the group is requesting a reduction to $14,500 with the promise of increasing the percentage rent paid to 5% across the board. That means Pelagic would pay either its base rent or 5% of its gross income, whatever’s higher, Pruett said. 

Westendorf also said Pelagic expects for the area to be kept clean, no competing food trucks on-site and for parking to be enforced fairly, not unduly targeting Pelagic employees. 

The Harbor District Board of Commissioners decided during the meeting to discuss the matter further in closed session and to not enforce eviction while that conversation is ongoing, however, commissioners voiced various disputes about the amount of rent reduction suggested as well as the allegations levied against the district. 

“I am very concerned about renegotiating a lease in the middle of the term of the lease,” Commissioner Kathryn Slater-Carter said. “[That’s] my initial reaction and I remain waiting to be convinced it’s not … a bad precedent.” 

Pruett also denied the allegations that Westendorf and his investors brought forth. 

“We did not selectively enforce parking, we did not target their employees, we did not intimidate them. All that stuff is false,” he said. “We’re doing what we’re required to by law. We simply can’t lower somebody’s rent without consideration. That would be like giving taxpayer money away, and we’re not doing that.” 

Pelagic’s relationship with the district was declining even before Westendorf’s diagnosis, he said, alleging the district ignored their complaints around unfair parking enforcement and food trucks. The group requested some modicum of rent relief, as well as relief from being open for a full breakfast and lunch service, in July 2025, Westendorf said, citing a systemic decline of fishing-related business tied to shorter and less profitable salmon and crab seasons. 

“As the fishing season declines, people do not frequent the harbor as much as they did,” he said. “It’s a fundamental, structural issue.”  

A Harbor District staff report shows Pelagic paying its full rent amount up until September 2025, at which point rent payments were halved and then declined to no payments from November 2025 until February 2026. 

The district has also not directly received a tenant-imposed so-called “harbor fee,” which Pruett said was delineated on restaurant menus as 4.99% of patrons’ checks going to the district for equipment, conservation and safety, a sum that would have totaled $287,859 between when the lease began in November 2023 and the end of 2025. As of now, checks do not say that, Westondorf responded. 

Westendorf also alleged that Harbor District Commissioner Virginia Chang Kiraly had said her position on the issue of having one tenant — namely, Pelagic — occupy a majority of Harbor District leasing space could be modified by a quid-pro-quo favor. 

“She wanted to be on the Coastal Commission and felt like a meeting with the governors’ office would escalate that. She said her position on the single tenant could be modified,” he said. 

Chang Kiraly soundly denied the allegation, and said while she did take a meeting with an individual with a relationship to the governor, it had nothing to do with her vote on the issue. 

Pelagic investors and advocates at the meeting also pointed to prior San Mateo County Civil Grand Jury reports that had called for the dissolution of the Harbor District, as a 2018 report that found Commissioner Tom Mattusch sent inappropriate images to a commissioner before he was on the commission. Westendorf said Pelagic would be filing a complaint with the San Mateo County Civil Grand Jury. 

“We want the citizens of the county to clearly understand the specific mismanagement and conduct of the San Mateo County Harbor Commission,” he said. 

For his part, Pruett said all information on the situation was publicly available and he hoped residents would take the time to read those reports. 

“People can say whatever they want. Hopefully people will actually read reports and see the truth,” he said. “I’m not going to sit here and say negative things about a tenant. I’m going to do my job.”