HomeMy WebLinkAboutProperty Surplus - Beacon BayCITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
JUN i. 1y70
By the CITY COUNCIL
CITY, of NEwa®gT BEACH
TO: MAYOR AND CITY COUNCIL
FRCM: City Manager
SUBJECT: BEACON BAY PROPERTY
May 18, 1970
SS Item N6
In January the attached preliminary analysis of alternatives avail-
able to the City with respect to the future use of the City -owned Beacon Bay
property was received from the firm of Development Research Associates and
forwarded to the City Council for information purposes. Partially as a re-
sult of the Balboa Bay Club election held during the preceding week, this
matter was never formally reviewed at any Study Session or regular Council
meeting subsequent to the submittal of the report.
Development Research Associates was advised in writing in January
not to spend any more time-on this project until given further notice from
the City. Approximately $1,900 of a $5,000 appropriation had been paid to
DRA up to that point and completion of the study has been held in abeyance
until such time as the City Council expressed itself to desire a more thorough
documentation of the long -range alternatives relative to the use or. disposition
of the property. You will note that the preliminary documentation of alterna-
tives includes a recommendation on Page Five of the report that the City
retain the services of an appraiser to document the current values of the
property as it relates to those who have any financial interest in the Beacon
Bay community. Such an appraisal may necessary if the City intends to
take any action at this time regarding the future use and /or disposition of
the property. This would also be particularly desirable if the electorate
is to inevitably be asked to decide what the ultimate disposition of the
property should be. It is estimated that a full appraisal of the property
would cost approximately $10,000.
Whether any further effort should be undertaken with regard to the
property in question at this time is a matter which the City Council will
have to determine. It would seemingly be. desirable for the City Council to
express itself on the following two questions:
_ 2 -
1. Should the City proceed further with the firm of Development
Research Associates to complete the economic analysis which
that firm addressed itself to in late 1969, or should that
contract be officially terminated in view of the recent lease
extension request withdrawal by the Beacon Bay Community
Association (copy attached); and
2. Should the City have the Beacon Bay property formally appraised
as a means of assisting the City in making decisions regarding
the alternatives which have been set forth in the preliminary
DRA report, ie. trade the property for Civic Center property
at Newport Center, etc.
The City staff will appreciate some direction on this matter one
way or the other in order that this project will not be further held in limbo
and in order that desired actions by the City Council can be reflected through
appropriate expenditure projections to be set forth in the fiscal 1970 -71
municipal budget.
HLH:JPD:sr
Atts .
HARVEY L. HURLBURT
To- The City of Newport Beach January 16, 1970
1903.02
Attention: James D. DeChaine
Assistant City Manager
From: Development Research Associates
Subject: ANALYSIS OF THE crry'S ALTERNATIVES WITH RESPECT TO
RESOLVING INHERENT LEASING PROBLEMS ON THE PROPERTY
KNOWN AS THEIR BEACON BAY LEASEHOLD
METHOD OF APPROACH
To determine the ' various alternatives available to the city with respect to the
subject property, the following approach has been taken:
0 Study and review of the present Beacon Bay lease between the
city and the lessee.
0 Analysis of the 1967 appraisal covering the subject property.
o' Investigation of the objectives of the Beacon Bay Community
Association.
0 Review of the sections of the City Charter pertinent to the extension
of leases on City property.
o Review of the sections of the State Constitution in addition to
pertinent adjudication relevent to the sale, grant, or trade of
tidelands.
o Analysis of existing and potential land uses for the property.
0 Analysis of the subject property as a possible investment for a
developer.'
Memo to The City of Newport Beach .
Page Two
January 16, 1970
i
OBJECTIVES AND ALTERNATIVES
Our analysis has resulted in the categorization of four distinct groups which
have an interest in the subject property. These groups include The City of
Newport Beach, The Beek family, The Beacon Bay Community Association,
and The Irvine Company. On the basis of preliminary surveys, we have
investigated each group's expressed objectives with respect to the property.
Table 1 delineates these objectives for the reader.
i
i
TABLE 1
OBJECTIVES OF THE GROUPS
RELATED TO THE CITY'S BEACON BAY LEASEHOLD
The City, 1. As a lessor, realize a fair return on the
Beacon Bay Leasehold.
2. As a landowner, realize a maximum return
on the property it owns.
3. As a municipality, prevent deterioration and
promote the public's welfare in the subject
area.
The Beeks 1. As the master lessee, maximize profits from
subleasing lots in the Beacon Bay leasehold.
2. As an investor, maximize return on invest -
ment.
Beacon Bay Community
Association
1. As individual homeowners,. extend the length
of the lease so as to qualify for necessary
financing.
.2. As an association, achieve autonomy by
becoming the master lessee, or provide
for individual homeowners leases.
Irvine Company 1. As a residential developer, gain access to the
water for its property directly to the north of
the subject property.
2; As a developer, acquire additional land to
increase the value and marketability of its
present holdings.
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Memo to The City of. Newport Beach
Page Four
January 16, 1970
An analysis of the objectives'of each group (see Table 1) assists in an under-
standing of their alternatives. The alternatives open to each group, as can be
seen in Table 2, act to deter the entire group from arriving at mutual satisfac-
tion. I
TABLE 2
ALTERNATIVES OF THE GROUPS
RELATED TO THE CITY'S BEACON BAY LEASEHOLD
The City 11 Establish value and proceed to negotiate an
extension on all or part of the Beacon Bay
leasehold.
2. Let lease expire and subsequently hold, sell
or trade subject property.
3. Purchase all or part of the master lessee's
interest so as to -accelerate control or transfer.
The Beeks 1. Maintain status as the master lessee.
2. Establish value of it's interests and completely
or partially sell such interest.
Beacon Bay Community 1,, Establish value of the leasehold and proceed
Association to negotiate with the Beacon Bay lessor and/
or the master lessee.
2. Establish value of the master lessee's interests
and negotiate a purchase.
Memo to The City of Newport Beach
Page Five
January 16, 1970
TABLE 2
(Continued)
ALTERNATIVES OF THE GROUPS
RELATED TO THE CITY'S BEACON BAY LEASEHOLD
1. Promote condemnation proceedings on the
easterly portion of the Beacon Bay Leasehold
so as to subsequently secure access to the
water from the City.
2. Purchase or trade for any available land in
the subject area.
3. Negotiate with master lessee and the City
for water access within the framework of
existing leases,
ANALYSIS OF ALTERNATIVES
We believe an ,analysis of the City's alternatives to be pivotal in creating mutual
satisfaction for all involved. Primarily, the City, must determine its course of
action.
In any•event, a new appraisal of the subject property should be undertaken.
Recent developments have tended to invalidate the original appraisal analysis.
Not only will the appraisal contribute invaluable input in arriving at the disparity
between the value of the City's yearly return on the lease and what in fact the
City presently receives, but it could serve as a basis for part or all of the
subject property's sale or trade.
Memo to The City of Newport Beach
Page Six
January 16, 1970
o Appraisal of Master Lessee's Position (Beek)
o Westside Addition
o Bayfront Sector
o' Interior Sector
o Yacht Basin
o Fee Value of Land
o Westside Addition
o Bayfront Sector
o' Interior Sector
o Yacht Basin
o Impact on Beacon Bay land value if Bayside Drive is relocated,
making existing Bayside Drive into a cul -de =sac.
ADDITIONAL CONSIDERATIONS
The previously recommended appraisal will provide key data for our analyses
of the full range of alternatives open to The City of Newport Beach. However,
we believe the following considerations should be stressed at this point:
o A trading of tidelands for uplands will be necessary to effect a
possible sale_ of the residential portions of the subject. However
we believe that this consideration must be treated as a separate
alternative.
o Alternatives for renegotiating the current lease should be fully
analyzed.
o Public usage of the Yacht Basin should be considered. Acquisition
of the current lease interest prior to expiration of the lease is
a relevant alternative.
o Eventual public usage the residential areas should be considered
as an alternative.
o An equitable lease renegotiation could be effected independently of
and prior to any possible sale of all or a portion.
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F &ETAVII.
3D ONA 'Lij-1;
January 27,-1970
Mr. Harvey Hurlburt, City Manager
City of Newport Beach City Hall
3300 Newport Blvd.
Newport Beach, California 92660
Dear Harvey:
I am not going to waste your time or my breath discussing further a possible
extension of the Beacon Bay lease. The citizens of this community earlier,
this month pretty well expressed their feelings on the matter.
However, if you are still interested in exchanging the Beacon Bay land for
a community center location with Irvine Company, I may be able to be of some
help. In discussing the possibility with some people at Irvine, I find that
they would be willing to make such a trade. As a matter of fact, there is
some enthusiasm for such a trade. At.the same time, there Is some apprehension
on their part regarding some of.the items involved.
If you have some time in the next couple of weeks, why don't we discuss it,
My office is now located adjacent to the Orange County Airport. My phone
c
number, is 540-5045. , Please, give -me a -all at your convenience.
J
Yours very trulyi
Al
a Donald W. haw
Beacon Ba Co unity As clation
DWS/le'.
V�
4
..T6;qpitqne&,666-_1411 : �;
.CITY OF NTWPORT BEACH
OFFICE OF THE CITY MANAGER
January 22, 1970
TO: CITY MANAGER
FROM: Assistant City Manager
SUBJECT: BEACON BAY PROPERTY
Attached you will find a preliminary analysis of some of the
alternatives available to the city with respect to the future use of the
city owned Beacon Bay property. This analysis is intended to be a prelim-
inary progress report by Development Research Associates which has been
studying this property for the past two months.
You will note that in considering these alternatives they have
recommended 'on Page Five of the memorandum that the city retain the services
of an appraiser to dociment the current values of the property as they relate
to each of the various parties who have a financial interest in the Beacon
Bay camnunity. It is my firm belief that such an appraisal will be necessary'
before the city is able to take any action regarding the future use and /or
disposition of the property. In my opinion this appraisal should not simply
be an updating of the George Hamilton Jones appraisal performed in 1967 for
the Beacon Bay Community Association, but rather a separate appraisal under-
taken as soon as possible by a different appraiser retained by the city.
This is particularly desirable in view of the inevitable involvement of the
voters in the community who must be asked to decide what the city is to do
with this property.
I have taken the liberty to check with Cedric White to determine
his availability to undertake this assignment and what the probable cost
of the appraisal would be. Mr. White has estimated that it would cost in the
vicinity of $10,000 to undertake the type of appraisal needed to provide the
information needed to assist us with any future consideration of the alter-
natives summarized in the DRA progress report. It would be my recommendation
that this matter be reviewed with the City Council during the study session
next Monday. While it would take many months to complete this appraisal,
Mr. White has indicated that a meaningful determination on the economic
impact upon the Beacon Bay property by the development of the Promontory
Point property by the Irvine Company could be made within thirty days as
a part of this appraisal effort, or at a cost not to exceed $500 under a
separate contract.
JAMES P. DeCHAINE
JPD:sr
Attachment
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
May 1$, 1970
SS Item N6
TO: MAYOR AND CITY COUNCIL
FROM: City Manager
In January the attached preliminary analysis of alternatives-avail-
able to-the City with respect to the future use of the City -owned Beacon Bay
property was received from the firm of Development Research Associates and
forwarded to the City Council for information purposes. Partially as a re-
sult of the Balboa Bay Club election held during the preceding week, this
matter was never formally reviewed at any Study Session or regular Council
meeting subsequent to the submittal of the report.
Development Research Associates was advised in writing in January
not to spend any more time on this project until given further notice from
the City. Approximately $1,900 of a $5,000 appropriation had been paid to
DRA up to that point and completion of the study has been held in abeyance
until such time as the City Council expressed itself to desire a more thorough
documentation of the long -range alternatives relative to the use or.disposition
of the property. You will note that the ,preliminary documentation of alterna-
tives includes a recommendation on Page Five of the report that the City
retain the services of an amraiser to document the current values of the
property as it relates to those who have any financial interest in the Beacon
Bay cammtmity. Such an appraisal may be necessary if the City intends to
take any action at this time regarding the future use and /or disposition of
the property. This would also be particularly desirable if the electorate
is to inevitably be'asked to decide what the ultimate disposition of the
property should be. It is estimated that a full appraisal of the property
would cost approximately $10,000.
Whether any further effort should be undertaken with regard to the
property in question at this time is a matter which the City Council will
have to determine. It would seemingly be desirable for the City Council to
express itself on the following two questions:
- 2 -
1. Should the City proceed further with the firm of Development
Research Associates to "iromplete the economic analysis which
that firm addressed itself to in late 1969, or should that
contract be officially terminated in view of the recent lease
extension request withdrawal by the Beacon Bay Commnmity
Association (copy attached); and
2. Should the City have the Beacon Bay property formally appraised
as a means of assisting the City in making decisions regarding
the alternatives which have been set forth in the preliminary
DRA report, ie. trade the property for Civic Center property
at Newport Center, etc.
The City staff will appreciate some direction on this matter one
way or the other in order that this project will not be further held in limbo
and in order that desired actions by the City Council can be reflected through
appropriate expenditure projections . to be set forth in the fiscal 1970 -71
municipal budget.
HLH:JPD:sr
Atts.
m
E._.- alJi P1:
4� M k Q P -
MEMORANDUM
To: The City of Newport Beach January 16, 1970
1903.02
Attention: James D. DeChaine
Assistant City Manager
From: Development Research Associates
Subject: ANALYSIS OF THE CITY'S ALTERNATIVES WITH RESPECT TO
RESOLVING INHERENT LEASING PROBLEMS ON THE PROPERTY
KNOWN AS THEIR BEACON BAY LEASEHOLD
METHOD OF APPROACH
To determine the various alternatives available to the city with respect to the
subject property, the following approach has been taken:
o Study and review of the present Beacon Bay lease between the
city and the lessee.
o . ` Analysis of the 1967 appraisal covering the subject property.
o Investigation of the objectives of the Beacon Bay Community
Association.
o Review of the sections of the City Charter pertinent to the extension
of leases on City property.
o Review of the sections of the State Constitution in addition to
pertinent adjudication relevent to the sale, grant, or trade of
tidelands.
o Analysis of existing and potential land uses for the property.
o Analysis of the subject property as a possible investment for a
developer.
,- 2�y:"
,, RBSSARCH. ASSOCIATES
Memo to The City of Newport Beach
Page Two
January 16, 1970
OBJECTIVES AND ALTERNATIVES
Our analysis has resulted in the categorization of four distinct groups which
have an interest in the subject property. These groups include The City of
Newport Beach, The Beek family, The Beacon Bay Community Association,
and The Irvine Company. On the basis of preliminary surveys, we have
investigated each group's expressed objectives with respect to the property.
Table 1 delineates these objectives for the reader.
RSSEARCH ASSOCIATES
The City
The Beeks
TABLE 1
OBJECTIVES OF THE GROUPS
RELATED TO THE CITY'S BEACON BAY.LEASEHOLD
1. As a lessor, realize a fair return on the
Beacon Bay Leasehold.
2. As a landowner, realize a maximum return
on the property it owns.
3. As a municipality, prevent deterioration and
promote the public's welfare in the subject
area.
1. As the master lessee, maximize profits from
subleasing lots in the Beacon Bay leasehold.
2. As an investor, maximize return on invest-
ment.
Beacon Bay Community
1.
As individual homeowners, extend the length
Association
of the lease so as to qualify for necessary
financing.
2.
As an association, achieve autonomy by
becoming the master lessee, or provide
for individual homeowners leases.
Irvine Company 1.
As a residential developer, gain access to the
water for its property directly to the north of
the subject property.
- :2.
As a developer, acquire additional land to
increase the value and marketability of its
present holdings.
t
w¢
,e''''',
�4e` \e�111. ;6
= Maenni;
MVM,OPMBNT AESHA.ACH ASSOCIATES AaM '.i131111
Memo to The City of Newport Beach
Page Four
January 16, 1970
An analysis of the objectives of each group (see Table 1) assists in an under-
standing of their alternatives. The alternatives open to each group, as can be
seen in Table 2, act to deter the entire group from arriving at mutual satisfac-
tion.
TABLE 2
ALTERNATIVES OF THE GROUPS
RELATED TO THE CITY'S BEACON BAY LEASEHOLD
The City, 1. Establish value and proceed to negotiate an
extension on all or part of the Beacon Bay
J leasehold.
2. Let lease expire and subsequently hold, sell
or trade subject property.
3. Purchase all or part of the master lessee's
interest so as to accelerate control or transfer.
The Beeks. 1. _ Maintain status as the master lessee.
2. Establish value of it's interests and completely
or partially sell such interest.
Beacon Bay Community
Association
rw
1.
Establish value of the leasehold and proceed
to negotiate with the Beacon Bay lessor and/
or the master lessee.
Establish value of the master lessee's interests
and negotiate a purchase.
RESEARCH ASSOCIATES.
Memo to The City of Newport Beach
Page Five
January 16. 1970
TABLE 2
(Continued)
ALTERNATIVES OF THE GROUPS
RELATED TO THE CITY'S BEACON BAY LEASEHOLD
Irvine Company .
1. Promote condemnation proceedings on the
easterly portion of the Beacon 'Bay Leasehold
so as to subsequently secure access to the
water from the City.
2. Purchase or trade for any available land in
the subject area.
3. Negotiate with master lessee and the City
for water access within the framework of
existing leases;
ANALYSIS OF ALTERNATIVES
We believe an analysis of the City's alternatives to be pivotal in creating mutual
satisfaction for all involved. Primarily, the City must determine its course of
action.
In any event, a new appraisal of the subject property should be undertaken.
Recent developments have tended to invalidate the original appraisal analysis.
Not only will the appraisal contribute invaluable input in arriving at the disparity
between the value of the City's yearly return on the lease and what in fact the
City, presently receives, but it could serve as a basis for part or all of the
subject property's sale or trade.
Information especially necessary includes:
o Appraisal of City's Position
o Westside Addition
o Bayfront Sector
o Interior Sector
o Yacht Basin
{ TEVELOPMENT RESEARCH ASSOCIATES
Memo to The City of Newport Beach
Page Six
January 16, 1970
o Appraisal of Master Lessee's Position (Beekl.
o Westside Addition
o Bayfront Sector
o Interior Sector
o Yacht Basin
o Fee Value of Land
o Westside Addition
o Bayfront Sector
o' Interior Sector
o Yacht. Basin
o Impact on Beacon Bay land value if Bayside Drive is relocated,
making existing Bayside Drive into a cul -de -sac.
