HomeMy WebLinkAbout07/11/1994 Item #7Item #7
CITY OF NEWPORT BEACH �J
OFFICE OF THE CITY ATTORNEY
July 8, 1994
(13YL
TO: Mayor and Members of the City CouncilFROM: Bob Burnham, City AttorneyRE: Proposed BBC Legislation
As you know, the City has asked Marian Bergeson to sponsor
legislation that would resolve the dispute regarding the Terrace
Apartments. The dispute stems from the contention of State Lands
staff that the entire Bay Club parcel consists of tidelands and
permanent residential use is not permitted on tidelands. The City,
Balboa Bay Club and State Lands agreed that this dispute would be
resolved prior to December 31, 1998, by legislation, litigation, or
boundary line agreement.
State Lands Commission staff has indicated they would be
unable to support or remain neutral on our proposed legislation
unless the City agreed to certain amendments. These amendments
include a provision that 25% of the revenue derived from the parcel
would go into a Countywide tideland fund to be administered by the
Board of Supervisors. We have advised State Lands staff that their
proposal is unacceptable and have suggested a simple legislative
solution that would give the Commission the authority to defer
resolution of dispute in conjunction with their right to review and
approve any new lease. This proposal would allow the proposed
redevelopment to proceed, with revenues from the Terrace Apartments
used to finance a portion of the project if the City and State
Lands can agree to the terms and conditions of a new lease.
State Lands staff is currently evaluating this concept and we will
communicate their position as soon as it is known.
Recommendation
Endorse the concept of authorizing State Lands to defer
resolution of the Terrace Apartment dispute in conjunction the
approval of the redevelopment project7and a new lease.
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RHB:wb /
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ATTACHMENT 4 0
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CITY OF NEWPORT BEACH
OFFICE OF THE CITY ATTORNEY
P.O. BOX 1768, NEWPORT BEACH, CA 92658-8915
Curtis Possum
State Lands Commission
1807 13th Street
Sacramento, CA 95814
(714) 644-3131
August 11, 1994
RE% Balboa Bay Club (BBC)
Dear Curtis:
Kevin and I appreciate the time you took to discuss the
proposed BBC redevelopment and components of the Beacon Bay Bill.
I have attached a redraft of our legislative proposal and hopefully
the revisions are consistent with the concepts we discussed during
our meeting. As you know, Senator Bergeson is very interested in
resolving this matter during her tenure and I believe every effort
should be made to conclude the legislative process this year.
As you know, the City has retained an appraiser and a
economist to advise us on the feasibility of the proposed BBC
project and the fair market rental value of the property. We have
developed workscopes for each consultant and I will send you a copy
in the next week or so. We have also committed to keep you advised
of all significant discussions with the BBC regarding a lease
extension and to provide copies of documents relevant to the
project or the re -lease.
Finally, the City Manager and I will ask the City Council for
authority to hire Bud Uzes to conduct a thorough review of City
tidelands. We intend to contact Bob Fisher of Orange County EMA to
see if he wants to expand the scope of the Uzes study to include
County tidelands. The County may have information helpful to Mr.
Uzes and we would like a comprehensive report on all tidelands in
the upper and lower bay. We will also prepare and send to you a
detailed cost accounting of tideland revenues and expenditures.
RHB:gjb
cc:Kevin Murphy
Foss=3.let
Very V&uly yours,
ty Attorney
3300 Newport Boulevard, Newport Beach
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DRAFT PROPOSED LANGUAGE FOR BALBOA BAY CLUB'S TERRACE APARTMENTS
8/11/94
The People of the State of California do enact as follows:
SECTION 1. Seebien 4.5 is added to ehaoter 274 af—tbe-Statu*
1W
The Legislature finds and declares as follows:
(a) By Chapter 74 of the Statutes of 1978 the Legislature
conveyed certain tide and submerged lands, in trust, to
the City of Newport Beach upon express conditions and for
certain public uses and purposes, but primarily for the
promotion and accommodation of commerce, fishing and
navigation.
(b) Getea Pportions of. these tide and submerged lands
(c)
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submerged lands.
