Newport Beach City Council approves extension of ground lease for Aquatic Center

The Newport Aquatic Center will continue to operate at its current location for at least a 30-year term, thanks to approval given Tuesday by the Newport Beach City Council to extend its existing ground lease.

The Newport Aquatic Center is a nonprofit dedicated to the promotion of human-powered aquatic sports — rowing, kayaking and outrigging. In 1987, the city and the county, which share ownership of the land the center operates on, leased about 4 acres to the center. After a facility expansion in 1997, an addendum to the ground lease was granted that extended the lease’s terms for an additional 25 years, which was to end later this month.

The agenda item to approve the new lease was originally folded into the council’s consent calendar but was pulled by Councilman Brad Avery for discussion.

The terms of the amended contract provide an initial 30-year term with two 10-year extension options for a total possible term of 50 years. It maintains past points of agreement, such as being a no-fee lease for the continued operations of the center at no cost to the city, being held to a city-approved facilities management plan and abiding by all entitlements and permits issued by the city, county, state and federal agencies.

The city’s real property manager Lauren Wooding Whitlinger said the newly-approved agreement requires the Newport Aquatic Center to spend 3% of its gross revenues on repairs, maintenance and refurbishments to the facility. It also requires inspections, includes internal control language, and specifically defines the period of time that the center will have to ameliorate any identified issues.

Council members spoke highly of the Newport Aquatic Center, though Avery noted he pulled the item so the council could more fully discuss the nonprofit’s way forward.

Avery said he was in favor of the new agreement and described it as “far more robust” than the existing document but did raise concerns about some of the legal troubles the Newport Aquatic Center faced in 2018 and 2019, including allegations of financial misconduct, harassment and retaliation. Court records indicate deliberations in some of those lawsuits continued until early 2023.

“I have no idea what has transpired in those, but it just, to me, when you see that, it makes you wonder what was going on there,” Avery said.

Avery noted the new agreement includes new requirements for reporting and requested that an addition be made that would allow for impromptu city inspections to review the property. He said he brought up the matter because, prior to his retirement, Avery ran a similar facility on behalf of Orange Coast College.

“[The county] just did site walks. You never knew when they were coming. They would just be random and it worked out fine. We never had a problem. They would write us up if there were a couple of things that needed fixing up or attention and that would help keep me on my game and I just think with a self-perpetuating board and under the spirit of [Council Policy F-7], you would have members voting on the board,” Avery said. “But here, we don’t have that. So, what do we have to guarantee to everybody that it’s going to run properly? That’s my concern.

“But at the same time, I’m very satisfied with the effort of staff and NAC coming together and coming up with this agreement.”

Avery’s council colleagues were supportive of the addition. Councilwoman Robyn Grant suggested a potential addition of a city-appointed member to the board of directors and Councilwoman Lauren Kleiman requested the possible requirement of closing restrooms and to disallow overnight parking of vehicles not owned by the center.

On Wednesday, Chris Blank, president of the Newport Aquatic Center’s board of directors, said officials there were “very pleased” with the extended agreement.

“It was a team effort, with several folks from the city and from Newport Aquatic center working together to get this done,” Blank said. “The requested revisions that were passed by the City Council are acceptable to us, and we expect to be signing the lease any day.”

Blank noted the center’s next big event is its “Off Da Couch” outrigger race on Oct. 21 and that it is now raising funds for the renovation of its weight-lifting facilities.