ADDITIONAL CONSIDERATIONS
The previously recommended appraisal will provide key data for our analyses
of the full range of alternatives open to The City of Newport Beach. However,
we believe the following considerations should be stressed at this point:
o A trading of tidelands for uplands will be necessary to effect a
possible sale of the residential portions of the subject. However
we believe that this consideration must be treated as a separate
alternative.
o Alternatives for renegotiating the current lease should be fully
analyzed.
o Public usage of the Yacht Basin should-be considered. Acquisition
of the current lease interest prior to expiration of the lease is
a relevant alternative.
o Eventual public usage the residential areas should be considered
as an alternative.
o An equitable lease renegotiation could be effected independently of
, and prior to any possible sale of all or a portion. ,
MCClark: jg ..� �.;..,.;
/,er�nre� ii'c
. ,p ;?•.- rr�;,�..,t ;. _x 3N�,,,!.`. ,_arc,_,�.y_� .x:DBiVELOPMENT.RESEARCH ASSOCIATE8,44MII�����
DONALD F S ITEAW t�ly>J�r_r� 1�!hrl�✓ \fin %w�
January 27,1970 '
Mr. Harvey Hurlburt, City Manager `
City of Newport Beach City Hall
3300 Newport Blvd. F
Newport Beach, California 92660
Dear Harvey:
1 am not going to waste your time or my breath discussing further a possible
extension of the Beacon Bay lease, The citizens of this community earlier.
'this month pretty well expressed their feelings on the matter.
However, if you are still interested in exchanging the Beacon Bay land for
a community center location with Irvine Company, I may be able to be of some
help. In discussing the possibility with some people at Irvine, I find that
they would be willing to make such a trade. As a matter of fact, there is
some enthusiasm for such a trade. At.the same time, there is some apprehension
on their part regarding some of.the items involved.
If you have some time in the next couple of weeks, why don't we discuss it.'
My office is now located adjacent to the Orange County Airport. My phone
..number, is 540 -5045. Please give-me a call at your convenience.
Yours very t&aw
Donald W,It Beacon Be
0WS /le
11y
7901 Blake Avenue a 'Los Angeles. Collfornia 90039. a Arco Code 213, Telephone, 666 -1411
- .. u .. ♦,�,..___ sI1J. -..��_ 1.w - W�_� lk_i */._ML__,.. MAL - ♦___ /'..J_ VIA --- !.w'ew.e
May 25, lE70
Mr. Richard S. Stevens
Bice President
Balboa Bay Club
1221 west Coast 1;iglnjay
Newport Reach, California 92660
Dear Dick-
Your interest .u,d comments on City -ovmed properties is appreciated. I apologize
for being slow in answering - I arm getting organized.
The City does have a complete file of all City - owned properties. A st:uty has
been wader way for some time to establish the best long -time use of. these
parcels. A year or so ago the priority of this activity was advanced. The
assistance of the Costa Mesa - Newport Beach Realty :bard was obtained to increase
the productivity of the old &.mip site in West Newport and the City - owned property
in Ihuitington Reach. As a r,:.sult, the property i:: I:u:itington ,:each was leased,
but M jectiC�,s from the City of Huntington Bead° has required a re- examination
of this situation. We are now considering the possibility of selling this
property.
Lindsley parsons has been active in promoting legislation for th -a capping Of
non - productive oil wells. '11he completion of this will put us in a 1x;sition to
make more profitable use of other properties in 1Wtin „ton Beach.
We are also actively following the opportunity to make productive use of the
old dump site.
Your interest is ;greatly appreciated and any suggestions will be welcome. If
you wish further information, please contact Harvey and ne.
Very truly yours,
E. F. HIRT11.
Mayor
EFH:pg
cc: Harvey L. lfuriburt
City Manaffer
AY CLUB
1221 WEST COAST HIGHWAY . NEWPORT BEACH, CALIF. 92660 / (714) 5482211
May 6, 1970 RECEIVED
MAY.; 197p
cy11
mayor
The Honorable E. F. Hirth City Of New Pert
Mayor, City of Newport Beach Beach
Newport Beach, California R' Tl /\ `
Dear Ed:
The purpose of this letter is to inquire as to the status and
progress of the inventory and master planning of all city -owned
property. As you know, during our recent election the Daily
Pilot based its lack of endorsement to our cause upon the pri-
mary point that the City was condr$ting such a study and that a
decision should. not be reached. with respect to long -range
utilization of the property until after this study was completed.
As you may recall the Pilot also stated, in effect, that such a
study was long overdue and that the City had been delinquent in
not tackling this assignment sooner. I am certainly not seeking
to blame anyone for the past; however I'm most concerned that
this study be moved forward with a high priority. I'm sure that
the City Council doesn't want to make any decisions with respect
to extension of the American Legion lease or the Beacon Bay
lease until the results are in.
As one of the key leaders in the development of the Newport
Tomorrow program, I know that you share my concern for the
rapid development and execution of the master plan. I would not
only like to offer our services in this direction but to request that
we be included in the discussion and. study so that our problems
and viewpoint may assist those making the decisions in reaching
their conclusions.
ncerelpy��,
and S L ns
Vice President
cc: Mr. Harvey Hurlburt
CITY OF NEWPORT BEACH
TO: CITY MANAGER
FROM: Assistant City Manager
/� n'
March 4, 1969
SUBJECT: PARTIAL LIST OF CITY PROPERTIES WHICH COULD RECEIVE
MORE EXTENSIVE USE (EXCLUSIVE OF BEACON BAY AND BALBOA BAY CLUB)
Nam 'Of Property Location of Property Present Use
City Dump Property Extension of 19th and Abandoned borrow pit and
Whittier, Newport Beach refuse area. This 40 acre
parcel previously used for
City dump and gravel mining
operation. Dormant at
present time. Development
proposals to be solicited.
Webber Oil Lease Bouchard and Hamilton This 4.8 acre parcel
Property Huntington Beach encumbered with oil lease
dated 1951. Lease dominates
central 2.5 acres of property
until such time as oil is
no longer produced, despite
1971 tentative expiration
date. Estimated current
revenue from oil production
is $550 per year.
Brookhurst and Southeast corner of This 1.99 acre parcel formerly!
Adams Property Brookhurst and Adams used-as supplement to City
Huntington Beach water system. Presently
being used for outdoor bill-
board advertising purposes
with approximate return of
$550 per month. Pending
outcome of updating of
appraisal report, long -term
lease(s) to be negotiated for
use of entire property
assuming abandoned water wells
can be placed underground
and.access assured by easement.
(continued)
City Manager Page 2
March 4, 1969
Name of Property Location of Property
Present Use
Abandoned Sewage Northeasterly of Newport
This 7 acre parcel is former
Treatment Plant Shores Residential
site of City sewage treatment
Community, Adjacent to
facility. No use at present
Santa Ana River and
time. Among possible uses
Orange County Flood
which have been discussed
Control Channel
is a possible interim out-
door pistol range to serve
needs of Police Department
until new police building
is constructed.
American Legion 15th and Bay Avenue
Present lease with American
Property
Legion expires 1976. Possible
uses of property at that time
include conversion to public
beach, development of City
marina, expansion of Marina -
Park trailer facility, or
extension of lease with
American Legion.
West Newport Water 16th and Monrovia
This 1 acre site holds two
Property
abandoned water storage tanks
and a number of miscellaneous
structures previously used
by the water division. In
addition, the property has
an extensive network of active
underground water lines which
serve the West Newport area.
One of the two water storage
tanks is useable and will be
in operation as an equalizing
reservoir as the West Newport
area becomes more intensely
developed. This property is
also being used by KOCM Radio
and Newport Cablevision for
radio and CATV transmitting
facilities. The KOCM lease
also provides for a small
storage and transmitting
building. The Public Works
strenuously objects to any
other use of the property which
would interfere with the exist-
ing water lines and future
water uses of the property.
JPD;ep JAMES P. DE CHAINE
w.
VORONAEFF REALTY CO.
ARE CODE (714) 646.1200
1515 WESTCUFF DRIVE - UI-M -205
i
JU-
NEWPORT BEACH. CALIFOR �•_
iJ / )
March 27, 1969 ✓ �
Mr. Harvey Hurlburt
City Manager F
City of Newport Beach
City Hall
3300 Newport Boulevard
Newport Beach, California 92660 %
Dear Mr. Hurlburt:
I am President of Voronaeff Realty Co. in Newport Beach. I specialize
in selling large investment properties.
Why has the City of Newport Beach selected Coldwell Banker Company
to exclusively represent the City of Newport Beach in real estate
matters?
Do any elective officials, appointive officials, or City employees own
stock in Coldwell Banker Company? Options to purchase stock in Coldwell
Banker Company should be disclosed, if any, and also future purchase of
Coldwell Banker Company stock should be prohibited by any elective
official, appointed official, or City employee of Newport Beach if Coldwell
Banker Company has exclusive representation of Newport Beach.
All realtors should be allowed to present their clients' offers on City of
Newport Beach property that is for sale or lease. This would allow the
citizens to benefit from the best offer. Coldwell Banker Company would
only be exposing property to their clients, and clients of other Orokers
would not be exposed to it.
It is not a standard procedure for cities or owners of large investment
properties to give exclusive right to sell to one broker or company, as
large properties need broad exposure. A city should not give an exclusive
right to sell to one broker or company.
The City could advertise the property, take offers from all brokers and
also retain the right to sell or lease directly without a broker. Dealing
Mr. Harvey Hurlburt
March V. 1969
Page 2
with all brokers would insure the highest sales price or lease amount
to the City.
U the City needs expert advice to market the property through all
brokers, I would disqualify myself from selling or leasing any property
owned by the City of Newport Beach, and offer my time free of charge
as a consultant to the City of Newport Beach.
Sincerely.
�
Don Vorov
naeiff. I - SRA
DV:mw
cc: The Mayor, City of Newport Beach
4.: The City Council, City of Newport Beach
/Veaposd a444on - Me" / o"d al Rea&&%%,
401 N. NEWPORT BLVD., NEWPORT BEACH, CALIF. 92660 TELEPHONE 646 -1671
April 7, 1969
TO: CITY COUNCIL, CITY OF NEWPORT BEACH
FROM: NEWPORT HARBOR -COSTA MESA BOARD OF REALTORS
SUBJECT: DISPOSITION OF CITY'S SURPLUS PROPERTIES.
BOARD OF DIRECTORS
J. PETER RARRETT
PRESIDENT
CHARLES S. DREYER
FIRST VICE PRESIDENT
CHARLES F. COLESWORTHY
SECOND VICE PRESIDENT
JAMES B. WOOD
SECRETARY.TREASURER
JOE CLARKSON
CURT DOSH
ARTHUR E. GORDON
WILLIAM C. RING
PERRY ZIMMERMAN
GLENN MARTIN
EXECUTIVE OFFICER
EVALYN RUNING
ADMINISTRATIVE SECRETARY
The Directors of the Newport Harbor -Costa Mesa Board of Realtors submit
the following recommendations and suggestions:
1. It is suggested the City solicit consultation and market-
ing proposals from other firms and /or individuals with
reference to the disposition of surplus properties of the
City of Newport Beach.
2. Should the City so desire, the Board of Realtors will
appoint a committee to assist in evaluating and /or analyz-
ing proposals submitted.
3. It is suggested that all properties should be submitted on
an Open (bid) basis, and the broker or brokerage firm sub-
mitting an offer acceptable to the City should be paid a
commission in accordance with the schedule of commissions
published by the Los Angeles Board of Realtors.
Respectfully submitted,
,:: n ""j�
J. Peter Barlett, President
Newport Harbor -Costa Mesa
Board of Realtors
SIrI,QN:'
FILE
LV
w� fl
�fi ' &
REAL ESTATE ADVISORY COMMITTEE
COMMITTEE MEMBERS:
John T. Boyd, Jr., Realtor.
Business Address: 3629 East Coast Highway, Corona del Mar, Tel: 675-5930
Residence: 1600 Warwick Lane, N.B. ri'el: 548 -4743
William D. Clark
Business: Goosen & Clark, 4500 Campus Drive, N. B. 546-2055
Residence: 2421 Sierra Vista, N. B. 548-2564
Curt E. Dosh, Realtor.
Business: .1730 West Coast Highway, Newport Beach 642 -6472
Residence: 1606 Santanella, Corona del Mar 673-3468
R.C. Greer, Realtor,
Business: 3355 Via Lido, Suite 205, N.B. 673-9300
Residence: 1127 Berkshire Lane, Newport Beach 646-7980
Robert S. Hirsch,
Business; Coldwell, Banker a; Co., 2200 East Coast-Highway. 675 -2000
Residence:. 2105 East Balboa Boulevard, Balboa 675-2047
Richard Kimble,
Business, United California Bank, 2712. West Coast Highway 646 -2431
George Hamilton Jones, M.A.I.
Business: 3471 Via Lido, Suite 207 673.6733
Residence:. 904 South Bay Front 673 -3427
ALTERNATES:
Robert Fleming, Realtor,
Business: 3700 Newport Boulevard 675-2464 `
Residence: 2003 Baja, Newport Beach 644 -2158
G.E. "John" Semple, Realtor
Business: 2515 East Coast Highway, CdM 675-2101
Residence: 572 Seaward,Road, Corona del Mar 673-4969
EX- OFFICIO:
J. Peter Barrett, President, Realty Board.
Business: 1605 Westc.li'ff Drive 642 -5200
Residence': 231 Kings Place 548 =6646
Glenn Martin, Executive Officer, Realty Board
Business: 401 North Newport Boulevard 646 -1671
Residence: 4807 Cortland Drive 673-4038
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
C O N F I D E N T I A L
TO: MAYOR AND CITY COUNCIL
FROM: City Manager
L:
9_
k
"X 'v w w
SUBJECT: SELECTION OF REALTY FIRM ASSIST ITY REAL ES MATTERSi
j
As instructed by the Cit o cil, the staff has pre red is orica l
information on the Brookhurst and Adams property and has met with the NewportCPLI�c
Harbor Costa Mesa Realty Board Executive Committee. I will review these matters
herein and outline possible courses of action.
April 4, 1969
STUDY 'SESSION
AGENDA ITEM 7
I think it should be kept in mind that the City Council was anxious
to proceed at an early date with the leasing or sale of certain City properties
in order to maximize net revenue which might be accumulated for civic center
financing purposes. On this basic premise, I feel that the City Council took
the proper approach. However, if it is considered important to appease some
of our local realtors for public relations purposes, then there are definitely
other courses of action which should be followed.
Contrary to what some of the realtors in the community may contend,
there are not many firms which have in house capability of providing appraisal
information services, conducting their own economic market feasibility studies,
and preparing extensive land use data necessary for any meaningful analysis
and organized program of evaluation. While there may be a few well- qualified
firms in the Newport Beach area with this capability other than Coldwell Banker,
and while it is possible that the City could have chosen another firm, addi-
tional time would have been lost in the process without any offsetting technical
or economic advantage to the City. Several of the responsible realtors in
the community with whom we have talked during the past two weeks have agreed
that Coldwell Banker and Company is a very capable firm and has the talent
within its organization to very capably assist the City with this project.
Many of these realtors also recognize that much of the negative reaction from
• few of their colleagues is predicated upon the conclusion that they may lose
• possible commission on the leasing transactions if Coldwell Banker and
Company is retained on an exclusive basis. As the letter of proposal from
Coldwell Banker and Company indicates, they "agree to share commission with
any licensed real estate broker acceptable to you (City), it being under-
stood, however, that Coldwell Banker and Company shall not be obligated to
accept as its share less than one -half of the regular commission rate." This
clearly provides for the sharing of commissions in such instances where any
given realtor in the community submits a firm lease proposal on behalf of a
qualified client for which that particular realtor is acting on an exclusive
basis. Should that particular client submit one of the most favorable lease
proposals, there is an excellent opportunity for that particular real estate
broker to share with Coldwell Banker and Company any real estate commissions
involved.
Mayor and City Council Page 2 April 4, 1969
Jim DeChaine met with the Executive Committee of the Newport Harbor
Costa Mesa Board of Realtors on Tuesday, April 1. It was a very friendly
session with none of the approximately ten members present reflecting any
signs of hostility or bitterness during the meeting. Members present recog-
nized that it is merely a handful of their over eight hundred member repre-
sentatives that have expressed any major opposition to the City retaining the
services of a single realty firm to assist with the project. While many other
realtors have obviously sided with their colleagues, many are not as concerned
as long as the end result is the most economically advantageous to the City.
At this meeting, it was learned that Pete Barrett, President of the Board,
had made contact with Mr. George Coffin, one of approximately thirty so- called
real estate counselors in Southern California, for an outside independent
reaction. While Mr. Coffin apparently indicated that it was perfectly accept-
able to utilize the services of a firm such as Coldwell Banker and Company,
it was his suggestion that the City probably should have solicited bid proposals
from other qualified realty firms in the area before making any decision to
retain the services of any one particular firm. Mr. Coffin suggested that it
might be well for the City to consider allowing the Newport Harbor Costa Mesa
Board of Realtors to establish a Committee which would call for and review
these proposals submitted to the City for consideration. Mr. Coffin indicated
that the real estate market should be saturated with information pertaining
to these proposals and that all proposals should be considered on an open bid
basis. Mr. Coffin apparently suggested that if a firm like Coldwell Banker
was used, that it be retained on an over -ride basis, i.e., the City pay them
a separate commission for the analysis work which they would undertake and
thereby enable all realtors in the area to have an equal opportunity to sub -
mit lease or sale proposals on a non - exclusive and full commission basis for
consideration by the Committee which would be established by the realty board.
If a firm such as Coldwell Banker and Company was not retained, it would likely
be necessary for the City to retain the services of a qualified M.A.I. appraiser,
another firm to conduct economic feasibility studies regarding the marketing
of the properties, and a variety of other services that would result in addi-
tional cost to the City. During Monday's Study Session, Pete. Barrett and
possibly others will be reviewing Mr. Coffin's suggestions and other informa-
tion discussed by the Executive 'Committee of the Newport Harbor Costa Mesa
Board of Realtors. If the City Council is inclined to have various lease
proposals considered by a Committee to be appointed by the Newport Harbor
Costa Mesa Board of Realtors, a project coordinator would have to assist the
Committee with the solicitation and analysis of proposals submitted. This
project coordinator could be a member of the City staff and /or another out-
side consultant which would work with the City on a fixed fee basis. Mr.