LqJ{d} A DermanentPz4veAe residential use 21te tide and
submerged lands, whether filled or unfilled, is in
conflict with the Common Law Public Trust and the
Legislature's intent in the statutory trust provisions of
Chapter 74 of the Statutes of 1978. if it restricts
lands.
u{e} Many members of the public have made the residentla!
apartment complex their Permanent residence, many
IcLl+t- Parcel D
u
6zn
Beach a relatively small —pertien—ef the publ - trust
lands in Newport Bay, has been filled and reclaimed so
that itr is no longer submerged or below the mean high
•
the Publics' right of access to the adjoining Property,
L{j-} Givenin balaneing, the potential hardships resulting from
removAll-nq 21 the current residential tenants on or
before December 31.by 1998, asd the economic benefit to
the trust from the revenue generated by the continuing
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(i) —Parcel D, sebjeet to the apprsvals=previded €er 4:
0
subdivislen—(h) above, may used €er resideatial
appropriate trust purpeses as Trill—greduee the'aamimam
revenue for the funds created pursuant to Seetlen i (I)
That Section 4.5 is added to Chanter 74 of the Statutes of
1978 to read:
Lal
b)
former M
former M
former fl)
conditions and provisions of, this statute.
(c) The consideration received by the City for any
future lease or amendment to the current lease
which includes Parcel D shall be the fair
market rental value of the real property and
the improvements subject to any presently
existing contractual obligations so lona as
the property is used for residential purposes.
0
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consideration fair market value to be received
by the City, including the determination of
fair market rental value of Parcel D. shall be
approved by the State Lands Commission prior
to the effective date ofany such lease or
amendment., b____'_ng effeet_ -__
that:
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Cha74mod.d#3
FLU -17-1994 14"39 •
• P.04
ATTACHMENT 5
the torrent lease wbich includes Parcel D sball be the then fair market rental
value of the real property and the improvements subject to any presently
existing contractual obligations so long as the property is used for resider"
pa = pmposes-
$ECTIQN 2,
The form of any future lease or amendment of the current lease involving
Parcel D. and the consideration to be received by the City, ung the
dr - of f& market reaW value 0 a__..,.t r1_ S._n be approved by
the State Lands Commission prior to the e Nee ddives deft ofiwy such lease or
amendment bac Mm effective.
TMFL P.04
SENT BY. SENATE LOCAL GOVT
ATTACHMENT
8-19-94 9.04AM : 91638V 7146443139:# 3
AMENDMENTS To ASSEMBLY SILL NO. 3139
AS AMENDED IN ASSEMBLY APRIL 19, 1994
Amendment i
MUNBEL: PLEASE ADD SENATOR BERGESON As THE PRINCIPAL
CO-AUTHOR.
Amendment 2
Strike out the title and insert:
An act to add Section 4.5 tot and to amend section 6 of,
Chapter 74 of the Statutes of 1974, relating to tide and
submerged lands in the City of Newport Reach.
Amendment 3
on page 2, strike out line i, and insert:
SECTION 1. Section 4.5 is added to Chapter 74 of the
Statutes of 1978, to reads
4.5. The Legislature finds and declares, as follows:
(a) By Chapter 74 of the Statutes of 1978, the
Legislature conveyed certain tide and submerged lands in
trust to the City of Newport Reach upon express conditions
and for certain public trust uses and purposes, but primarily
for the promotion and accommodation of commerce, fishing, and
navigation.
(b) Portions of these tide and submerged lands were
filled and reclaimed as a result of the implementation in the
1920's of a plan of improvement, including the development of
lower Newport say as a harbor to promote and accommodate
commerce, fishing, recreational boating, and navigation. In
addition to the filled tide and submerged lands identified in
Section 6 Of Chapter 74 of the statutes of 1978, another
parcel as described in Section 2 of this Chapter (hereinafter
designated Parcel D) has been filled and reclaimed as part of
the public project of developing lower Newport Bay as a
harbor.
(a) Prior to a judicial decree in 1982 which held that
Parcel D and certain adjoining lands were State tidelands and
submerged lands granted to the•City pursuant to Chapter 70 of
the Statutes of 19270 the legal character of the property was
subject to some question. In 1948 the City leased Parcel D
and adjoining property to a private entity which constructed
a private club on the adjoining property and a residential
apartment complex of 142 units on Parcel D. The term of this
lease was extended in 1986 and the lease requires that the
use of Parcel D conform to public trust purposes as of
SENT BY:SENGTE LOCAL GOVT 8-19-94 9:04J4 91632?P0984 7146443139:# 4
�& -a—
December 31, 1998 in the absence of legislation, litigation,
or agreement with the State Lands Commission.
