SANTA CRUZ — A 58-year-old Santa Cruz man and well-known surfing pioneer arrested on suspicion of murder Sunday morning was released and all charges dropped on Tuesday.

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“After careful review of the evidence submitted by the Santa Cruz Police Department, and autopsy findings provided by the Sheriff’s Coroner’s office, the District Attorney’s Office has determined there is insufficient evidence to charge Kevin Callahan regarding the death of Steven Lee. Kevin Callahan has since been released from custody,” according to a release from the Santa Cruz County District Attorneys Office on Tuesday.

Santa Cruz police have reclassified of Lee’s demise as a “suspicious death” and consider Callahan a “person of interest,” department spokeswoman Joyce Blaschke said Tuesday.

Blaschke said the department stands by the District Attorney’s Office and its “sound decision” to release Callahan. However, Callahan’s arrest, she said, was based on probable cause, including his own admissions, witness reports, evidence of an apparent struggle around Lee’s body and Callahan’s proximity to the body the next morning.

“At this point, because the coroner’s report is inconclusive. There isn’t a conclusive cause of death. We can’t rule it a homicide because we don’t know how or why he died,” Blaschke said. “This all hinges on the coroner’s report. It makes sense as part of our legal process that we would err on the side of caution.”

Santa Cruz police took Callahan, known during his professional surfing days as Kevin Reed, into custody after the body of Lee, 52, was found dead near the Main Beach volleyball courts around 4:20 a.m. Sunday. At the time, police reported no obvious signs of trauma on Lee’s body and were unable to determine his cause of death, according to a department release.

Witnesses at the scene told investigators that Callahan and Lee, who both were homeless and often slept next to the beach, had been in a fight Saturday night, prior to Lee’s death, police said on Sunday. Police found Callahan asleep on the beach about 100 feet from Lee.

In submitting their evidence to the District Attorney’s Office, Santa Cruz police included Callahan admitting in a statement to choking Lee, according to attorneys. Callahan told investigators that Lee was alive when he left him at the scene.

Though the Santa Cruz County Coroner’s Office has conducted an autopsy, according to department spokesman Sgt. Chris Clark, a determination on the cause of Lee’s death is pending until results of toxicology test are returned.

The allegations against Callahan had come as a blow to friend and local surf legend, Bob Pearson, owner of Pearson Arrow Surfboards on Mission. Pearson said he considers his friend Kevin “one of the most famous guys in the world.”

“He was the first guy to do the aerials. That’s a fact, and he did it five years before anybody else,” Pearson said Monday. He acknowledged that he had heard the murder allegations against his friend and hoped that they proved incorrect.

Pearson said Callahan has been homeless for a few years, drinking heavily and generally having a hard time in life. Pearson and his daughter, home from college, visited with Callahan just last week. The two took him out for some tacos and listened to his stories. The change in who Callahan is today from who he had been is “pretty damn sad,” Pearson said.

“Some people, you drive by homeless — you hear it a bunch of times: Don’t judge the people, you don’t know who he is, who she is, where they’re from, what happened to them and what’s going on in their life,” Pearson said. “I’m sure he has been judged wrong by a lot, a lot of people. It’s unfortunate, some people just fall through the cracks.”

Callahan was the first to appear performing an aerial maneuver on the cover of “Surfing Magazine” in 1975. The Seabright-area native, Pearson said, has not been surfing for a long while.

“I’ve been trying to work with (three-time Mavericks champion) Flea and a lot of other guys, trying to straighten him out. It’s been difficult,” Pearson said.