George Coffin has apparently suggested that his paid services would be avail-
able if desired.
The overwhelming interest and concern on the part of most realtors
in the area centers around the City property at Brookhurst and Adams in Hunt-
ington Beach. It is estimated that during the past four years, the staff has
received up to approximately thirty calls per month, and that at least 350
calls were received during the past twelve months. Most of these inquiries
have been by telephone, although about ten per cent have either come from
realtors who have dropped into the office or expressed their interest in the
Mayor and City Council Page 3 April 4, 1969
property in writing. Exhibit "A" attached lists the individuals and organiza-
tions on record which have expressed their interest during the last four years.
You will note that many of these have contacted the City between three and ten
times each during the last four years. A second list, marked Exhibit "B ",
reflects the written proposals received for development of the Brookhurst and
Adams property during the last four years. In prior years, these numerous
inquiries and proposals have not been discussed with the City Council each
time one has been received because no firm policy decision had been made by
the City Council to either sell or enter into a long -term lease agreement
for the use of this property.
A third list, marked Exhibit "C", indicates realtors who have alleged
that they represent Roy Sakioka, owner of the adjacent acreage slated for a
possible area -wide shopping center complex. Mr. Sakioka is one of the individ-
uals who has a strong interest in this property. A copy of a letter from Mr.
Sakioka dated December 2, 1965 is also attached for reference. In addition, we
have on file a more recent plot plan which proposed to purchase a portion of
the City's property and exchange a portion for property owned by Mr. Sakioka
at another location. In a conversation with Mr. Sakioka two weeks ago, we
attempted to learn exactly which realty firm or firms on the list were act -
ing on his behalf in conjunction with negotiations with the City. We were
advised that the only agent on the list with whom he wished to deal on this
matter was Mr. Sam Keyes. When questioned as to whether any of the other
realty firms listed in Exhibit "C" were representing him, he firmly responded
in the negative. This is mentioned because of a recent contention of Jack
Mullan that he is an agent for Mr. Sakioka.
Mr. Mullan and others have also recently contended that the firm of
Coldwell Banker is not a friend of the Newport Harbor Costa Mesa Board of
Realtors, does not give fair consideration to lease or sales proposals sub-
mitted by other realtors in conjunction with clients they serve, and had a
recent falling -out with The Irvine Company. From information gathered to date,
we have not been able to substantiate any of these allegations. In fact,
members of the Executive Committee of the Newport Harbor Costa Mesa Board of
Realtors spoke quite highly of the firm of Coldwell Banker and Company. It
should also be noted that the general membership of the Board of Realtors
elected Bill Farnsworth of Coldwell Banker as its President for 1967. In
addition, through recent conversations with Al Auer of The Irvine Company, we
have learned that Coldwell Banker is one of their few good commercial property
brokers and that The Irvine Company has had a very good relationship with this
organization for a number of years. While Mr. John E. Murphy, President of
the Irvine Industrial Complex, indicates that the exclusive arrangement which
they had with the Coldwell Banker firm was allowed to lapse in 1967 as a result
of new merchandising techniques being used by the Irvine Industrial Complex
which did not lend themselves to an exclusive listing at this time, Coldwell
Banker did perform a very satisfactory service for the Complex and continues
to be retained by The Irvine Company to merchandise numerous commercial proper-
ties on the Ranch.
It would appear that the City Council can move in one of several
directions in resolving this matter. It can retain the firm of Coldwell Banker
and Company to provide the realtor services needed. This would probably pro-
vide the most economical advantage to the City.
Mayor and City Council Page 4 April 4, 1969
The second approach which the City Council may wish to consider would
be to allow the Newport Harbor Costa Mesa Board of Realtors to appoint a spec-
ial Committee to call for and review proposals to lease or purchase the City
properties. This would entail additional time and expense, as noted above,
but would provide a satisfactory means of appeasing some of the realtors in
the community who have become disturbed at the prospect of the City retaining
any particular firm to assist it with the leasing or sale of City property.
A third approach would be to allow other qualified realty firms to
submit a proposal similar to that made available by Coldwell Banker and Company.
The City Council could then select the firm or firms which appear to be the
most qualified to undertake the assignment of conducting the appraisal studies,
economic market feasibility studies, compile land use data, etc. prior to solic-
itation and analysis of lease or sale proposals. While this approach might
appease those realtors who are now disgruntled, it would, of course, delay the
project and result in revenue losses. I think it would also be fair to assume
that Coldwell Banker would emerge as the most competent in terms of broad in-
house technical capability and greatest access to potential purchasers or
tenants.
If the City Council decides to move in some direction other than to
retain the immediate services of Coldwell Banker, it is suggested that the
Brookhurst and Adams property not be made a part of the package and that the
staff be allowed to handle this parcel directly.
The Brookhurst and Adams property was allowed to remain as part of
the Coldwell Banker proposal for two reasons: 1) It was assumed that they
would move rapidly and obtain a tenant at an early date, thus maximizing
revenue from this source,; and 2) it was concluded that Coldwell Banker, as
specialists in the commercial and industrial realty field, would be capable
of negotiating the highest revenue lease on the property as opposed to what
might be accomplished by City alone. If we are to experience delays, we lose
the advantage of number one and if we are going to end up with a bidding
arrangement or a group committee arrangement we will lose the advantage of
number two. This being so, there would be no logical reason for the City
paying a realtor's commission since there would be no economic advantages
to justify it.
HARVEY L. HURLBURT
HLH /JPD:ep
enc.
EXHIBIT "A"
LIST OF INDIVIDUALS AND ORGANIZATIONS
EXPRESSING WRITTEN OR VERBAL INTEREST
IN BROOKHURST AND ADAMS PROPERTY DURING LAST FOUR YEARS
1. Jack W. Mullan, Realtor
2. Laura H. Klein, Realtor
3. Hal H. Collins of E. L. Bensen Realty
4. Curt Dosh
S. C. W. Goode
6. E. L. Bensen, Realtor
7. Chris Lindley
8. Bob Alleborn
9. W. R. Bennett (Rinker Development)
10. Jim Mackle (Coldwell, Banker $ Company)
11. Elton Burnett (Walker $ Lee)
12. Joe C. Curry (Currand Realty)
13. M. L. Ruth
14. Mrs. Margaret Lightfoot
1S. Albert A. Sparliss (Coldwell, Banker 8, Company)
16. Rich Pomeroy (Jack -in- the -Box Restaurants)
17. Ken Harris, Realtor
18. Neil H. Durkee (Land and Industrial Properties)
19. Robert L. Unger
20. Andrew Johnson (Realononics, Inc.)
21. Lefty Murdock (The Most Company)
22. Vic Blurton (Coates and Wallace)
23. Dr. G. J. Camaras
Exhibit "A"
Page 2
24. John E. Marr (Coldwell, Banker 8 Company)
25. Lindsay P. Garnett (W. Ross Campbell Company),
26. Glenn Rice (W. Ross Campbell Company)
27. Gardner L. Hoch (R. A. Rowan $ Company)
28. Mr. I. Eric Sundt, Rotronic Corporation (Service station - car wash)
29. C. W. Warren (Shepherd 8 Tupper, Inc.)
30. George D. Buccola Investment Company
31. Joseph P. Hudson (Park Gate Realty)
32. Harold B. Jepsen ( Jepsen Realty)
33. Thomas T. Rousselot, Humble Oil and Refining Company
34. Mr. Dickey, Humble Oil and Refining Company
35. John J. McCloskey, Jack -in- the -Box Development Corporation
36. Adele S. Sprague (Prindiville Realty)
37. A. 0. Hedblom, Mobil Oil Corporation
38. H. S. Ebersole (Realtor), Edwin G. Hart, Inc.
39. Herbert N. Lightle, George Taber Company
40. Kenneth D. Hinsvark, Attorney
41. Richard A. Meredith, The Meredith Company
42. Robert Wheeler (Real Estate)
43. Mr. Verner Eichholtz (Realtor)
44. Bertram Haymes, D.D.S.
4S. Golthea Sisson, L. J. Swift 8 Associates
46. Victur Blurton, Manager, F. M. Tarbell Realty
47, Reg Wood, Reg Wood Company (Realtors)
48. Jerry King, Deane Bros.
49. Sherman A. Smith (Real Estate Development and Investment)
50. Richard Marshall (Bensen Realty)
Exhibit
A!
Page 3
51. David M. Garland, Attorney
52. Charles Franklin (Realtor)
53. Gerald Lance, Gerald Lance Realty
54. E. M. Schilemann, Strout Realty
55. Dean Royce, Percy Goodwin Company
56. Roger S. Watson, Scottco, Inc. (Engineers, Developers)
57. Martha Holt (Realtor)
58. Thomas J. Doyle
59. Bill Miller (Bill Miller Realty)
60. Ed Bach
61. E. V. Kadow, Fountain Valley Land Company
62. E. W. Harvey
63. Arnold Podsade
64. Dan Donahue, Coldwell, Banker $ Company
65. Charles Lotz, Security First National Bank
66. Mark Sullivan (Realtor)
67. William D. Clark, Goossen $Clark Associates
68 Hiram DeFries, Shell Oil Company
69. Fred J. Barbour, Commercial Real Estate Broker for A. J. Pellegrini
70. Steve Boyce (Realononics)
71. E. Clark Beaumont (Realtor)
72. George Salata
73. Samuel W. Murdock, Attorney
74. Bernie Svalstad, Real Estate Representative, Foo�naker, Inc.
(Jack -in- the -Box) oration
75. Eric L. pridonoff, Rite Engineering $Manufacturing Corp
76, Shirley Meunier, Calhoun Realty
Exhibit "A"
Page 4
77. N. J. V. V. Green
78. William A. O'Connor
79. L. S. Mack, Benson Realty
80. C. R. Morgan, The Morgan-Morf Companies
81. Sam Keyes (Realtor)
NOTE: Many of the above individuals and organizations have contacted this
office between three and ten times during the last four years.
In addition to those noted above, there have been numerous addi-
tional verbal inquiries made without specific names being left
for the file.
EXHIBIT "B"
WRITTEN PROPOSALS RECEIVED ON BROOMMT AND ADAMS PROPERTY
DURING LAST FOUR YEARS
1. Roy K. Sakioka (Long -term proposal)
2. Columbia Outdoor Advertising (Short -term proposal)
3, Whitaker Sign Company (Short -term proposal)
4. Ken Harris, Realtor, on behalf of Gulf Oil Company and Jack -in- the -Box,
Inc. (Long -term proposal)
S. Southland Corporation (7/11 Grocery outlet) (Long -term proposal)
6. Willis J. Clemmons, Carter Sign Company (Short -term proposal)
7. Mr. I. Eric Sundt, Rotronic Corporation (Service station - car wash)
(Long -term proposal)
8. Mr. J. F. Fleming, Humble Oil & Refining Company (Long -term proposal)
9. Mr. Thomas T. Rousselot, Humble Oil $ Refining Company (Long -term proposal)
10. Mr. McCloskey, Jack -in- the -Box, Inc. (Long -term proposal)
11. Mr. Robert H. Beadle, Southland Corporation (7/11 Grocery outlet)
(Long -term proposal)
12. Mr. A. Hedblom, Mobil Oil Company (Long -term proposal)
EXHIBIT "C"
REALTORS ALLEGEDLY REPRESENTING ROY SAKIOKA
1. Jack W. Mullan
2. Verner F. Eichholtz
3. Sam Keyes
4. Mrs. Margaret Lightfoot
S. Reg Wood Company
a
PACKING Hausa 646.1197 OPP= TRLRFRGNEs 545.8611
{*6.1905
SAKI®KA PALMS
GROWER. AND SHIPPER
14850 L SUNFLOWER AVL
OANTA ANA. CALIFORNIA
December 2, 1965
Xr. Harvey L. Hurlburt, City ilanager,
City Hall, City of Newport Beach,
Newport Beach, California.
Dear Sir:
The following proposal is herewith submitted to the City of Newport
Beach by the undersigned, whose principal headquarters and offices are located
at the address indicated above, for the following purpose, to wit:- To acquire
by leasehold, that unimproved parcel of land, situated at the Southeast Corner
of Adams ,Avenue and Brookliurst, in the City of AuntirZton Beach, County of Orange,
State of California, the dimensions of said parcel being approximately 300' x 3001,
under the following gencral terms:
(1) I will enter into a leasehold acreement as lessee, with the City of
i?ewport Beach as lessor, coverin; tiie above described parcel of land,
for a term of twenty -five (25) y -arm, the rental of subject parcel
to be based upon six- percent (65) of the fair market value, said
fair zarket value to be determined by appraisal, or by such method
as would be fair and equitable to the parties concerned, and rental
to be paid to the City, either monthly, quarterly, or at the City's
Option.
(2) The City shall retain all right, title, and interest in and to the
oil, mineral, and water rights, and further, in the event of a water
emer -ency during the term of tlie' lease, the City shall have the right
to install underground facilities for the purpose of augmenting their
water supply, since it is not contemplated that any major improvement
will be erected on the subject parcel.
(3) I gill agree to take over and honor the contract or contracts present-
ly in force, by and between the City and the present lessees, relating
to the signs presently affixed on the subject parcel, until the period
of time as set forth in said contracts terminate.
Summary* I believe that the major aspects of this proposal such as: (a) rental
based on fair market value, (b) Retainment by City of oil, mineral
and water rights, (c) Water emergency clause, are the focal points
around which the City's interest revolves. There are, of course,
the usual standard clauses, concerning which I am sure will be
amicably resolved at a meeting which can be set at a date convenient
to you.
Looking forward to your early reply, I am,
Very respectfu your //,
a�1
1 K. Saki Oka
Realtor
COUNCIL ACREAGE, COMMERCIAL & INDUSTRIAL PROPERTIES
S TI : -n/ i l0 ` 4600 CAMPUS DRIVE - SUITE svx 200
NEWPORT BEACH, CALIFORNIA 82660
FI ) .e N(i � t ��.t Y COUNCIL y (714) e4• �a
.(sJwJ FW''JV�" G. �1�.� �i
v
DISPOSITION: i
AV
>u Mdtic� �C, 1969 ( L „
y �taEi. FILE:
Ctty o unt 1` Ui �:r t ;' c �' L z
Ctty of Newport4each Wit, I „} ; �
Ctty Hall _ J
Newport Beach, Californt
Gentlemen: Ewa ✓Gi;,n�i J4r
To my amazement and cha gran, I arrived home from a hard day at
my Realty 9,fftce, located to Newport Beach, to be confronted by
a headline to the Datly Ptlot that reads, "City Signs Ftrm To
Cash In On Properttes ". It could be shortened to read "Ftrm To
Cash In ". I am amazed at the Natvete of people to postttons of
public trust to enter Into contracts blindly and obltvtous to the
rights of other people concerned.
I. as well as many, many other Newport Beach Real Estate Brokers
have dealt to Real Estate to this area, have paid our business
tax, plus all other taxes, to the Ctty of Newport Beach, have
spent much of our earnings wtthtn the Ctty of Newport Beach and
have, over the years, done our best to Improve the Image of the
Ctty of Newport Beach, such as serving on ctvtc commtttees and
other commtttees wtthtn the Chamber of Commerce and other groups
for the tmprovement and betterment of the area, and I mtght add,
wtlltngly and without monetary compensation. Personally, I have
matntatned an offtce and residence to Newport Beach for over
sixteen years. I have dealt wtth a good many properties to the
Ctty, as have my colleagues. Furthermore, I have never heard
of a public body, supported by the electors and taxpayers, con -
tracttng wtth ONE farm to handle their properties for sale or
lease.
The newspaper article goes on to say that the contracting Real
Estate Firm has had an offtce to Corona Del Mar since 1961. It
fatled to mention that thts is merely a branch offtce of a main
offtce to Los Angeles County. What type of thtnktng could go
along wtth the Idea that one .firm could do a better ,job for the
Ctty than to Itst the properties wtth all Brokers and Brokerst
Offtces to Newport Beach, allowtng them the opportunity of sub -
mttttng sattsfactory offers to the Ctty of Newport Beach for
approval or rejectton. The article also states that this firm
has this client or that client. Would you believe all of the
cltents they mention happen to be cltents of all Brokers to Nero -
port Beach and elsewhere and tt mtght suprtse the Counctl to know
that the Real Estate Brokers to Newport Beach have other cltents
to their portfoltos that the contracting ftrm has never heard of.
Just what has thts "All powerful" ftrm done for the Ctty of New-
port Beach, compared to all of the other Real Estate ftrms to the
Ctty combined?
Realtor
ACREAGE, COMMERCIAL & INDUSTRIAL PROPERTIES
4800 CAMPUS DRIVE -. SUITwx2 200
NEWPORT BEACH, CALIFORNIA 82660
(714) 546-6414
PAGE 2.
If my memory serves me correctly, the Ctty of Newport Beach has
spent some Ctty funds for feastbtltty reports on the best us of
some of the properties tnvolved and then they hand a carte blanche
contract to one ftrm tnstead of an open sales listing to all
Brokers to Newport Beach.
It is my thinking and I belteve that of the majority of the Brokers
to thus area that tt is not necessarily the firm tnvolved, but
for ANY firm to receive such preferenttal treatment from a Ctty
Counctl is highly unethical. Personally, I regard this aotton
as wholly trregular to addttton to being unethical and creates
an extreme low for any governtng body. By virtue of this action,
tt would appear to elevate the contracttng firm to the htghest
posttton of Real Estate Sales and Servtce to the Ctty, whtch is
erroneous.
Stnce when has any professional been htred by the Ctty wtthout
ha vtng to prove thetr supertortty over all others? Stnce when
does the Ctty wrtte blank checks?
I would Itke to remind the Counctl that this is not your own
personal property tnvolved. .These properties belong to all of
the taxpayers, tncludtng all Real Estate Brokers Itcensed to do
business to the Ctty of Newport Beach.