(d) Since 1985, the residential apartment complex an
Parcel D has produced substantial income, all of which the
City has used to directly,promots and support public use of
tide and submerged lands held in trust by the City by
providing services to those public trust lands such as
lifeguards, beach cleanup, police, and fire protection, and
by constructing facilities which improve the quality and
extent of public use of, and access to, tide and submerged
lands.
(e) Private residential use of tide and submerged
lands, whether filled or unfilled, is in conflict with the
Common Law Public Trust and the Legislature's intent in the
statutory trust provisions of Chapter 74 of the Statutes
1976.
(f) Many members of the public have made the apartment
complex their residence for many years and have come to look
upon the apartments as their permanent homes despite their
month to month contractual tenancy.
(g) Parcel D, a relatively small portion of the public
trust lands in Newport Bay, has been filled and reclaimed so
that it is no longer submerged or below the mean high tide
line, is not in its present state usable for public trust
uses and purposes and, given the large amount of public trust
lands that the City of Newport Beach makes available to the
public, Parcel Dmore valuable as a generator of revenue
devoted to suppoO
f public trust purposes than as a parcel
used by the publi or trust purposes.
(h) Public trust property adjacent to Parcel D has been
developed as a private club with extremely limited public
access. The current lasses of the private club and Parcel D
has proposed, and the City has approved a redevelopment plan
which, if implemented, will allow full public access to 95%
of the site occupied by the private club and would generate
substantially more tideland revenue from existing uses.
However, the current lessee will be required to pledge
revenue from the apartment complex on Parcel D to secure the
financing necessary to implement the redevelopment plan and
any uncertainty regarding the permissible use of Parcel D
could impede or prevent rodovelopment and postpone, for nwrz- i
almea* 21D years, the public's right of access to the
property.
(i) Given the potential hardships resulting from
removal of the current tenanta on or before DBCember 31,
1998, the economic benefit to the trust from the revenue
generated by the continuing use of Parcel D as an apartment
complex, the benefits to the public if revenue generated by
SENT HV:SENATE LOCAL GOVT 8-19-94 9:0SAM ;
- 3 -
916322r""%6� 7146443139;# 5
Parcel D is used to secure financing necessary to implement
the redevelopment plan for the adjoining property which will
dramatically improve public access to tide and submerged
lands, the availability of current public facilities and the
potential needs for expanded facilities for public trust
uses and purposes and in recognition of the facts set forth
in subdivisions (b), (c),,(d), (e), (f), and (g) or this
section, and in view of the amount of public trust land
remaining in Newport Say that is suitable for public trust
use, the current non -conforming reoidential use of Parcel D
may continue for the duration of its useful life, until the
€structure is removed, until the current or new lease expires,
or until five years after expiration of the financing secured
by Parcel D revenues, whichever occurs first, but in no event
later than December 31, 2044, subject to the requirement that
all revenue be devoted to public trust uses and purposes as
provided in subdivision (m).
(j) Should the City determine that the land use,
economic conditions, and public needs associated with Parcel
D will extend beyond the term of the present lease, the City
shall apply to the State Lands Commission for a determination
by the Commission that the continuation of this
non -conforming use for an additional period is in the best
interest of the public and in furtherance of public trust
purposes and needs. Should the Commission make that finding,
Parcel D may then be leased for residential purposes for an
additional period, but in no event beyond December 31, 2044.
(k) The consideration received by the City for any
future lease or amendment to the current lease which includes
Parcel D shall be the then fair market rental value of the
real property and the improvements subject to any presently
existing contractual obligations so long as the property is
used for private purposes.
(,3) The form of any future lease or amendment of the
current lease involving Parcel D, and the consideration to be
received by the City, shall be approved by the State Lands
Commission prior to that lease or amendment becoming
effective.
(m) Effective July 1, 1995s all money received by the
city from the existing or future lease which includes Parcel
D shall be deposited into the following tideland trust funds:
(1) 95 percent into a City tideland fund with the
revenue used only for purposes consistent with the promotion
of public trust uses, including public access, over the
remaining tide and submerged lands granted to the City, and
(2) 5 percent into the Land Hank Fund pursuant to
subdivision (c) of Section 8625 of the Public Resources Code,
and notwithstanding section 8613 of the Public Resources
Code, the fund shall be available without regard to fiscal
SENT BY:SENATE LOML GOVT 46 8-19.94 9: 06RM ; 91632#3.9 7146443139:# 6
— 4 —
years for expenditure by the Commission for purposes of
providing necessary state review of management of public
trust property as provided by Sections 6301 and 6306 of the
Public Resources Code.
