NEWPORT BEACH : City Backs Bergeson Bill on Bay Club

The City Council on Monday voted 5 to 1 to support a proposed state law that would determine the future of the Balboa Bay Club, the adjacent Terrace Apartments and public access to the leased property for the next 18 years.

The bill, sponsored by Sen. Marion Bergeson (R-Newport Beach), goes to an Assembly committee Wednesday in hope of getting it passed during the 1994 legislative session that ends Friday.

If the bill fails in the Legislature, an ongoing dispute with the State Lands Commission, which has designated the property tidelands and uplands, will continue and jeopardize a $20-million to $30-million redevelopment plan the City Council approved last month for the Bay Club.

At stake is the club’s planned renovation, which would include expanding the club from 155,000 to 189,000 square feet, adding a restaurant, ballroom, four conference rooms, a coffee shop and two bars and converting the 144 Terrace Apartments on the westerly four acres to hotel rooms.

The club, at 1221 W. Coast Highway, has been on the property since 1948, when the city granted a 50-year lease. In 1978, the state transferred the land to the city as a public trust, which requires public access.

The bill would perpetuate the trust but allow the club to remain on the land by opening 95% of the 13-acre facility to the public, along with rebuilding the deteriorating portions of the original club so that homeowners on the hillsides above Coast Highway have “view corridors.”

The club and the city also are renegotiating the lease, which expires in 2011. Balboa Bay Club owner Beverly Ray hopes to get an extension to 2077.

Without the legislation and a new lease, the renovation could fall through.

Any “uncertainty regarding the permissible use of (the land) would impede or prevent redevelopment and postpone, for more than 17 years, the public’s right of access to the adjoining property,” according to proposed legislation drafted by City Atty. Robert Burnham.

The law would provide for the city to keep 95% of lease revenues for up to five years after a new lease is negotiated, then 90% in succeeding years. The balance would go into a state fund for oversight of the property.

That improves the city’s position from the commission’s initial proposal, which would have siphoned 50% of revenue from the property into state and county accounts.

Councilwoman Jean Watt cast the only no vote. (Councilwoman Janice Debay was absent.) Watt said she wanted the state’s cut of revenue reduced or half of it earmarked for land acquisition and improvements.

Councilman John Hedges, who voted for the deal, said he wasn’t satisfied but that a deadline loomed.

“Perhaps we should consider calling their bluff, saying thanks but no thanks. . . . It seems to me that it’s the worst deal we could cut, taking what they’ll give us,” he said.

The council compromised by authorizing city representatives to try to get the terms Watt proposed, but to proceed without them if necessary.