Newport adjusts marina rent hikes

Rent increases for commercial marinas operating on public tidelands — which the Newport Beach City Council seemed to have settled at its last meeting — were dredged up again for another vote Tuesday night.

The council voted to raise rents on large commercial marinas from about 36 cents per square foot to a rate that roughly translates to $1.97 per square foot, or 18.5% of gross slip revenue, at its Oct. 23 meeting. But on Tuesday, the council opted to lower that to about $1.68 per square foot, or 16% of gross slip revenue.

Those amounts are calculated based on a marina index rate, which takes into account rents at privately owned marinas that are not on public tidelands to determine a "fair market value." The city has said the state requires it to update its rental rates for city-administered tidelands to fair market rates, while harbor business owners have fought hard against the increases, saying they are too much.

The new increase will be phased in from 2014 to 2018, another change from the previously approved proposal, which would have phased in the increases from 2015 to 2020.

The council also voted to increase rents for harbor users who operate various other types of businesses on public tidelands, though not by as much.

Harbor stakeholders that operate daily boat rentals, homeowners' association slips, guest slips for restaurants, sportfishing charters, yacht clubs and large charter boats will eventually pay $1.02 per square foot, according to the revised proposal, which passed with only Councilwoman Leslie Daigle voting against it.

Meanwhile, shipyards will pay about 50 cents per square foot, and fuel docks will pay 50 cents per square foot minimum rent, offset by a per-gallon fee of 1.5 cents for the first 100,000 gallons, then 2 cents beyond that. Small commercial marinas, defined as having less than 15,000 square feet of total waterway, will pay 75% of the large commercial marina rate.

And, per negotiations with harbor stakeholders at an Oct. 31 workshop, a reappraisal that was originally slated to take place in 10 years will now take place in March 2018, just after the proposed increases are fully phased in.

While the fee increases have drawn streams of angry public comment in past meetings, just a few residents spoke out against the changes Tuesday. They reiterated that the rent increases will be a tough burden for harbor businesses to shoulder, and that they will likely have to pass some of the increased costs on to customers.

Council members seemed weary of the discussion — although they may soon be headed into a similar battle with residential dock owners whose piers are on public tidelands.

Still, the money raised from the tidelands fee increases will go straight back into several major harbor maintenance and improvement projects, Councilman Steve Rosansky said.

"I believe it's the intention of the council that the excess funds be plowed back into the harbor," he said. "I think that's something that hasn't been stressed a lot."

Added Mayor Pro Tem Keith Curry, who said the new rates will be more consistent with other harbors: "There's one big problem. It's that for 20 years, the council did not address this problem. That's the reason the size and magnitude [of the increases] is so overwhelming to the business owners." He reluctantly supported the proposal, he said.

Twitter: @jillcowan

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