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Newport tackles marina rent rates

The City Council will take up the contentious issue in a special session before its regular meeting.

October 22, 2012|By Jill Cowan

The Newport Beach City Council faces a doubleheader Tuesday, with a special session to tackle commercial marina rents scheduled for 4 p.m. just before the council's regular meeting.

The rates and a related lease template have been a topic of contentious debate as the city aims to raise rents for business owners operating marinas on city-run public tidelands.

After weeks of negotiations, officials hope Tuesday will be the day the issue is resolved.

"Respectfully, the city is supposed to charge fair market value (FMV) for our tidelands — it's the law," City Manager Dave Kiff wrote in a newsletter. "In my opinion, folks can and should debate what fair market value is, but not whether we should be charging it."

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Newport Harbor commercial marina operators have said the city's proposed approach is monopolistic and, furthermore, that given the current economy, now isn't a good time for the city to implement changes.

The city has said the rental rates haven't been adjusted in decades and proposed changes would be phased in over a period of several years.

Kiff's newsletter lays out the current rules, compared with earlier proposed changes and the new proposal.

The proposal council members initially considered required marina operators to change from paying 36 cents per square foot per year through an annual permit to a longer-term lease that would charge 20% of gross slip revenue. The new proposal would allow operators to choose between a permit and a lease.

It would also change the rent calculation to an amount per square foot based on a marina index, up to 20% of gross slip revenue. The index takes into account rental rates at commercial marinas that are not on city-run tidelands.

Under the new set of changes, staff reports say, a proposed periodic appraisal process could include up to three independent appraisals, rather than one city-selected appraisal.

But Marshall "Duffy" Duffield of Duffy Electric Boats — who's spoken out against the rent increases —said that regardless of the technicalities of the lease, any increase is too much. He preferred not to say how much his rent is currently or how much it would go up.

"It's hard to understand why in the first place they even need this money," he said.

Furthermore, Duffield added, he sees the fact that the city has tackeld mooring fee increases, commercial marina rents and residential dock fees as separate issues as a "divide and conquer technique."

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