"Sorry South Oceanside" is the message Zell and Gary Dwelley posted on a sign at the site of what was to have been the new home of one of the city's most popular restaurants.

"We gave it our best but the banks don't share our vision," the sign reads as it hangs on a corner lot at South Coast Highway and Cassidy Street.

The Dwelleys said their plans to relocate the venerable Beach Break Cafe were crushed last week when they got word from Wells Fargo Bank that the loan they counted on wouldn't come through on terms they could afford.

"Everything was ready to go," said Gary Dwelley. "We're shovel ready."

Wells Fargo representative Liz Finn Lange said Monday that the bank is in discussions with the Dwelleys.

"We continue to work with the Dwelleys and are still hopeful that we can finance their new restaurant construction" Lange said.

Zell Dwelley said Monday that she's not optimistic.

The Dwelleys' said they thought everything was all set after city officials and the federal Small Business Administration gave them the go-ahead on the project.

But after investing about $850,000 of their own money and money borrowed from a friend to buy the land, clear it and prepare architectural plans for the new restaurant, Zell Dwelley said she and her husband were told by Wells Fargo that they'd have to put up more money for the $1.8 million project because an appraisal of the new property came in lower than expected.

"They tell you they want to lend but they don't lend," Zell Dwelley said. "I'm not singling out Wells Fargo. I'm singling out the entire banking industry."

Zell Dwelley said she and her husband went to five other banks or credit unions looking for financing and Wells Fargo was the most promising. Some of the others weren't making commercial loans or charged high interest rates.

The Dwelleys bought the abandoned gas station corner lot last summer after they learned that plans to build a Starbucks coffee shop had fallen through.

In October, they razed the former gas station and cleared the lot after getting approval for an SBA backed loan if they could find a lender.

Soon after they acquired the land, Wells Fargo gave them preliminary approval for a loan pending an acceptable appraisal, Zell Dwelley said. By then, they had spent nearly $700,000 buying the property and getting the restaurant designs they needed to get city approval. They couldn't get final loan approval until the plans passed city review, she said.

Everything seemed to be on track, Gary Dwelley said, with a goal of opening Breach Break at its new location next summer.

Friends and customers were dismayed Friday to learn that probably won't be happening.

"Everyone was looking forward to having a little more room, a little more space," said Brian Moore, who dropped by for lunch Friday with his father and friends. "We've been coming here for years, at least twice a week. It's kind of a family."

"It doesn't make any sense to me, really," said Brandon Fenter. "They've gotten this far, they've gone through all the steps, and then (the bank) pulled the rug out from under them."

Pointing to a line of waiting customers already forming well before noon to get a seat for lunch, Fenter said the cafe is the kind of thriving business any lender should be eager to support.

"People come here from all around and on a Saturday, wait an hour and a half to eat." Fenter said.

Dwelley family friend and cafe customer Donnie Cox said he was "dumbfounded" to learn what happened.

"This has been in business for 22 years," Cox said. "It's not like the business is dropping off."

Standing outside his restaurant, Gary Dwelley said he wanted to move the Beach Break from its 1902 S. Coast Highway location because the restaurant is always jammed with seating for about 55 people inside and 20 at outdoor sidewalk tables. The new Beach Break would have been big enough for 85 to 90 people inside and about 30 on an outside patio.

"I feel like South Oceanside is losing, Gary Dwelley said. "My wife and I aren't losing. I've got great customers, great employees. The bottom line is better if I stay here."

Zell Dwelley said she dashed off a letter to President Obama after hearing him speak of helping out small businesses but she's not holding her breath.

Unless something changes, "We'll just stay here and do what we do," she said outside the old Beach Break.

As for the corner lot down the street, "I'll just sit on it," she added. In time, when the economy recovers, she said maybe she'll sell the lot in hopes of recouping the money they spent on the restaurant plans.

"Someone else will build there," Zell Dwelley said. "We gave it our best."

Call staff writer Ray Huard at 760-901-4062