Stnoerely,
Ru s FDRDY REALTOR �7
RF: of
cc: Newport Barbor -Costa
cc: Datly Ptlot
Mesa Board of Realtors
. . . . . . . . . . . . . . . . .. .T. . .
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ry
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warrem w. �bboms
real' estate investments
March 21, 1969
Co. COMMERCIAL • INDUSTRIAL . ACREAGE
City Council of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92660
Gentlemen:
Suite 200 • University Plaza • 4500 Campus Drive
Newport Beach, California 92660 • (714) 546.9040
.i N.gr�CiTy �,, •. .�e '
The article in Wednesday's Daily Pilot on the exclusive list-
ing given to Coldwell Banker for various city properties is
sickening. The million dollar free publicity given to Cold -
well Banker has cost me thousands of untold dollars in future
commissions. The unwarranted prestige given that firm by vir-
ture of your unjust action and the extolling newspaper article
will affect many of my customers and potential customers deci-
sion on doing business with Coldwell Banker rather than me,
this you can be sure. You have elevated their reputation at
the expense of every Realtor in Newport Beach.
The damage you and the Daily Pilot have done to those in our
profession is appalling, inexcusable and shows the little re-
gard, and contempt you must hold for real estate businesses
in this city.
Yours very truly,
WARREN W. GIBBONS CO.
?; / i�
Warren W. Gibbons
WG /ad
COPIES SENT TO:
tlnn rl:er
1'lor net
1'uMli. Wr,k: Director
P inonlny lhi eou'
nOther
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TO: CITY MANAGER
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
December 3, 1976
FROM: Administrative Assistant to the City Manager
SUBJECT: BEACON BAY LEASE
In response to your request that I research the Beacon Bay files to determine
if and when a subdivision map was recorded, it appears that Mr. Beek never ~
filed a subdivision map. However, Mr. Beek did file a record of survey on
February 28, 1939 in Book 9, Pages 42 and 43 in Orange County.
Also, at your request, the following is a historical summary of the City's
Beacon Bay lease:
Background: The Beacon Bay area was annexed to the City of Newport Beach in 1917
and the tidelands therein was granted to the City in 1919. The granting of the
tidelands to the City was reaffirmed by a court action in 1926.
The Beacon Bay area consists of approximately 10.9 acres which was acquired from
the Irvine Company in March, 1929. The remaining acreage was either tideland
trusts, or City property. On October 10, 1927, the City received a proposal
from J. A. Beek to lease the above property for an automobile camp. On November 9,
1927, the City agreed to lease Beacon Bay property to Mr. Beek.
Agreements with Mr. Beek:
November 9, 1927 -The City leased the Beacon Bay property to J. A. Beek.
A. Acreage: Tentative acreage figuration -12 acres .
B. Terms: 25 years ending on November 8, 1952.
C. Rent:
1. $10.00 per acre per year, increasing by $10.00 every 5
years until highest rent is reached in 1952 at $50.00
per acre.
2. The City receives 2 percent rental on all gross receipts
for the first 10 years of the lease,and for the last 15
years of the lease, this will increase to 5 percent.
D. Improvements to the Property:
1. Dredge channel connecting the lease premises with navigable
waters of Newport Harbor.
2. Fill and level the property.
City Manager
Subj: Beacon Bay Lease
Page 2 -12/3/76
3. Construct boat landing and docks upon premises.
4. Install streets, water pipes and necessary public
utilities.
E. Purpose of Lease:
1. For commerce and navigation.
March 3, 1930 -Amendment to 1927 lease. Purpose of lease is now not
only for commerce and navigation, but also for all
other wharf purposes .
July 18, 1938 -Amendment to 1927 lease:
A. Acreage: Incorporated to 19 acres.
B. Tidelands: In the judgement of the City Council, use of westerly
portion of said tidelands and uplands for industrial
use will be inimical to the best interests of said
City.
C. Terms: The 1927 lease was amended to have the 24-year starting
period begin on July 18, 1938 and end on November 8, 1962.
D. Purpose of Lease: Westerly portion (approximately 11 acres) to
E. Rent:
be used for parks, recreation, residential or educational
purposes which are not inconsistent with any trusts
imposed upon tidelands.
1. Westerly portion -
a. $30.00 per acre per year until 1942;
b. 1942 to 1947 -$40.00 per year per acre;
c . 1947 until end, $50.00 per acre;
d. The City is to receive 2 percent of rentals on gross
receipts until 1947, and at that time will increase
to 5% until the end of the lease.
2 . Easterly portion -
a. Up to November 1952 rent will be the same as is provided
in the 1927 lease. From 1952 until end of lease, the
City will receive $50.00 per acre per year;
b. Percentage of rental will be the same as is in the 1927
lease until 1952 when the percentage of rent paid to
the City will increase to 7.5%, until the end of the
lease agreement .
City Manager
Subj: Beacon Bay Lease
Page 3 -12/3/76
February 6, 1939 -Agreement and amendment of lease of July 18, 1938.
A. To provide that if Mr. Beek should default in making payment
under said lease agreement of July 18, 1938, that this will
not affect the sublessees.
B. Amendment also allows sublessees to pay their pro-rated share
of acreage and percentage rental directly to the City.
October 30, 1939 -Agreement to amend lease.
A. Purpose : To increase City's revenue by erecting more houses.
B. Extend the lease agreement of July 18, 1938 to end on November 9 ,
1971:
1. Extension only applies for residential lots which
were constructed prior to November 9, 1941 under
loans insured by FHA.
C. After November 8, 1962:
1. All rentals and payments by sublessor which qualifies
under terms hereof, shall be paid directly to the City.
2. Mr. Beek waives all claims to said rentals due from
sub lessees.
3. Mr. Beek is released from and after November 8, 1962
from obligations to acreage and percentage rentals.
May 1, 1941 -Lease and amendments to July 18, 1938 lease agreement.
A. Purpose: To improve land between yacht basin and land described
in amendments of July 18, 1938 lease agreement . Lease
contains similar recitals as found in lease of July 18,
1938 as to purpose and use.
B. Amend.s lease of November 9 ; 1927 as follows:
1. Term: For 21 years, 6 months, 7 days ending Nbvember 8 ,
1962, upon same terms and conditions as 1927 lease.
2. A 100 ft. strip is leased to Mr. Beek for parks, recrea-
tion, residential and educational purposes not inconsistent
with any trusts imposed upon any tidelands.
3. Rent for 100 ft. strip:
a. Acreage rental -up to November 1942, $40.00 per acre
per year.
City Manager
Subj: Beacon Bay Lease
Page 4 -12/3/76
b. From November 1942 to November 1947, $40.00 per
acre per year;
c. November 1947 until end of term, $50.00 per acre
per year.
C. Percentage rental of gross rent:
1. Until November 1947, 2 percent of sums received;
2. 1947 until end of term, 5 percent of sums received.
December 3, 1945 -Lease and amendments of former lease.
A. Westerly portion:
1. Acreage Rental:
a. To and including November 1947, $40.00 per acre per
year.
b. From November 9, 1947, to end of lease, $50.00 per
acre per year.
2. Percentage rental of gross rent:
a. Until November 8, 1947, 2 percent of all sums received,
b. Remainder of term, 5 percent of all sums recieved.
B. Rental for Easterly Portion:
1. Acreage rental:
a. Up to November 8, 1952, same as provided for in lease of
1927;
b. For remainder of term, $50.00 per acre, per year.
2. Percentage of rental of gross reciepts:
a. Up to November 1952 same as provided in lease of 1927;
b. For remainder of term from November 8, 1952 to November 8,
1962, 7.5 percent of all sums received from use of easterly
portion.
January 9, 1950 -New lease.
A. Acreage -19 acres.
B. Number of Lots -65
C. Terms -38 years (January 1, 1950 until December 31, 1987).
City Manager
Subj: Beacon Bay Lease
Page 5 -12/3/76
D. Rental
1. Westerly Portion -To be used for rental purposes with an
annual rental of $600.00 a month, plus 5 percent of gross
receipts for the first 13 years.
2. Easterly Portion -To be used for industrial use, construc-
tion and maintenance of wharfs, docks and pier, with an
annual rental of $350.00 a month, plus 7½ percent of gross
receipts for the first 13 years.
3. In addition to the above rents, lessee was to pay $1,000.00
annually for the first 13 years for the last 25 years of the
term beginning in 1963; the City is entitled to 33-1/3
percent of all gross receipts annually.
Conclusion:
The Beacon Bay area currently consists of 12 acres of the westerly portion and
is improved with single-family residences and apartments. There are 72 sub-
lessees in this area for residential purposes. The easterly 7 acre portion of
the lease premises, known as Balboa Yacht Basin, is improved with the following:
1. Marina containing 166 slips;
2. 56 storage garages;
3. 7 apartments;
4. Marine hardware store and shipyard;
5. Restaurant; and
6. Yacht brokerage office.
The entire Balboa Yacht Basin operation is under one lease to the Irvine Company,
California Recreation Company. All of the subleases expire on the same date as
the master lease, December 31, 1987.
Revenue received from the Beacon Bay area in 1975 is as follows:
Beacon Bay Leasehold Rentals
Beacon Bay Transfer Fund
Balboa Yacht Basin
TOTAL
$ 23,979.50
5,651.38
13,285.08
$ 42,915.96
The City receives 1/3 of this total, which amounted to $14,305.32.
I have attached an interesting letter from an attorney who responded to an inquiry
by Mr. Beek on the legality of subdividing over the City's tidelands.
/5os/~
ROBERT J. L0NG
RJL: i b
Mr. Jose~h A . Beek
Ba lbo a , vi a Ne wpor t Beach
C.s_lif o rn i a_
Dec::.r Mr . Beek :
Sc1cr::;;-,,en to, C.:_; lifornL-:.
J cJ n wu y 9, 1911.0
You h a ve r2 c:ue~.tea my 0 1.,i1.;.i ::w , ·:.s :::n ::o.tt or!le y specL::_j _i-
z in g in cons tit ut io na l IT1 clt tE:,rs , :_,s to 'Ah e th e r a n y cDn~,tit i.J ti on 2.l
restrictions concern :Ln 6 the p ro i_.er ty .:;_;:;~,_:,:;ed fro m t'r 1e City of
N e v:po :t t .6e&c h by you ::.;_nd v;hi ch y-:.::i G. now r,ro ""·,ose to s ub d ivi de , v;ould
interf ere with , or in any v.'a y r es tri c t, yo dr f,ro1·o ~;ed us e of the
property as a subdivision .
The constitutiona l re s trictions cont a ine d i n Articl e XV ,
Con s tj_ tution of C:.,_liforni 2_, concerning tidel .c:.11 ds , rel a t e to rL vi ga -
ti on a nd fi s h er ies.
The p c::,rticu l e;r quest i on i n volved ap-':e.::.i.r s to me to lr .. ve
been defir1i tely 2.nd c om~l e t,dr answe r ed in th e Ca.Se of Peor,l e vs ..
Californ i a Fi s h Co mp ~n y (1 9 1 3 ), 16 6 Ca l. 576, 1 38 P a c. 79. The
conc l ~s ions st:'lted i n this c c:1-se cov ':=rin s th e pr in c i p·_;l ro i nt
involv ed , ap~e a r on p ~ge 59 6 a nd pHge 597 a nd a re a s follows :
no i.,cr couc l ti sio ns ~~s to th e l c:,;,v on t hi s brcwch of th e c as e
ma y be sw1:u :~.ri zeci E s follow s :
1. Th e tide lands '-',re , e.nci fro m the beg i nn i ng o f o \.1 r
government h ave been, declj _c 2,ted to y ..1blic use for 1:..,urpo-
ses of na vig a ti on an d f ishery .
2. The title to these l Eods is, by the r eople, vested
i n the state i n tr~s t for s a id rublic uses . Th e ~dm i n i-
s tr a tion ~nd execut ion of thi s tr Ll s t is committed by the
cons titu tion to th e l eg i sJ.:.::-.tivej de p ,:;rta1en t, SLlb je c t to
certain e x p resseci r eser v a ti ons ,:-_n ci r es tricti c ns.
3 Tl..-.e ,·,-,\,-0 r•c-of' t 'r1e r t•-te ".')~ ~-r•·c t ee "re '"JOt ex·,·-r•ec<-C>d • 11 1::1-...,, 1~' v .--::. ,-, c;. c ... 21 l,, u......, ., ::.:.. 1 _ .tJ u J t •
They a r e commensu r ate wi th t he d~ties o f the tr us t . Every
tru s t ee h as the i mp lie d power to do e v ery thi ng necess a ry
to th e exec u tion a n d a d~inistr a tion of the trust.
4. As the s t a te h a s the p o ~ers nec essary to the e xe -
cuti on an d 2.d minl s tr a ti CJ n of th e trust , i t fo ll ows th::-it lt
ma y dis p o ::3e of the s e l s.nds i n the 2-cfa1i n istr a ti on of the
tr-us t • i n such me n ner c:;s the i1 , ter e s t s o f ,!l _~:_vi 6 ,, tio:0. may
re ~u ire . One of the dut i es of th e tr ust i s to ada pt the
l a.nd to the use for Jl,}_yig_L1:J;J gn i n the b e st ma nn e r. If,
in so :::.do pt i ng the tide -""l cXlUS fo r this use ' it i s found
nece ss.s_ry or c1.uvi ss b le, i ri c:i.id of the use , to cut off p or-
tions of' it f rom access to na.vi ga b le •,;a ter, s o that they
11 b-2 come w1 :::tviclil ;1 ble for rnvig s.ti,::m , the st i..i.te h a s fiOVier
t o e x clude suc h )Ort i ons f rom the pub lic 0se and , to
t ha t extent, revoke the o ri g i nal ded ic at ion .
5. V✓h en this h '.:J S b een done in tne re g 1;.L 1r a d.ministr9.-
tion of the trust, th e land thu s excl~ded from lise for
rt '.1.v i 6 at i ort ml y bec crn e p ror,riet :::ir y L ,rncl , no t ::~ubject to
the ~ublic use , a n u it may th en be alien a ted ir r evoc ~bly
by the stste for private use to p riv~te in dividua ls.
, 6. When the sta te, i n th e e xercise of it s discretion
as trustee, h as decided th at portions of the tide land
s h ou l d be thus excluded fro m n a vigation and so l d to
private u se , it s det,.=:rmin a tion is concL1sive upon the
c oJrts; but s t a tutes purporti~g to au thori ze an abandort-
ment of s uch )lib lic use will be carefully scgnned to
ascer t a in ~h ether or not such wa s th e l eg i s l a tive i nten -
tion , a nd th a t int en t must be cle a rly e xpressed or neces-
s -:~rily implie d . It will not be i1.1 p lied if a ny other
i nferen ce is re asorrnbly pos sible. .4.nd if any i n ter pre-
t a ~i 8n of the stu t u te is re as oh a bly possible which would
not i n volve a destructian o f the public use or an int ent ion
to termin ate it i~ violation of the tr us t, the co ur t s will
g i V'2 the s tJ. tu t e such i .::-1 t e r preta tio11 . u
In this v a rticul q r case the ti de l ands in q uestion h ~ve
been fille d und 12r 1:.i ro1Je rty a utnori ty, th e l a n d filled being ba c k of
the bulkhead line est 0:i.bl i s h eri by the United St2.t es . With r eference
to the effect of the bulkhead lin e , the CaliforniL Supreme Court,
in People vs . Ca lifo rn i a Fish Co., Supra, at p~ge 599, s t a t ed a s
follo ws:
11 v:i th regard to t'ne h a rbor lines fix e d by the United
Sta te s , it is clei.u th:,l t th:L s i s the equivalent of a
license to the sta te to fill in the l a nd between them
and the shor-e; either be fo re or a.fter the erecti-::m of a
wa ll on th e esLiblished line.11
The f a ct tha t th e p::1rtic11l =1.r l a n d h a s been fille<i 3nci is
no longe r ava ilab le for the use of' navig a tLJn :i na f i s h er ies, ap J ea rs
definitely to h a ve been es t ab li shed by a number o f l eg i s l a tiv e acts,
incl uding Chap. 2 00, Statutes of 19 3 1. Thi s a ct c onta i n s, in the
second section, af t e r des cribin g the ord ina ry hi gh tide line , th e
following s t a tement:
11 .A ll l a nds lyj_ng b etv;een s a id orctin-J.ry high tide l ine
h e r e tofore described, and the u~l~nds hereto fore
described, c on s titu te n a tura l a ccr e tion t o s a i d upl a nds
and b e long to and :::.re .':1 p=.=-~r t o f sa id u p L:rnds . fl
~ith reference to the right o f th e s t a te t o t a ke th e a ction
in d ic a t e d by th e s t a tut e c .ited :,bove, the C::.l i fornL,. 2,upreme Cour t,
i i1 Feo _;_J le vs . Ca lifon1i ti Fi ::.h Co ., Su )r&, on _µ,,.ge .535, st:,:t e s the
following princip,J.l :
nr t is ,:~lso 3ettled th ~t in the e_...;_;nj_n istr 2.t i•:::n o f this
tr us t when the ;i L 1 n or sys t em of i ::nprovement or develop-
meri t adopted by the sta te for the i)rornoti ,x1 of' n e.v i g ,.,_tion
and coJrnerce cut3 o f f 2. p:>-.r t of th e ::;e tiQe l:01.nds or sub-
mer~ed l ~nds fro~ the publ ic ch ~nne ls, so th ~t t h ey ~re
n o lon ger useful f or n :_,, vi;;c. ti-x1, the st:,;_ te rn::.:.y t h ereuf.)on
sell a n d d is po s e of such e x clud ed l s nds into p riva te
o wne r ship or pr ivate us e s , thereby dest ro ying the public
e 'J.:::ernen t in s ucr1 c-o rti ·~;u o f the l e n d s u nd givi ng them
ov e r to the g r a nt ee , f r ee fro m publ i c control end use.11
In the p resent c a se , of co urse , the s t a te h a s not ~uth o rized
the ~ale of the l and s , but certa inly there i s no qu es tim1 of th e
ri ght of the st&te eve n to sell such l ~nds as ~s y be back of Fetier ~l
bL-i.lkhe::1.d lines whi ch h ::i.ve be en f i l l ed ,:!,nd s o 2.re no longer physic a lly
av a ilable for th e purpose s of n a vig a tion or fish e rie s .