F/vg yea^,°
upon 'the effective date.of any now lease or amendment to the
current lease the above revenue percentages shall be modified
so that the percentage in subdivision (1) shall be 90 percent
and the percentage in subdivision (2) shall be 10 percent:.
SEC. 2. Section 6 of Chapter 74 of the Statutes of 1978
in amended to read:
SEC. 6. The parcels of real property referred to in
this act are proscribed as follower
PARCEL A
Beginning at Station Na 8 in the Line of Mean High Tido per
judgment rendered in Case No, 20138. Superior Court of Csl fomia•
County of Orange, recorded in Back 831. page 72 of Deeds. records
of said Orange County. said Station No. a being at the easterly
taminas of that certain couraeinsaid Line of Meas High lido shown
as "North 71.84' 00' we#, IM3.34 Feet" oa a map of Tract No. 4003
recarded in Book 188. pages 13 throagh 19 of Miscellaneous Maps,
records of said Orango.Coonty, said beginning being a It/i i`OT+ptPa
as shown on said nap of Tract No. 4003: thence along mid Lice of
0fpoint
MMeallghd1e cuterly baof Lot in a C
parallel an0000eet easterly from
as shown on a map flied in Book 9, pages 42 and 43 of Record of
Surveys, records of said Orange C.ountr theaee along raid parallel
jai c�ad� sn CasNe. in tba superior Corrdicary m Of Cif ffe Lim VA
County of Ormge, seoorded in Book 199, 273 of Official Records
Of sold Orange County. said pointbeirrg the True Paint of Beginning
of this dnactiptlan tberm along said Ordinary high Tide Line the
fellotvistgcoursa: North WSW 00'West.297.66feetto= angle t
thereto: thence South g4.00' 00• West,160A0 fe0U thence South br
00' 00• West, to= feet: thence South 3r 52'00" fast, 248.21 feet to
a Win that is parallel with and distant OW feet nortbcrfy, tt-eastusd
at right angles, from the US. Bulkhead Lion, as shown on US.
14ngineer s Map of harbor Unee of Nepwwppoortrt Bay, dated March 20.
1936, and apprwedApril 2&1935;that= leavingaid Ordinary High
'fide Line and eking said parallel Use Fast, 148.00 feet to Our
southeasterly core of Lot l9 as shown on a map filed in Book 9,
pogo 4liand 43 of Record of Surveys. records of add Orange Catmty-
theaca along the easterly lineof said Lot 19 North 100.00 feet -thence
Eta 4090 feet: times South 100.00 feet- thence Fast 19&10 feet to
a flee parallel with and distant 2090 feet westerly, raaasured at right
anghlea cod South feet ,% thencecourse and �sald�line �.
195.00 feet- thence Fast 2000 feet- thence North 101.64 feet to the
'line Point of Bachodug of this description.
Containing 1694 arra, more or less.
9 9
(f) Many members of the public have made the apartment
complex their residence for many years and have come to look upon
the apartments as their permanent home despite
eentraetual the nature of their tenancy.
(g) Parcel D, a relatively small portion of the public trust
lands in Newport Bay, has been filled and reclaimed so that it is
no longer submerged or below the mean high tide line, is not in its
present state usable for public trust uses and purposes and, given
the large amount of public trust lands that the City of Newport
Beach makes available to the public, Parcel D is may be more
valuable as a generator of revenue devoted to support of public
trust purposes than as a parcel used by the public for trust
purposes.
(h) Public trust property adjacent to Parcel D has been
developed as a private club with extremely limited public access.
The current lessee of the private club and Parcel D has proposed,
and the City has approved a redevelopment plan which, if
implemented, will allow full public access to 9" the majority of
the site currently occupied by the private club and would generate
substantially more tideland revenue from existing uses. However,
the current lessee will be required to pledge revenue from the
apartment complex on Parcel D to secure the financing necessary to
implement the redevelopment plan and any uncertainty regarding the
permissible use of Parcel D could impede or prevent redevelopment
and postpone, for almest 20 more than 17 years, the public's right
of access to the property.
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