The cc1.se q u oted a bove cites rw.rne r ous c a ses ;=_;_s a uth or ity
f o r thi s pr inci p le.
From a c ons i der:.:1. tio.n of the '.:.i bove , it seei u.s to mP. the~ t n o
quest i on can ex i st a s to the proper use of the l and l eased by you
from the City of Ne w~ort Beach for re-lease for r es i uenti &l purposes.
Ve ry tr ~ly y ours ,
.e:vr : LP
December 2, 1977
Assemblyman Ron Cordova
23861 El Toro Rd. -Suite 206
El Toro, California 92630
Dear Ron:
(714) 640-2151
I received a copy of C. E. Parker's letter to you, dated
Novemb er 21, 1977. Please be advised that the City has re-
viewed these issues in detail with ~r. Craig Taylor and his
staff of the Attorney General I s offi ce. There is no sub-
stance to the allegations of Mr. Parker. Th e City still
supp orts and wishes AB 1422 to be processed and signed into
l av✓.
Several months ago the Beacon Bay Co mmunity Association sub-
mitted a copy of AB 1422 to the Fi rst American Title In sura nce
Company and asked the Insuran ce Company if AB 142 2 was adequate
to permit title insurance. In other words, would AB 142 2 suf-
ficiently remove the public trust over th e filled tidelands to
permit a title company to give title insurance. Attached, you
will find a letter from Mr. Donald B. Da vid son, Sen io r Civil
Engineer, Tidelands and Waterways, for the First American Titl e
Insurance Company. Mr. Davidson recently left the State Lands
Division and is extremely knowledgeable on tideland s. Actually,
Mr. Davidson vmrked vii th the City several years ago v1hen Assem bly -
man Badha~ introduced the Beacon Bay Bill. You can see from Mr.
Davidson's letter that he believes AB 1422 is sound and would
permit title insuran ce policies on the residential lots over
filled tidelands in Beacon Bay.
If you have any questions with respect to Mr . Davidson's let ter,
please feel free to call either me, Mr. Forbes, President of the
Beacon Bay Co mmun ity Association, or Mr. Davidson directly.
Thank you for your continued cooperation.
Sincerelv,
~ -
\ (/{l (cc,··f ·:)_ L ~/t·v·~-----
. ' ROBERT L. \1!YNN
City Manager
City l ·Iall O 3300 Ne wpo rt 13ou 1eva r<l, Ne wport B e ach , Californi a 9 2663
Firsl A rnerican Title Insurance Conzpany
Mr. R. 'I'. Forbes, President
}:Sta.con Ba.y cannuni ty .Association
Newrx)rt Be.:i.ch, California 92662
Dear Mr. Forbes
I h ave revie\ved ?,ssembly Bill 1422 which am2nds tht~ previo1.:is Bi ll
providing for the rerrova 1 of the public t rust over cert.c:Lin tide and
submerged lai'tds in the Beacon B<-1.Y area o:f tJE:..,Jf,Ort Beach.
'Ihe parcel de~;criptions of the tideland pc;rccJ.,5 a n d t-J-12 objective
are 1.mchan9ed .
T :icrt.e tl~iA t . tl-;.e :_9·7-; 13:i.ll cic><::~-~ ~-1 1..Jt. i .. :121 :.],2_ .. ~-;-•.=tr~·-\::}._:_::., F ; -~---~--~.: C,
,,.,t1j_ c fi , I i;cli 0\'C ; h :12;1:-e 1xJ t essr::n ti.al c1s 1c: :~ t __ ·-~~-vc.\ ... ~ nc) LL:,--.:.£ ;_1 l r -1
•• .::.·1:.c:sc:
in the 1975 Bill.
More detailed provisions and conditions z.;;_:,i;,e ,:u: i n this 1977 5ill
thnn in the ca.1l_JE'11ter Bill which may rnt1kc thi~: ve1:-s ion more acce pt-
able to those who have so far successfully blocked its pc.1s s a.g e ;
for some w-1kno.~'n reason. Il o.v"eVGr , I cou1d find no fault with the .
previe;us Bill.
Parcels B, C and D are ncM Parcels A, P. an d C in AB 1422.
'Ihe Lt~is lative Counsel's Digest is not entirely correct in Sect:ion
l (b) . Parcels A , B and C were never part o f a h arb:>r facility. 'Ihe
Beacon Ba~; Harror was east of the 1977 Parcel A. Hc;:,vever, this is
mi.nor and is not likely to have any effect on the passage of the Bill.
I have no other corrments re;:Jarding AB 1422. I feel that SB 367 a.nd
AB 1422 are oot11 adequate a,.7.d would accon-:p l ish the same desired pur-
pose ; \-:hid1 is simp ly, to reirove b.7 e p ubEc trust over fill e d tide-
l a n ds being leasi:::...a. for reside ntial use z..1.nd to mak e t11.i.s use l egal.
Truly yours
£? -'7 W o M~pr1~
Don0ld B. Davidson
&-:>.::.:or Civil Engii'leer
'I':idel c:md s and Wat en-2 y s
DGD :bn
"" .... -J i"
'
,,
TO: CITY MANAGER
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
December 3, 1976
FROM: Administrative Assistant to the City Manager
SUBJECT: BEACON BAY LEASE
In response to your request that I research the Beacon Bay files to determine
if and when a subdivision map was recorded, it appears that Mr. Beek never
filed a subdivision map. However, Mr. Beek did file a record of survey on
February 28, 1939 in Book 9, Pages 42 and 43 in Orange County.
Also, at your request, the following is a historical summary of the City's
Beacon Bay lease:
Background : The Beacon Bay area was annexed t o the City of Ne wport Beach in 1917
and the tidelands therein was granted to the City in 1919. The granting of the
tidelands to the City was reaffirmed by a court action in 1926 .
The Beacon Bay area consists of approximately 10.9 acres which was acquired from
the Irvine Company in March, 1929 . The remaining acreage was either tideland
trusts, or City property. On October 10, 1927, the City received a proposal
from J. A. Beek to lease the above property for an automobile camp. On November 9,
1927, the City agreed to lease Beacon Bay property to Mr . Beek .
Agreements with Mr. Beek :
November 9, 1927 -The City leased the Beacon Bay property to J. A. Beek.
A. Acreage: Tentative acreage figuration -12 acres.
B. Terms: 25 years ending on November 8, 1952.
C. Rent:
1. $10.00 per acre per year, increasing by $10.00 every 5
years until highest rent is reached in 1952 at $50.00
per acre.
2. The City receives 2 percent rental on all gross receipts
for the first 10 years of the lease,and for the last 15
years of the lease, this will increase to 5 percent.
D. Improvements to the Property:
1. Dredge channel connecting the lease premises with navigable
waters of Newport Harbor .
2. Fill and level the property.
City Manager
Subj: Beacon Bay Lease
Page 2 -12/3/76
3. Construct boat landing and docks upon premises.
4. Install streets, water pipes and necessary public
utilities.
E. Purpose of Lease:
1. For commerce and navigation.
March 3, 1930 -Amendment to 1927 lease. Purpose of lease is now not
only for commerce and navigation, but also for all
other wharf purposes.
July 18, 1938 -Amendment to 1927 lease:
A. Acreage: Incorporated to 19 acres.
B. Tidelands: In the judgement of the City Council, use of westerly
portion of said tidelands and uplands for industrial
use will be inimical to the best interests of said
City.
C. Terms: The 1927 lease was amended to have the 24-year starting
period begin on July 18, 1938 and end on November 8, 1962.
D. Purpose of Lease: Westerly portion (approximately 11 acres) to
be used for parks, recreation, residential or educational
purposes which are not inconsistent with any trusts
imposed upon tidelands.
E. Rent:
1. Westerly portion -
q. $30.00 per acre per year until 1942;
b. 1942 to 1947 -$40.00 per year per acre;
c. 1947 until end, $50.00 per acre;
d. The City is to receive 2 percent of rentals on gross
receipts until 1947, and at that time will increase
to 5% until the end of the lease.
2. Easterly portion -
a. Up to November 1952 rent will be the same as is provided
in the 1927 lease. From 1952 until end of lease, the
City wi 11 receive $50. 00 per acre per year;
b. Percentage of rental will be the same as is in the 1927
lease until 1952 when the percentage of rent paid to
the City will increase to 7.5%, until the end of the
lease agreement.
City Manager
Subj: Beacon Bay Lease
Page 3 -12/3/76
February 6, 1939 -Agreement and amendment of lease of July 18, 1938.
A. To provide that if Mr. Beek should default in making payment
under said lease agreement of July 18, 1938, that this will
not affect the sublessees.
B. ~1endment also allows Sublessees to pay their pro-rated share
of acreage and percentage rental directly to the City.
October 30, 1939 -Agreement to amend lease.
A. Purpose: To increase City's revenue by erecting more houses.
B. Extend the lease agreement of July 18, 1938 to end on November 9,
1971:
1. Extension only applies for residential lots which
were constructed prior to November 9, 1941 under
loans insured by FHA.
C. After November 8, 1962:
1. All rentals and payments by sublessor which qualifies
under terms hereof, shall be paid directly to the City.
2. Mr. Beek waives all claims to said rentals due from
sub lessees.
3. Mr. Beek is released from and after November 8, 1962
from obligations to acreage and percentage rentals.
May 1, 1941 -Lease and amendments to July 18, 1938 lease agreement .. •
A. Purpose: To improve land between yacht basin and land described
in amendments of July 18, 1938 lease agreement. Lease
contains similar recitals as found in lease of July 18,
1938 as to purpose and use.
B. Amends lease of November 9; 1927 as follows:
· 1. Term: For 21 years, 6 months, 7 days ending November 8,
1962, upon same terms and conditions as 1927 lease.
2. A 100 ft. strip is leased to Mr. Beek for parks, recrea-
tion, residential and educational purposes not inconsistent
with any trusts imposed upon any tidelands.
3. Rent for 100 ft. strip:
a. Acreage rental -up to November 1942, $40.00 per acre
per year.
City Manager
Subj: Beacon Bay Lease
Page 4 -12/3/76
b. From November 1942 to November 1947, $40.00 per
acre per year;
c. November 1947 until end of term, $50.00 per acre
per year.
C. Percentage rental of gross rent:
1. Until November 1947, 2 percent of sums received;
2. 1947 until end of term, 5 percent of sums received.
December 3, 1945 -Lease and amendments of former lease.
A. Westerly portion:
1. Acreage Rental:
a. To and including November 1947, $40.00 per acre per
year.
b. From November 9, 1947, to end of lease, $50.00 per
acre per year.
2. Percentage rental of gross rent:
a. Until November 8, 1947, ~ percent of all sums received,
b. Remainder of term, 5 percent of all sums recieved.
B. Rental for Easterly Portion:
1. Acreage rental:
a. Up to November 8, 1952, same as provided for in lease of
1927;
b. For remainder of term, $50.00 per acre, per year.
2. Percentage of rental of gross reciepts:
a. Up to November 1952 same as provided in lease of 1927;
b. For remainder of term from November 8, 1952 to November 8,
1962, 7.5 percent of all sums received from use of easterly
portion.
January 9, 1950 -New lease.
A. Acreage -19 acres.
B. Number of Lots -65
C. Terms -38 years (January 1, 1950 until December 31, 1987).
City Manager
Subj: Beacon Bay Lease
Page 5 -12/3/76
D. Rental
1. Westerly Portion -To be used for rental purposes with an
annual rental of $600.00 a month, plus 5 percent of gross
receipts for the first 13 years.
2. Easterly Portion -To be used for industrial use, construc-
tion and maintenance of wharfs, docks and pier, with an
annual rental of $350.00 a month, plus 7½ percent of gross
receipts for the first 13 years.
3. In addition to the above rents, lessee was to pay $1,000.00
annually for the first ·13 years for the last 25 years of the
term beginning in 1963; the City is entitled to 33-1/3
percent of all gross receipts annually.
Conclusion:
The Beacon Bay area currently consists of 12 acres of the westerly portion and
is improved with single-family residences and apartments. There are 72 sub-
lessees in this area for residential purposes. The easterly 7 acre portion of
the lease premises, known as Balboa Yacht Basin, is improved with the following:
1. Marina containing 166 slips;
2. 56 storage garages;
3. 7 apartments;
4. Marine hardware store and shipyard;
5. Restaurant; and
6. Yacht brokerage office.
The entire Balboa Yacht Basin operation is under one lease to the Irvine Company,
California Recreation Company. All of the subleases expire on the same date as
the master lease, December 31, 1987.
Revenue received from the Beacon Bay area
Beacon Bay Leasehold Rentals
Beacon Bay Transfer Fund
Balboa Yacht Basin
TOTAL
in 1975 is as follows:
$ 23,979.50
5,651.38
13,285.08
$ 42,915.96
The City receives 1/3 of this total, which amounted to $14,305.32.
I have attached an interesting letter from an attorney who responded to an inquiry
by Mr. Beek on the legality of subdividing over the City's tidelands.
/Jos/~
ROBERT J. L0NG
RJL: i b
Attr1rhmPnt
Mr. JoseJh A . Beek
Balboa, vi a Ne~port Beach
C.,:;.liforn i.;;
Sc.tcr;:,;.;,,,~n to, C '.'. lif ornL-,.
,hnu,:;_ry 9, 191,0
You h ;.:L ve r2 c:u.s~;ted my O.;.)iLion, :..s ,:n ~!t tor.uey speci c_j_:L-
z ing in constitutional rr,:::d ;te :ts, :,s to ·.,,h ,~ther s.n y c;c)ns titi..ltioi.,21
restrictions con c eri:1ir;6 thG pro1_,er-ty ltS::--sed .Cron; the City of
Ne wpo rt Eea ch by yo~ ~nd v~ich ya u now proJose to subd ivide, ~ould
interfere with, or in any v.ay r es trict, yolir r,ro1·0:..,ed use of the
property as a subdivision .
Th e constitutional re s triction s contained in Article XV,
Con sU.tution of C~l ifor nL-", con ce r ni n g ti deL-:i 1d.s , rela.te tc, n .0.vi ga -
tion a nd £isheries .
Th e p r,rtic;l;L:r q;_~estio.n i nvo lved ap,:.e.::J.r~: to me to h ·,,ve
been defir1itely and com~letelj ans~ered ifi th e c as e of Peo~le vs.
C2.liforn i 2. Fi sh Co mp::;.n y (1 9 13 J, 166 Cal. 576, 1.3 8 P 2.c . 79. The
concl~si on s s t ::1 ted i :1 . th:i. s Cc.:.se cov ~1 rin s the 1:irinc _i p·ci l r:o:i _n t
involv ed , ap1Je ,1 r on f.•"~ge 596 e.ncl p'-lge 597 _C;nd ,?.re a.s follon~;:
"O ur concL..i.sions s.s to the l ~;.w on this bri.wch of the ca.se
ma y be surr1:n::o.ri zeci E..s follo ws :
1. The ti de lands ~re, gnd from the beginning of o~r
government h a v e been, cie cU.c 2_ted to )w blic use for i:·;urpo-
se.s of n a vig a ti on &n d fi s hery.
2. The title to the se 12.nds is , by tlw ;;e oµle, vested
in the state in trLl.st for said pub l ic uses. The ~dmini-
stration :!.!lei execution o f this tr1-,;s t is cor:imitted by the
cons ti tu tion to th e l2 5 i sl::=. ti V•:! de f l :, rta1en t, su.bj e ct to
cert3.in expressed reservation s ·::nu r es t r icticns.
3. The powers of the st~te a s tr~stee 3 re not eip res scd .
Th e y a re comm ensurate with the duti es of the trtts t. Every
tru s tee has the implied power to do e verythin g necessary
to the execution :~nd 2d;n:inist r:=~tion of the trll st .
4. As the state h as the pov,er·s nec e~;scJ..ry to the exe-
c u tion and c::.dminlstr~at i on of the tru s t, j _t fol lov,s th;:,.t 1t
rn ~1y di spo3e of the se l s.nds iri the 2.J:u inj_ s tr a tion or the
t Y,'. c-t • 1· 1···1 '='UCb r·n~ r1 n° ·~ ;·.' c-thE• i· ·r, tor a c· t,:, 0 .p r1 r, Vl0
.,.. •·· t .•l o ·r-rn•_, y -. L,4,. ..J .. ..J . ,. .. v l ....... .-::> 1 .., • -'--' .J .. J J.. _.. b c..l _ ..:.1 .. au.
re --ru.ire. One of the duti es of the trust ··:es . to · a dapt the
Lrnd to the use for _r~,~Ytt?1:..t;ig_r~ in the b es t rrE:nner. If,
in so ;~~dD ptin g th e tide 1 2.n us for t'cti s u se , it i s found
n ecessa.ry or a.c.ivi;_;::;.'o le, ir1 c:dd of the i..:..se, to cut off f.or.:_
tions of it f rom access to n,::.vit::;a bl e •,c;ater , so that th ey
11 b2ccn12 w1 .::,v::1ilab le for rwvi,:ss.tiou, the '...it c.J.V: hu.s pov;e r
to exclude such )Ortions from the public ~s~ und, to
that extent, revoke the original dedication.
5 .. \'✓hen this hs.s b een done ic1 tn-2 re1:;t .. L,r ad.ministra.-
tion of the .trust, the l:=:nd thus excl'_;,ded frou1 ,_;_se for
n ,:1vi 6 atior1 ID 'LY beccme propriet~iry lc~nd, not :-:..;ubject to
the 1.,ublic: use , a.nu ·it way then _be alien ;:..:. tec.i irrevocEt bly
by the stste for private use to priv~te in dividuals .
6. When the state, in the exercise of its discretion
& s t:rus tee, has decided. th at .i!or tion.s of the tide 1{:1.nd
sh::Ju ld be · thus exclu.ded fro:r1 na viga t:Lon and sold to
private use, its determin.01 tio.n is concL1si ve upon the
co iJ.r t s ; but st-:1tutes pur_porti:-Lg to ~1.uthorize an ab&nd.cri-
ment of such )liblic use will be c a refully sc3nned to
ascertain ~hether or not s uch was the l egisl ~tive inten-
tion, a nd that int ent must be clearly expressed or neces-
s,:.rily implie d. It v'iill not be h1plied if any other
inference is re::1.sonably possible. And if c=,ny inter pre-
ta t i ~n of the statute is reasoh a bly possible which would
not involve a des trG.ct:LC>n of the public use or an intention
to ter,nir1:-1.te it L-1 viol:.cltion of the trust, th e· courts v:ill
giv'2 the sts.tute such i :·1terpret ation.11
In this .iJ.!.:1.rticul 0:.r case the tide h:no.s in questi:::.,n l L;ve
been filled under 1:iroiJerty authority, the l and filled being back of
the bulkhead line est~blished by the United St2tes. With r eference
tD the effect of the bun(he .0ld lj_r:e, the Californi£. Supreme Col·Lr t,
in People vs. California Fish Co., Supra, at p~ge 599, stated as
follov,s:
"Vi i th re gard to t'ne h::-,.rbor lines fixed by the United
States, it is clear th;:tt 'this i s the equivalent of a
license to the state to fill in the l and between them
and the shore, either before or after the erection of a
wa ll on the es t::1.blished line. 11
The fact tha t the p~rticQlar land has been filled and is
no longer available for the use of n a vig 2ttion :i.nci fisheries, ap~ears
definitely to h a ve been established by a number of legislative acts,
incl u.ding Chap. 200, St2 .. tut2s of 1931. This .3.ct C~')nta.ins, in the
second section, after describing the or d in~ry high tide line , the
following st~tement:
11 All l a nds lyi ng betr;een s e,id orctin.:=:;,ry hiih tide 1L1e
her e tofore described, a nd the u~l ~nds h eretofore
described, constitute n a t~ral accretion to s a id uplands
ur1d b,3long to and s.re .:.t p;.:::.rt of se .. id u;,L.rnds. P
~ith reference to the right of th e ~t a te to tuke the 2ction
indic ated by the sta tut e ci t eci .:,bove, the C2.J.if'orni:::.. E.,Llp re:rr e Court,
L-1 Peo_;_Jle vs. C.J.li.f'orni :::" Fi s h Co., Su.::r a, on _i.)',.i:;C 585, st:.:t 2 s the
f 0Llo,·,i:1g princip,-i.l:
urt is ftlso .::;et t led th :'-;_t in the &;..;;rd.n is "C r2.ti•::.:n of this
trust when the pl ~n or syst e m of i~prove~ent or develop-
ment ;_::.dopt e d by the st:i t,e for the ;Jromoti ,:yn o f n 3.vi 6 ;-~tion
and coc1u1erce cut3 o f 'f A. v 1.rt of the :-;e tiue .L:01nds or sub-
merged l ~nds fro~ the public ch ~nnels , so th ~t they ~re
no longer useful for n ~o. vif;c-, ti-::m, th e s t 0 .. ce rn e.y thereupon
sell and dispo s e of such excl u ded lsn d s into private
o wnership or private uses, thereby de s troying the public
e,~:::e ,ilsnt in sucr1 ::'orti ,:-;u of the l ,~~nds :.;nd giving them
over to the grantee, free from public cof1 trol ::1.nd use. 11
In the pre32flt c 2..se ; of co0rse, th e stci t e has not :~uthorized
the sale of the lruid s , but c e rtainly ther e i s no l~i..;,es ti·:m of the
right of the stGte even to sell such l ~nds as ~sy b e back of Federal
bulkhe,=td lines which hs.ve bee(i filled 2nd so 2.re no longer physically _
available for the purpose s of navig a tion or fisherie s .
'l'he case q u oted a bo v e cites nume r ous cas e s :=~s .::.nJ.thori ty
for this principle.
From a consideration of the :1bove, it seei c:.;; to !l!P. th,~t no
question can exist a s to the proper u s e of the land ·leased by you
from the City of Ne w ~□rt Beach for re-leas e for r es itiential purp~ses.
Vary truly yours,
(
HISTORY OF BEACON BAY
When we drive through the ornamental gates into our charming
little co mm.unity of Beacon Bay 1,,1i th its lovely homes, it is difficult to
realize that only a fe 1.-1 years ago it 1.-1as a stri~J of bare, s1 ,1ampy land.
_ In 1927, the City of Ne-w~Jort Beach i•Jas contem~Jla ting leasing
these tidelands granted to it by the State of California for commercial
and fishing purposes. Mr. Beek, one of the early developers of Balboa
Island, was in the process of dredging and filling Harbor Island for
development as a high class residential area. In order to urotect this
valuable ~Jroperty, he negotiated a lease 1;1i th the city covering all of
the city-owned property facing the bay adjacent to Harbor Island. More
dredging and filling was done on the land acquired by this lease to build
the Balboa Yacht Basin on the easterly norti~n and fill the low land
adjoining the yacht basin on the west. -
In 1931, the State Legislature passed a new law pertaining to
city-owned tidelands which permitted the city to lease such l ands for
park, recreational, residential or educational purposes . This opened the
way for the development of a planned and restricted residential comnunity
which had long been Mr. Beek 1 s dream. At his request, his lease from the
city was amended to allow the use of the westerly portion for park , recre--
ational and residential purposes and he began to plan the lay-out for a:1
ideal beach community.
In 1939, plans were com ~leted , trees and shrubs were planted
along Bayside Drive to assure privacy, sidewalks and alleys were paved,
utilities installed and a comounity pier at the foot of Cape Cove wa s
built. With Earl Stanley as Sales Manager, the first unit of Beaco n Ba y
Marine Hornesites, com9rising 22 waterfront and 39 inside lots, was offerea
for lease, the only subdivision of its kind in the State of California.
The first lease in Beacon Bay was made on the triangular lot
north of the west etitrance to Jascha Heifetz who had just cornnleted a
be a utiful home on the west end of Harbor Island (now the Ah~a~son
residence.) Hr. Heifetz constructed one of th e finest tennis courts j_n
Southern California on this lot .
The first house was built on Lot 48 in the summer of 1939 and by
t h e end of the year nine houses dotted the expanse of white sand ~nown as
:i3eacon Bay, all small but attractive sum ;:ier houes, and another pair had
been added at the foot of Shelter Cove. The first year-round residence
was built by Mrs. Boylan on Lot 52 (now the Edward A. Thomas home,) to be
follmrnd soon by the Stanley Sa1.·1yers on Lot 14. The picturesque street
li ghts, replicas of the Sandy Hook Lighthouse, i:-,ere installed.
History of Beacon Bay, continued
Among the II early settlers 11 of Beacon Bay i:·Jho still own
homes in our community as original lessees are Mrs. Lilyan Earel,
lfo. 10; the Stanley Sai;,1yers, No. 14; the A. Hale Dinsrnoors, No. 37;
Sue Hitchman, No. 43; Henry Tilden, No. 55; Marion Smith and Florence
Kalde, No. 56; the R. A. Schaubs, No. 60; and the Earl Stanleys, No.9.
By December, 1941, Beacon Bay ~as a fast growing community.
Then came Pearl Harbor and curtailment of all non-essential building.
As the war went on, some of our lessees holding vacant lots either
sold or quit-claimed them to Mr. Beek. Many of our residents could
not drive to their beach homes so either closed them or rented them
to army officers. The year 1944 sa"t·J rene1·1ed activity ,-,i th all of the
lots in the first unit leased or re-leased and building again resuming.
During this year the East and West Additions to Beacon Bay were opened,
adding thirteen more lots to our group.
Since 1946,the close of the war, our Beacon Bay Community
h a s grown steadily. Older, small houses have been remodeled, enlarged
and made more attractive. Larger and more expensive year round homes
have been built. Each year, more owners are deserting the city and
are making Beacon Bay their 9ermanent home ..
In 1948, with the expiration of the Heifetz lease, the
Beacon Bay Comnunity Association acquired the lease on the tennis
court 1i1hich all residents may no 1:-1 enjoy. Hr. Beel,;: also gave the
Association the use of th e triangular lot adjoining the court to
the north for community playground and recre e tional facilities.
In 1950, Mr. Beek negotiated a new lease with the city, and
in turn, extended all Beacon Bay leases to 1987, thus increasing the
value of our leaseholds.
Through our Com □unity Association, in ~hich each lessee
has a voting membershi), many projects of beautification and community
betterment have been successfully undertalrnn. ':le have all 1-10rlted
together to tr a nsform the little group of sum mer cottages (which onli
a few of us remember) into one of the most desirable and beautiful
residential comuuni ties in Ne':~)ort Harbor.
:Mildred. Stanley
In -t h e ?-1--'J.t,t er of t h e Ti't;le
of Beac on Bay
)
)
)
----~---------)
An At t orney I s Opini0,.7
Evalu.a ·tion of the status of ·title of Bea con Bay rcqui:res a rev:i.e-~-1
of its past. hist,ory., Initially, it ,;,as included i."'1 t he Field No-te s
cf the survey of To:ms..1-rip 6 South, Range 10 1,fest 9 SBB?iM .. :; made by
Colonel S .. Ha Finley in t:he Spring of 1889, while acting U...'1de r a con-
tract as United S ·tates Dep1rty Su...""'Veyoro The ConlJT!issioner o.f the
General Land Office rejected tr>...e original map of said ·i;ownship ar.d
range 3 based upon Colonel Finley's Field Notes, as submitted by the
office oi' the Sfu-veyor General of California, in San Francisco, Cali-
forniao The ground for reject;11g such meander lines encompassi..'1g what
is nart1 Beacon Bay was that there could be no third class of land between
the u:pland of P..a:Jch o San Joaquin arrl the tidelands and subrr.erged lands
of !IBwpo..."'"t Bay.. The Su ... -reyor Ge n eral mista ken\Y' took Colonel Finle y 's
Field Notes to mean t:b...at such lands were character ized and classifi ed
as &,.,-amp and Overflm..ed Lands witl1in the context of public lands u.nd.GT
t ,he Arkansas Swar:ip and Overflot...'Bd lands Act of Septemb-ar 28, 18,50 5 a
federal acto C'napo 84, 9 sta;t,, at L • .519, 43 DSC 981 et seq., S ince such
land had, under that act, to be above the mean high tide li..'tle, the Sur-
veyor General, according to the Commissioner of ·t;he General Land Oi'fi ce.,
should have incorporated ·!:;hem in the Rancho San Joaquin boundariest> p::re-
vious:cy granted and :i;:aterrted to Jose A.."'1clres Sepulveda, and. his successors
in irrterest by the United Stat e s Government, assuming them to li.ave been
either accreted tidelands under t he federal rule as of tra date of tra
survey, or originally part oi' tbe rancho. This was an error co111u1ltted
Pa ge Two -Beacon Bay
by the comissioner, as noted in People v C2lifornia Fish Company 1 166
Calo 576, inasmuch as the cou...rt noted in t~.E.t case the Surleyor Ge ne:cal
was not ·to raise questions as ·l;o the cha:racter of the la"ld, bu.t n:e rely
to reflect the findings of the m1rveyor as wher-a meander lines are lo-
cated., corners and other bcund.ar-.r l:ines fixing the tmmship a..Yld range
lines, section lines, and qua .. :·ter section lines with.in TownsJ:1ip 6 South_,,
Range 10 i-~st., SBP&M. See 43 USC 75L. The character of such la..'1ill3 can
only be determined legally by a cou.:rt -adjudicationo Kernan v Gr..i.:fJ:ith., 34
Cale 580., If in fact tidelands, such lands remaL"'l subject to a public
servit1 ,d<=> for commerce, navigation and fisheryo Ii upland_, ·they would
have belonged to the L....,,-j_ne Company., as successor in :interest ·to Jose
lmdres Sepulveda. Subsequently, the lands were found to be tidelands and
subject to the public ser•vltude for navigation, notwithstanding the acticc:1
taken by the CoiJ,r:lssio."1er of' the General Land Ofi'ice and the Su.i.----veyOl'
Generai of Cali.f'ornia ii., 1889 and 1890s
Balboa Islar:d was annexed to Newport Beach by a O::lrti.ficate of A.11nexa-
tion on Jlll'le 27, 1916,. Newpart Beach ~ ... -as focorporated September l,j 1906.,
In describing the land annexed the eng:i-r:eer ili9.de an error in that the
annexation called for was to follow the center line or th..--ead of the en.an-
nal north of Balboa Island, but he projected the line to tre blu.f.fs across
the channel 'Within Block 192 of the Irvine Ranch, and there.by included
the tidelands between tre old Villa Marina Restaurant location and the
Balboa Isla...-nd Bridge to and including present day Beacon Bay o This error
brought :into tbe city of Newport Beach tidelands then owned by tli.a state
of California and portions of the I:rvire Rmch. On December 24, 1917,
Page Th.i.-ee -Beacon Bay
this area was ciisinco:rporated by an el.Bcticn in Newpo::.-t Beach;; placi'tlg
i·t back in the status of county JGer.l.'lto:cy" In 19193 mder Stat ., 1919,
Chap .. 494, page lOll, the state of California gra.-..:rted. :in trust a ll tide-
lands then withiii the city limits of };ewport Beach abutting lands other-
wise owned lTJ Newport Beach, whether such tidelands were filled or Ur!-
filJ..edo The same yMr, under Stat. 1919, Chap., .526., paf,e 1138, the
state granted in trust all tr....e tidelai1ds, whether filled or U!llil1ed in
the County of Orange other-wise outsia.e the City of Newport Beach and
adjoLlling Newport Bay to the County of Orange., By the stat. of 1929.,
Chap,, 142., page 274, tra state con.firmed the earlier grant to tb9 city
of Ne-,-rport Beach. L, addition, the Stat~ of 1929., Chap. 813., ~ge 17C4,
granted all tidelands ~_;_.,g within tre col'porate city lL""lits not pre-
viously granted to the ··ccunty of O:m:nga ';.,.,y the 1919 grant., not heretorors
granted to the city, includi.t'1g filled or unfilled lands, to the City c£
Newport Beach. To 1929 ~ a1 so by stat. of 1929, Chap .. 5 .15, page 974, ·the
County of Orapge was g!'anted tbe tidelands not previously granted -to it
outside ·!;he then city limits arrl. otherwise in t:b..e boundaries of tba County
of ora.,ge, and not previous\y granted ·i;o any other municipalityo In 1927
the City of Laguna Beach had received a grant o.f tidelands adjacent to its
shoreline from the State of California.
In an effort to aba·l:;e the mosquitos in the sw-amp that "i-TaS then Beacon
Bay a comittee was formed by the Balboa Island Improvement Association.
Believing the city would be more interested in abating the mosquito nuisance
than the county, the Balboa Island group prevailed upon the city to submit
a bill, AB 165, whic.ri was enacted by the legislature into 1;\w as Stat. o£
Pa ge Four -Beacon B~y
1927, Cl1ap., 70, page 125, supposedly gr2.!'lting the ·l;ide la:.ids t hat J:i..2.d
been disL1corporated or de-armexed in ·L~e 1917 proceed:L~gs, nabed above,
evEn thougn said tidelands were not "[Brt of ·t,re city at the tic:e " It
was the intBnt of this legislation that said ·tidela.J1ds should con:e -:;.rithL."1
the control of the city, as trustee of t r,e public servitude for the state
under its 1919 grant, even though they we:re still parl of county territory
at the timeo A :reading af the statute r.o·tes: There is heraby granted to
the city of Newport Beach, a municipal corporation of the State of Cali-
fornia., and to its Sltccessors., all of the rightj title and interest of
the state of Cal:i..f ornia held by said state by vi...-tue of its so-vereignty,
in and to all of the tidelands artl subrr.erged lands bordering upao, in,
and ·under Ne'11-pri Bay, situated belcw tbs li,;.-,e of n:ean high tide of i:.he
Pacific Ocean not h '"'" .Ld.L ·,.:i • .,_ _eretC!.ore grant.e ~ :..,O sa1. .... c1.tiy or to the county __ of
Orange, to be forever held by the city of :!\Tewpcrt Beach and its 311.ccassors
in t:·u.st far the uses a.."'.ld purposes arrl upon the express cond.itic...--is (then
noted.),. Ho'!i>"BVel:', there was a fu."1damental difference noted bet,;.,"Ben the ... G·,ro
1919 granting s ·t;atutes to ·bhe city and cou.1"3-ty, respectively., T'.c..e grant
to the city in Chapter 494., page lOll., is to those tidelands which border
upon and are in f:ront of the upland new owned by said city and su.ch oilier
upland as it may hereafter acquire.
grant to the county of its tideiands.
There is no. such li.TJJitaticn upon the
The county was granted all tidelands -
bordering upon Newport Bay not otherwise incorporated in t.'l).e city limits
of Newport Beach., not merely those tidelands then abutting lands adjacent
to Nevipart Bay o-w:ned by the county -as was the case of the Newparl grant o
Thus., in 1919 the land where Beacon Bay was later located was tidelands
Page Six -Beacon B.::i.y
outside the city liti-t,s of Newpar ·t Beach, and thereby, ur.de r the g:.r-a:.--rt
of the S-l;ate of Cal-ifornia to the Ccunty oi' Orange , title in fee si!n ple
absolute in trust passing from the state to the C'.J1.mty of Ora..YJge in that
land\' The lateT 19 27 grant excluded expressly any tidel2.11 ds prein.ously
granted either 1;o the City of Newport Beach or the County, so would 1'2.v-e
excluded said :Jeacon Bay tidelands,, Thus, the city did not reeeive the
title to these tidelands by the 1927 statiJ.-tory grant, and thereby could
not under that grant :have any pcwer tg lease such tidelands within the
statutory limits ot..>ierw:i.se set by the state for tidelands leaseholds to
nrunicipalities 9
On November 9, 1927, the City of Ne-r,1po....-t Beach leased Eeacan Bay and
the adjacent rna:r..:..na to Joseph Alan Eeek for commerce and navigation., in
consideration for <L--edg~~g and r~,~~,g, :i.nst~llation of fac~J i t ies on said
property. It was agreed that this proi:erty, -vhlch the city considered to
be its property in t:--iJSt, would not be annexed until the iraproVement pro-
gra.'ll ,;.-as completed.~
The Balboa Yacht Basin was d...-edged in 1929, as well as the channel cor..-
necting it tri.th t.be waters of Newport Harbor. Joseph Baek, as master lessee
of P.eaccn Bay., proposed to tre city council that ·!;re lease be aroonded to
provide that the land be leased for commerce and navigation and ot..1.er law-
.ful. purpooes. It ·waa still considered that to use the property i'or resi-
dential purpcs es would be inconsistent with tre terms of the grant frCDl
the state. There was no question that the yacht basin could be classified
under commerce and navigatia:1.,
Page Seven -IBacon Bay
A b"l 11 was pre pared and io'trcduced t,h.at provided that in ca ses ,-rl'.ere
the governing bcdy c.f any city felt that the devalopment of its ·1:;ide-
lands for corrmercial interests would be inimical to the best i..'1te"!"es ts
of ·!;l>..e city, the city could lease such -tidelands f er 11 park3 recreatior.al,
residential:, or educational purposes. tr Tb.a .:iilJ was enacted in the
Statutes o.f 1931, Chapter 999, pg.ge 2003, ar:d became G-ivil Code Section
718(e). S1.1.bsequentJ.y, it was :re-assigned as Govern.il8nt Code Section
37387 in 1949 ..
T'ne initial 2.5-year lease was to expL.-e on November 8:, 195 2. Tha
city of ? 1'!e-,.iport Beach gave a."l extension of ten years, -'.,;o expire on
November 8, 1962. In 1939 Beacon Bay w-as recorded in Book 9, Page 42
of Record cf Surveys., Official P..eco~ of tts Cau..7ty of Ora.."1g8.9 State
of California. Tbs !7Ester lessee subsequently sub-let all the residen-
tial parcels. The Beacon Bay Community .Association was forr.~d and pro-
vision w.ade tli...at all lessees should be members of the asscci.aticn, which
ass-cmed responsfoi1;ty for tbe maintenance and operation of' ~'-le assc-cia-
tionis utilities and other proi::ertyo
The sub-leases prov'idea tr,..at prior to their termination the lessor
would endeavor to secure .from NEMpcrt Beach a ccntinuaticn cl' the ~ star
lease am wculd give to each sub-lessee ths :tight to cont:ume :i.n possessicn
of his property. • The association asked the naster lessee in 1949 t o seek
an extension o:t:-;'the lease without ·waiting out t:b..e expiration period ar
November 8, 1962. The city on January 9, 1950 extended the master lease
to expire on December 31, 1987. The sub-leases were s:L'tJlilarly extended
for the period of the lease.
Pa ge Eight~ ~~aeon Bay
In 1953 the Ci:ty of Newport Beach adopted a n9;,r city charter., Section
Jl~02 of the new cli..arter pertains to water .front properties belon ging to
the city o Section 1402 prov:Ldes thc'.t -no such property ~med by ·Ghe
city sr..all be leased by tha city unless and until the leasing thereof
sh3.ll have been apprmed by a majori"l:;y of electors votL11g on such pro-
7osition at arry general or s:f€)cial election, pl"avid.ed however, that this
section shall not invalid.ate any lease of such property in existence at
the time of the, effectiva date of tr:e charuer nor the futlli.~ leasing or
releasing of arry such property under lease at the effective date o:f tl::a
charter.,
Senate Bill 367, of the 1976 sessJ.cn of the Cali:fornia Legislature
has been :p'.:"opooed. Th;s bill would contain a finding that the described
portions cl' such tid.el ~~ds and :"<n~erged lands which have been i'i 11 cd or
reclaimed and are net a,...-a:ilable or usaful for trust pu.."T"Posas, pUJ.-usar.rt to
the Ststutes af 1927, Chap. 70, Page 125, arrl are thereby declared t,:i b3
free from tbe pu.bl~ c use and trust for navigation, coirrcerce and fisheries ..
In ac,Jordance -w'ith Slrraly v Bo...;lby, 38 1,. E-d. 331., 152 US 1, 14 Sp~ Ct,,
548, People Va Cal:ifo:rr..ia Fish Co • ., 166 Cal 576!> and Atwood v Haomcnd, 4
Cal. 2d. 31, the legislature is e mpOW"ered to make such a finding ... The
lands to be freed af tbe servitude are in acco:rdance with SB 367., -to be
purchased by the City of Newport Beach in fee si."'llple absolute. This aci.
the city is legally qu.alii'ied to do. However, as a political subd.iv.ision
of tre state it takes said lands in the same manner to much the state
would hold them if it continued in title a.i.~er the declaration t11.at they
are free of the public servitude and no longer needed for comrr.erce, navi-
Page Nine -Beacon E2.y
gation, and fisheries ;, Th.at is., since they were lands within the aco~
and restraints 0'.L • Article Y.Jf, Section 3 of' the Cal; fo::mia Co~stitutic:n
of 1879 ('tidelands -;.:here the fee has renain€d ung:1"'3nted to private par-
ties) the lil3re :removal of the servit·ude does not pBnnit the later-d-is-
position in fee into private harrls in violation of this section and arti-
cle. Atwood v F..ammond, supra., San Pedro., etc .. RR Co v Har.Jilton., 161
Cal 610. The FJ.;rehase by the city uride:r Section 4 of this bill wouJ.d
not alleviate thesB larrls from this restricticn, and any later attempt
to dispose of such la.""Jds -in .fee would be void under the principles con-
sidered in People v Cali.fc...-nia Fish Co,., supra., and Atwocd v Har.nnood., supra,.
SectiCll 5 of the b-iJl :infers t:hat t:tere are to be larrl.s exchanged previrusly
not trust lands committed to the puh1 fo servitude under this act., Aga:L.7,
this is legislati7ely permissable restriction., assum±:ng public cr;.me:rship
of scicl lan::ls in fee s:Liple absolute in the City oi' Ner.vport Beach. -If
private lands, however, they are only bound ·t;o the trust restrictic:ns in
tr...e sense consida::-ed in Bohn v Albertsen, 107 03.l App 2d 738,, HO"never.i,
the la:11ils to be committed by the city to this exchange are lands tbat
appareutly passed to the city in fee by reason of the alleged boundary
settlement disptJ.tes of 1926-1928, and since such proceedings have been
questior..ed, as will be noted under Settlement cl' Boundary Line Disputes .,
below, res:fElcting bona fide settlements of uncertain boundaries, they may.;1
lika too Beacon Bay i:roperty, be aL-ready subject to the public servitude,
since the jurisdictional question as to their status is yet to be adjudicated.
See Stat. of 1929, Chap. 200, P3,ge 369, An Act, to Settle Boundary Lir.xe
Disputes. •. In addi·l;ion, they ITPY be tidelands bcl.onging to tbe Crunty oi'
~ge Ten -Beacon Pay
Orange., as in the case of Beacon To.y, U.'t'lder the statutory grant of l919
to t:ne County of Orai.:ge from the State af California;> as noted above o
Both the Beacon Bay and city la:r:ds to be exchan ged appear to have r,;::id
their status left :in abeyance ID1der tre Department o.f Interior 1s Letter
of M..ay, 1890., td~erein the Comissioner of t:h.e General I.and Office and
the Secretary Jf Interior :required that sBCh lands not be reflected as
swamp ar:rl o-verfiO"..red lands ( as othe:r·wise alle~ designated on the so-
called Finley map) ay reason of the fact that they appeared to be uplan:is
under such designation as swamp and overflowed lands and wou.Jd thereby
have passed vi"'.ith tr..e confirmation of the title to Rancho San Joaquin.
If such lands had been tidelands as af September 9, 1850, Perry v state
of California., 139 Cal App 2d 378, and had supposedly accreted by 1889
to the Rancho San Joaq1 i1.D the result would still possibly be ·bo have ap-
plied the federal rule respecting accretions erroneouszy to such lsnd,
rathe.r tha..7 the state rule, which was conside:red in Carpenter v City of
Sarrta Monica, 63 Cal App 2d 772. Then;, s;nce such lands ware described
by Col.. Finley i!l his Field Notes as subject to tidal over.flow., they would
not r-..ave been accretions a·t all, but still part ar the tide:13nd.s of tbe
state., which tbe history of Beacon Bay indicates is the case ..
In Messenger v Kingsbury, J.58 Cal 6JJ.., tb.e question was raised as
to whe"tilier ·hhe state ras the pO"' ... --er to transfer its tidelands into private
owne:rship except in aid of navigation, commerce or i'is:i:1eries.. The court
found that the state m:iy, if it sees fit so to do, grant in private ownership
for purposes otrer thar:i in aid of navigation such tidelands, citing Shively
Page Eleven -Be2con Eay
v Bowlby, 152 US 331., J1+ Sp Ct 548 , '.·Brd. v Ffnlfo:rd , 32 Cal,, 365,
and Oa"!r'1 "nrl v Oakland Water Fron t Coe, ll8 Cal .. 160., Pol-'itical Cede
3440 to 349Y-2 inclusive pravides for the sale af S H2.mp and o'7'8.n"1 0:-1ed,
salt marsh, and tidelands belonging to the state .. Act of April 28 ., 1-3.55,
Chapo J.51, Act., af April 21, 1858, Chap .. 235, Act af April 18., 1859,
Chapo 3J.li.., Act af May 14, 1861, Chap .. 3.56, .P .ct cf 1/fay D 3 1861, C'nap ,.
352, Act of April 27, 1863, Chap. 397, Act or Apr..J. 27 3 1863, Ch..ap. 420,
Act of }arch 28., 1868, Chap., 41.5., a:rX:LAct of1'1axch 27, 1872, Chapo 425.
The power to make such sales is exclusivezy that af the state legislatures ..
It manifested its po;.;er by the enactment of the above acts i'or the sale
of such lands. This plenary pcwer being both absolute and exclusiv-e in
the legislative arm of the state empc-,.,-ers it to w:i:thd:raw, as irell, such
tidelands from i'urther sale.. This it did by tbs enactrrent of Stat.. 1909 9
Chap. 444, page 774, withdraw-i...ng all tidelands .from sale., whe:mver _sitm-
ted, which remained ungrantad. Pol-i tical Cede 3h43, now F>i.tlil..ic Res01Lrces
Cede 7991. TI>...e Calii'ornia Supreme Cc1.L..,.,;; later drew emphasis to t his pci!lt
in People v r.a 1 if'ornia Fish Co • ., 166 Gal . 576!) b-j' noting that the Su.r-••Jcyar
General of California had no right, upon application being ma.de for ci,J.:.y
class of these lands, to deter?Tr1....ne their character in passing upcn such
application. A w:rit of mandamus would lie for him to duly su..-r-vey said
lands, ard for a intent to be issued thereunier fo accordance with the
application. The true character !ITW3t be determined in a court cl' law ;n
an appropriate adjudication of the issueo Kernan v Grii'fi th, 34 Cal. 580.
If., in . fact, tidelands., regardless of the nature of the application., they
will contiilue to be subject to the public servitude and the ru..les 0£ law
Page TwelVe -Beacon Bay
applicable thereto" The mere grant of such le.nds did :not-relieve tl::.e~
of ·!;he public servitude for tr..B V3r-J reason that the acts fo:,.-tr.:e sale
o.f swamp and overflcued., rr.arsh., and tidelan:ls :-ierB not intended bJ "tbe
legislcltm::e to deal with the subject of navigation or navigab-n;ty,, Su.ch
purpose is no where rre:ntior.ed in the statutes. Wnen tbe legislature bas
'Jnac·l;ed laws., such as the H,rl:rer Lat Acts., in aid of navigation., ani by
such acts it has declared that the legislative intent is to improve nai:r.i.-
gation by reclai.1ling some of tr...e Ja nds ~ f o:r uses other than harbor purpoaas
in support of the :remaining tide and submerged lands which are still use-
ful for navigation, the colli-ts will be boi.md by this legislative determ.:L.11a-.
tian a..";;d finding that the lands to be reclaimed, by legislative declara-
tion, are no longer need.ad for pu..."":pcses cl' cc.~erce, navigation and i'isrnries.,
..
and are thereby f:ree af the public servitu,-'!f>., Knudson v Kearney., 166 Cal
542.-: Si-:tch lands then ID3.Y be sold to p.1.·.i.vate O'T.v-:aers in fee simple absolute.,
if othenrl.se not u:ider sane constitutiana:j. iI'hlbitions. Atwood v Ha.."'imc."'.ld,
sup:ra., If st-ill subject to the public servitude the law has bean clear that
any :inp:roven:.ents made bJ a private party holding the ;ijaked title lnd t-0 be
by license of the state and in aid of navigation, if such improvements are
made, and they are neither by license or in aid of navigation., t:b..ey can at
a:rry time be abated by the state as a purp:resture withmrt the payn:ent ar
arry compensaticn to tri..e private owner., 1st alone just compensation, or the
state may utilize t...lie improvement itself' as such improvements are deemed
unlavtl'ul and title in!nediate},y passes to the state, both as to the tidel2Jld
and the improvercent thereon. Oakland v Oakland Water Front Co., ll8 Ca.lo
16o., Yokohama Specie Bank v Higashi, s,5 6 Cal App 2d 709.
Page Thi:rte2n •. Be:1co:n Bay
As ·to the constituticmal restraints bearing upoo title t o tidel.e..i.-:ds
in Calif ornia, there are two -in Article :rv, Se ctio:us 2 and 3 cf the
C2J '1fornia Constitution, enacted in 1879 ., Section 3 provide s t.hat no
tidel ands Cil: subn:erged lands tr:!3.y be gr2I1ted or sold to private p2..rties
which lie witli..in two miles of ·;he incorporated city limits of any ci·ty
in California. In San Pedro, Salt Lake arrl Los _A.ngeles RR Co v-F..anri.J:ton.,
161 Cal 610, the court held that this was limited to g...-ants of freehold
estates and did not bar leases to priyate parties :from tra state or its
designated trustees. Also, the :restraint was :not as to a gram; o£ the
freehold to municipa1-ities or other political subdivisions of the S-tate
o.f California, for they are not private parties within the rr.eaning or th:is
constituticnal i:'hlbition. Section 2 of Ar'-uicle X.V provides . ·til:i..at no m-ivate
persons can witnhold. access aver granted tidelands when n ecessary .for the
exercise of the public servitude for connrerce.1 navigation and i'isharieso
This section applied to all tidelands granted or-otherwise subject to the
public servitude.. T'nese would be acy tideland s g1·anted a:oywr,..sre prior ·ho
the adoption of tre 1870 statu:tory proh;biton en sales of ·tidelands within
two nri1~s of a city 1.Liti.ts and the subsequent adoption of Saction 3 of'
Article 'XV j Section 3 does not pertain to any tidelands beyond such t-:m
mile linrl.ts.1 as these 'h-ere a class aE' tidelands which c ould pas s into pri.,.
vate ha.11dso By Political Cede 341!3, ;n 1909., tJ:,..a state withdrew all tide-
lands from sale., whether or n<;>t within tha constitutional restraint,. Sae
now Public Resources Code 7991. This was by statutory enactment.,again"
under ·the legislature's plenary p ow er. This constitutional provision (Sac-
tion 2) ~ il$osed only on pri1rate persons, not on tre state or its
Page Fourteen -Ee2.con Bay
politic2l subdi-..risicns.. The legisla·ture., in ·tte exercise cf i t s
plenary power, is not inhibited by this s~tio.."1 of t he Co-.astituticr..,
for it relates "l:io restr:i.ctions, again.1 upon private parties_., i-rho h old
tidelar.d gr2.nts under valid gr.ents from tt1e state, thus, the legislattl!'e
retains its absolute a:cd exclu.shre plenarJ pwer ov-er tba public s -er-n:liu.de
for coll!If;erce, navigation or fisheries after ·the enactment of Article A'V;
Sections 2 and 3 o.f tre California Consti-t;uticn, except as to the i.'npOsi-
tion ar restraints upon il:is powers to -sell tb..e f:!"3ehold estates in such
t:irle and subrr.erged lands under Sectic.n 3, and as limited precis~ by
that secticn.
The California le~.....slature cruld before as well as after the adoption
o:f the 1879 constitution declare ce ... ~ain tide and submerged lams as no
lon~...r necessa=:r far comr.rerce, navigation or fisheries.. The conseqt:enca of
such a declaration °b"'J the legislature in the exerci~ of its exclusive
plena:::-,1 pew er is to free such tidelands frctl ·t.r.:e effects of the pnhl j c
se1·vlt110e., ?nis has wen suggested a.s being necessary before ·tfu.e lands
can be devoted to purposes other th2J'.3 in aid of ravigatione Bu.t -t he case
law, acknowledging the legislative authoriza·tion of such ttsea not in ~G11e
a:id. of navigaticn, as upheld this plenary po,-,1--er-Vested in t :he legislature~
Such au:thCil:'iza·bio:n rtt.ay also relate to great quantities of land, s uch a s
in the 1->ater Lal; cases, and such authorization may be rrade_,_ a s the J.se,-is-
latu:re in its discretion chooses, without the need of first releasing st:.eh
lands from tl:e public servitude. Messenger v Kingsbury, 158 Cal. 61l,
Boone v Kingsbury, 206 Cal 148, Shively v Bo-.-,lby, supra, Feopla v South.em
Pacific RR Co. 166 Cal 6:Ili, at page 620. It has been suggested., hG".-.--eve r 3
Page Sixteen -Beacon Bay
that; such lands must first w relea sed f::-om ·U:e public servltud~ "cefa:;:::,
be:ing used for pu_."'l)cses other tha.'1 LY"J aid of n-?.vigaticno But fu:ia i s j11St
no so. If -bhe legisl2.tm·e 2.ut},..orizes a use othe:::-'i:ihan o!l e ii::i aid of'
navigation., even t:b..ough it has not. also declared said t:ideland.9 1:mder
such authorization to be free of t:te public servitude, and p .irposefnl::y
did not so declare tli..em free, such lands rrtly be used for th~ purpose
authorized, but still subject to the public mrv:it1;"da for cvl'lm'l€Tce, navi-
ga;bion and fisr.e:ry, and such use r,,,ay ~_cmi...'11.l.e as long as tr...e legislature.,
in its absolute discretion, nay determine., IJJ.inois fu.i..lroad Co v IJJ.:i.,ois,
If the legislc1l,ih-e does so declare that tte tide and subrr.erged la:riis
are free of t...½e public sa.:vi"l:iu.de the effect c£ such act on a particular
parcel of land.rs tit~ ~jll vaxy,. If t:te naked title or jus privat1.rn has
previous~ be.:>..,n granted to a private party by a valid patent crr stat,a~ory
grant i'rcm the state, the declaration co:nstiti.rtes a release of t..":e public
se.!.'>.itude as to tbzt particular tide er su.b.'TISrged land and will vest in
such private parL~-an estate in fea simple absolute to such lande If the
tidel.a....""<i title is still retained by the state, ar-its trustees, and tr.e
legislature frees such land of the p..lblic servitude, and such lands m·:e
located outside t:r..e i..."1Corporated city limits of any Ca1iforr.lia city at
least two miles than tbe legislature rray authorize the sale o:f such lands
to private part;ies in fee simple absolute, as such lands are no longer
subject t,o the public servitude, and are outside tbe cL3ss of lands subject
to the · constitutional restrai.lll; of.' Article XV -, Section 3 of the Ca.l:i.farnia
Constitutiono New authoriza·tiona would ~--ve 'to be enacted far sale of
said lands in light of Stci:i o of 1909, Chap. 444., page 774., now· Public
Resouxces Code 7991. If the tide ro:-submerged land title of a particular
Page SeVenteen -Ee2 con Bay
parcel is :released from -t he pl,blic ·b!""'Jzt by tr~ legislatu=e and the
land is located wi t:b...i""l t:•70 riiles of acy i:cco!'p-Orated city limits er
CRl ff>o:rnia cities, s2.id lands are freed o:f tr.e public ser,rltud= bu:t they
car,not be 6Tanted in fre ehold to any private party by reason of -the
constituticnal 5r.Jilbitiori..s placed a."'l them by &ction 3, .Article :w :> oi'
the Califarnia C.onstU,ution, eY.cept Tu7der the limited circumstances not.9d
in Atwood v H-'.m,mand., 4 Cal. 2d. 31, City cxf Leng Baach v Hansell, 3 Cal
3rd 462; and County of O:ranga.? v Heh7, 30 Cal App. 3rd 694. Tbe lands
can be used i' or public purpas es other than :in aid of navigation by i➔eascn
o.f be:mg freed from the public ·truste But they could be used far such
purposes, any purpose, in fact, even though not in aid of navigation, and
without decla:r-i...ng said lar.ds as being freed from such public ·t.rust., i'or
t:he legislature 1 s plenary poi.er is -inh.-erent in i·li, a part of' the sovareig:nty
o:r tra state -and it is plenary in natu....."""8; absolute and exclusive cmly
in the legislative arm of tr..e government -not the executive., not tha
judiciary., subject to the will of tre people, 1mo are sovereign., to alter
or amend such power by appropriate referendum., A..'M;., I Seco 2 of th.a Cali-
for.n:ia Constitutione
The only significance, then, of a legislative declaration that said
J.a.nds are no longer re cessary fat' com:nerce, navigation and f'isheries, and
thereby free of the public trust, is to perrq:i:t the vesting of said 12.i·!d
in an estate in fee simple absolute in a p::dv--crlie party 1,mo either has acquired
the naked fee title (jus privatum) or may acquire it., if constitutional
inhibitions are not present. Presentl.y, the onzy constitutional. i.."1£1..ibition
upcm the state is under Section 3 of Article Xll of' the Galifarnia Co-usti-
Page Eig.i.'rbeen -fu,3CO'!l Bay
tution$ Section 2 i s not 2.n :L7h"libition upon ·t,r.e state, as noted.) but
cnJ.y upon priv-ate i:ariies, othennse there c0uld ne".TE'!' be a release
of any portion c£ arry ·bide m-subrc~ged lacis from the public Ge.~ v .L-01.1.c.e,
and t..1-ri.s consequence could materially reduce ttce effect ive aDd practi.cci
po1-;er in t rie legislature to i.ur:'...lerr:erit the public servitude fo:r the be;:,tz
wa lfare o.f tre prople o.f the state of ca·1 ;forniao Allbn:tton v City of
Winona, 178 So. 199:1 803., ¥..ayer v Miln, 36 US (11 Pat) 102, 139 (1837):,
6 Loyola LR 498 ..
If a tide o:r submerged land is freed af tre pu blic tru.st and t itle has
been er-is conveyed to priv-ate owners in a., estate in fee simple absolute.,
then a later taking of tbe particular parcel ftir acy public purpcse, wraTu½.er
in aid af' navi.:,oa~::.on, or zrzy-other p-.;;,.,.--rpose .-, will :requi...-a the r ecogni·ticn
enri.nent domain u;:tler tl:e FL-f'th and F01L...-teenth Amencl.rnerrts of the Uni~
States Cc:1stitution, and Art. I, Seco :Ll+ cl the Calil'orni.a Co nst~t;itic-..n.,
See also CCP 1240.0l0 et seq., The se :restrah'"Jts periai.'11 to t h e payment of
just compensation for either the taking or injuries to the land .. ll CLl.
For a private P3-rly to take tit~ to the naked .fee ar jus privatuJn onJ..y ,
subject to the public se.."l"'V:i.tude, means that he may be also expressly aut..'l-io-
rized to use such tide er submerged lamls far, pu.."f'I)oses ot:b..er than in aid ci:
navigaticm, but still be subject to the public servitude_, and any imprcvements
he makes on said land he risks l osing in the absence of such a valid license
from the state and from tl:e federal governmerrt in the exercise of the federal
navigational servitude. Such an :inhibition upon a private O"...rner 1 s futwa
use and investn-.€rii is subst&-,tial 9 arrl obviously restricts his choice of
Pa ge N:met e e.n -Be a con B3 y
use s, or compels him to s e ek e..~:ress l egis l a:l:iive a uthorization that s t-:.c h
uses ar e permLssab1e " The state or f e d er2.l gcr.rern.i:Bnt 1 s settin g af harbor
Jines, with the acquies c ence of "lib.e other s avareign, w.ay con stitut e si.t -:h
a license but ·t;his que stion re;rains moot · and i:f ·the improver did n ot r.a ve
valid title at the time af ·l;he imprmrement may xesult i.'1 a :finding that
the irop:rcnreme.i.--rt is a purprest 112'eo As long as the state, or i t s ·brusteas,
retain o "tTn9rship and title orEE ·tide and subrr:Brged lands there is no
reason for ~~ch a declaration of :release from the public servitude becausa
tre plena:z:y power i.."1 the state is sufficient to permit any and aJ.J. uses
of tide a.'1d submerged la-ids by it, if it so authorizes such use by the
approp:d.ate legislztive acto
Settlemerrt or Ccmpro::'.ise of Boundaries Between Tidelands and Upla..."l ds
..
Title to tj,,""J..ands which are 01.!Dsi.de the t.._.ro mile limits o.f a corpu.:.·-:1.te
city li'1lits are subject to being adversely possessed aga·ii:15t t li..e stata,
birl; ,;;-:i.e:r-e they are., only tbe naked title or jus privatuxn., i::asses .9 su.b j act
to the jus pu.bl:i.c,;:,;:1, which remains i71 the state .. People v Soutl>...e rn Tocii'ic
R.R. Co. 166 Cal ., 614 . All the elements cl" adverse possession t hat wou:!n
apply as 'between private parties must be four.d., If one holds s-u.ch l ands
under a claim of right it must be found tri..at the adverse possessor occupied
all the land adverse]s pcssessed. IT it is claiJned under a colour of title .,
t):1..ere nmst be a document oi' title, albeit defective., in which the poo s esscr
has a bona fide belief in its validity, and has actually occupied some por-
tion of the propert~. If the statme requires payment of taxes :for a cer-
tain period af' years, this ·will be required. The statute of lim:i.tatio'.ili3 heei ns
Page 'r:reni;y -Eea cori Eay
to run '\•1hen the state is ousted of its :baked title oz-bear seisin,. ,-f·
·t;he r:;ecessary tirr:e has lapsed, an:l the land.3 have not ·been i-7i·i:;hcL-rci.,;m
from sale t,he d.isseis a-would rove perfected his -title, bu:t still re
subject to th€ public servitude,. Title to tide 12.ndss :-ih;ch are ·withh.eld
from sale cannot be acquired. by adverse pcssessian .. Pa·tton v City of
Los Angeles, 169 Cal " 5 21.. He ;.,e-v-er, wm re there is a bona fide dou.bt
regarding trie location of a rJcunda:ry be·i:;ween a tideland and uplclJd, tha
state at7 i!:;s ·tnistee (city or county) ii' act:tng in good fait h could 1:33.ka
a reasonable agreement with upland owners fixing the exact location of
mean high tide lines. Les Angeles v Borax Consolidated Ltd .. 102 Fed 2d
52. However, it must be stressed tr.at 2:JY such mnndary agreemerrt., and
the ltigation thereunder, must be clearly founded en a bona :fide disputa
between a true ~ •. pl e:::ntl cwner and the state., er its trustee 9 as holr1Pr o.f
the public trust ;n tb"' tidelands., ot:ts:rwise., it 'Will be found to be an
attBri1pt,ed grant cr sale of larrl in violation o:t' .Article XV, ]Ecticn 3
o.f thA 03.lif'arnia Constitution., 1-'iuchenberger v Sity of Santa Honica,
2o6 CtlQ 635 o T}•0 re mu.st be a diligent effort to determine the original
loca:..;.on of the n:ean hig.1-i tide line. City af.' Long Eeach v Mansell, 91
Cal., 2d., 32. wnere it is established. that no such efi'o:ri:i 'h"'as trade this
would vitiate a finding oi' bona i'ides respecti.11g arry such compromise.,
or settlement.
The variotW actions noted in Stat. of 1931., Chap. 200., P• 369, ani
Stat. of 1929, Chap . 142, page 274., purported:cy settling ·lihe boundary dis-
putes · between tidelands and uplands in Newport Bay ·were apparent:cy not bona
fide in the sense that no diligent e.i'fart 1-1-as 1rada to establish the o :..-"igi.nal
harbor lines as they existed in th.air natu..ral s ·t;ate as called for under the
Page T;-re n t y Ona -Beac on Bay
Hn1sell c a se ., Thus, :if the 12.nds t,o be e.xc ri ::in ged under SB 367 ~rere
landss affected by s u ch boundary-l-ine settler.errts -t.hey may ooJ
Be::1 con Bay itself, sub.)'3 ct to t he public se.1.'V Hude 9 ani not the pro;:e.:::-
subject far such a71 e x c11..anga.,
The conclusions ·l;o be cL.""'awn from the a bO'm opinion is that tli...e titla
to Beacon Bay is subject to the public servitude for commer~e , navigation
and fisheries, and if tre lease from the city of Ne-nport BBach to tli.s rraster
lesssee of Beacon Bay is valid then the use of Beacon Bay solely for resi-
dent; a1 . purposes is also valid., For the enactrr..ent o.f the Stai;o of 1931, Chap~
999, i:a.g-e 2003., --..mich became Civil Cede Section 718(e)3 repealed in 1949
to becorra Governzrent Cede 37387., the legislature., m the e:rercise of its
plena_ry power 'J're:r tide !ind submerged lands, as authorized under Shively
v BowL7, 152 US 1., ii, Sp,. Ct. 548~ 38 La Ed., 331, am. rehted cases ,
declared that upon a f:inding by a city gTa..--rtee of tba tidelands t1-tJ.St that
de-.--elo;::-:rrnt of its tidelands f cr conn-4€rcial.. ii.:terests would be i..'Tlimical to
the best interests cf t,he city, the city c211 lease said lands fer residen-
tial p-0-"'1X-5 es. T'.r.e legislature has rr.ade no such similar declaraticn en
behalf of counties, how--evsr, :if they are grantees of the tidelands trust
from the state., though under its plenary ·,power i·t; could m.a.ke such a declara-
tion as :in Governrrent Cede Section 37387 imch apply to nnmicipal-i-bies only ..
.Also., the legislature could make such a decla.--r-ation without _:requ.;";"':L."'!g a
finding that cf-I.her uses would be tn:i.rnical to such lessor 's :i...nte rest, s-ince
the mere authorization of such use by the legislature is sufi'icierrb9 With-
out such a declaration the cotmty of Orange could not maka such a lease
of its granted tidelands far residential _purposes.
Page Twenty Two -Beacon Bay
Beacon B:!y~being tide or sub merged land_,. a.."1d sub ject to t:he public
servitude, t-12.s ;:ncluded :in t,he statut.o:ry grant from the state to the
County of Orange 1mder the State of 1919, Chap o 526 1 page llJ8 ,. Apparerrtly.:i
the funclar.:lental error was in n Gt later :realizing that the stat1J:bory gra.71t
to the city was :1ot identical wjJ;h that ·t.o tr.:.e county., Sae Stat,, of l919.,
Cl3.apo 494, page lOll, for the statutory grant to tl1-.e city,. It lim.ted the
grant Qf tidelands &7d submerged lands within the present boundaries of
said c:i. ty .. o o·which border upon and are in front of the upland new vtm€d
by said city and such other upland as it nay herea.i"!;er acquire. The above
grant to the County cf' Orange reads: all that porticri or the tidalar.ds and
submerged lands border;'l"lg upon a.-:rl. under }~,.,-port bay i.71 said county af
Orange, i-hich are outside of' the corpcxate limits of the city of Newport
Beachounot li-.tl.ting i:ihsm to tidelanis which adjoin L"'nds owned lr<J tl'..e
county, as :in the case ;n the city g:ra.nt. Beacon Bay being in county ter-
ritory Edi the ti"ne of tra s2id 1919 grants, acco:rdingly, passed to the
Cau:nty of Orarige in fee simple., subject to the public serri:tu.de :far nav.i-
gatiet.L,
The subsequent ~--mexation by the City cl' l~-,port Beach oi: the Beacon
Bay tidelands or.b Hay 28, 1930, did not t:ransfer title over said tidelands
to Newpori Beach, as annexaticn wi.ll have no effect on the · fee titles of
any lands, either public <:SJ:' private. 'Wheat;ley v Consolidated Lunber:~Co.
167 Calo 441~ The st.atutory grant by the State of' Cali.£0:rnia., Stato o£
1927, Chap~ 70, page 125, also did not convey the Beaccn Bay tidelands to
the City o:f ~art Beach, smce this 1927 grant expressly excluded from
its conveyance all such lands hereto.:f.'ore grarrted to either the Courrliy of'
P2.g3 Ti ·remy Thl"'Be -Eea co:n Bc.y
Orange or ·i,he City of Ne.-rpo:rt Beach., T'ne c onsequence of th; s grant 1'1'2.S
to m~e 'bbe. 1919 grant to the city equi vale:.1t wi iih that of the l919 g!·2.t.it
to ·bte county, by inch!cling all ·tidelands still ret=1ine d by the state
,;ti:c;hi.TJ tha boundaries of the city as it existed in 1919 9 which }:-1...a d not been
fric.111.dsd b'<J the prior 1919 gTarrt; to the cit,yo As to being a n attempt t o
vest in the city tidal.ands wri..ich existed out .iide the 1919 rmmicipal
boundaries would be and was a grant ,mich was void_, as a mtte:r-cf law9
for such lands had alreaCJ;'f been com1ayed by tr..e 1919 g.,:a1.t to ·b}-·.,e Cmmty
o.f Orange o
T'ne c onseqn°nce of tr.:.e a bc,re analysis is to show ·that Beaccn Bay tidalands
have from 1919 always been vested i.., the Couhty of Orange in fee simple,
subject to the p:.blic t:7u.St, not :L.'1 t.i.½e City of Newp ort Baacho Had the
Beacon Bay tidelands been vested :L."1 the City at' r:e ·wpo..."'i; Beach by tJ1.e
1927 gr--cwb, or the 1930 annexation, the extension of the rraster lease
on Janua.:y 9, 1950, ~ch is to e:::-.rpire en December 31.:i 1987, ·would ba
val.~ as ret-;reen the City of Newpcrt Beach and the mster lessee,. .And as
a valid lease it would have been within the scope of the provi_sions of
Section 1402 of the 19.53 Charter of the City oi' Newpcn:-t Beach ., If the
lease was valid and in force at the time of the adoption of the Charter
in 1953 it and future leares in exliensicn thereof would b-,e exempt from
the consequence of Section 1402, requ.ir'i....ng approval of a maj!Ority of the
electors voting on such proposition in a:trJ' gweral m: special municipal
election. Since the lessor or City of Newport Beach is, and i-.--as not, ths
holder oi' tre estate in fee s:imple in Beacon Bay the lease by tbs city to
the master lessee, and subsequent sub-leases therewJder, are void, as a
matter of law.
Page 'I'i-,enty Four -E <::a (:OD fu.y
The County of Orange, as a;-mer of the e sta te in i'e e sique;., s u b j ect
to t ,he public trr.1st in Beacon E,ay.:> may he able to g-.cant its tidela.:...----<ls
1-r-lthin the bcundaries cf the City of Ne~-;port Beach t o tbe Ci t y of lT91.;port
Beach~ or it may be able to ratiJ:.y the earlier leases of the cit~,i Qf
7 Jewpart Beach as to such county t,idel.aJ.7ds, am possibly, thereby, pl9.ce
them within the scope ar.d protection of Section ]102 of the 1953 Ne1fl)ar-t
Beach City Qi..arter. It also would be v-."Orfah considering nagotiati..""lg for
a mast.er lease from the county dixec~Iy, as i·l; is empowered to make such
a lease, bl.rt for tre lack of legislative authorization for use as :r--esi-
dential purposes under trust lands administered by ·the county, unJ.ika those
authcr::ized for a 211'.micipality under Governrrerrt Cede 37387.. Also; suc..'l. st-aps
that are taken may require further state authorization., as any steps taken
are in exercll:e of the _public servitude vested in the state., not Tu'le city
or the cotmty. Tne state, b.ot-rever., could not act without the ccunty also
acti..rig, since the stai:;e could not corrvey a ·t;itle to ~:et-;port Eeach "t-m.ich it
had previously conveyed to the cc-unty;J Atwccd v Hmmnond_, 4 Cal. 2d"' 31.,
I '
An a.c--tion for declara-1:; ory relief' migbt be reccmrcended be·t't'f--een all t,he i:;e.rties --.
the state., the county, the city, ar.d lessees., to :resolve ·bhese qu.estionso