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Home My WebLink About09 - Harbor Fees for the New Harbor Department and Select RentsPORT CITY OF O � _ i NEWPORT BEACH City Council Staff Report <i FO RN January 8, 2019 Agenda Item No. 9 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dan Matusiewicz, Finance Director - 949-644-3123, dmatusiewicz@newportbeachca.gov PREPARED BY: Theresa Schweitzer, Senior Accountant, tschweitzer@newportbeachca.gov PHONE: 949-644-3140 TITLE: Harbor Fees for the New Harbor Department and Select Rents ABSTRACT: On July 1, 2017, the City took over responsibility for managing harbor operations from the Orange County Sheriff. Since that time, the City utilized the fee schedule from the County of Orange. The City's fee study consultant, MGT of America (MGT), recently completed a comprehensive review of the Harbor Department fees. The real estate appraisal and consulting firm Netzer & Associates determined the fair market value of rents charged at Marina Park, guest/transient slips throughout the harbor, and select rents at the Balboa Yacht Basin. On August 8, 2018, the Harbor Commission reviewed the recommended fee and rent updates and unanimously recommended the updates, with minor changes, to the City Council for adoption. Subsequent to Harbor Commission review, staff recommended some minor corrections and adjustments to the Schedule of Rents, Fines, and Fees (SRFF) noted in the discussion below. The proposed harbor fees and select rents were then brought before the Finance Committee on November 29, 2018, at which time they recommended this matter be brought to the City Council. RECOMMENDATION: a) Conduct a public hearing to receive comments on the harbor fees and select rents; b) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and c) Adopt Resolution No. 2019-3, A Resolution of the City Council of the City of Newport Beach, California, Adopting and Revising Certain Harbor Department Fees and Rents within the Schedule of Rents, Fines, and Fees. 9-1 Harbor Fees for the New Harbor Department and Select Rents January 8, 2019 Page 2 FUNDING REQUIREMENTS: The fiscal impact of the proposed guest mooring and Marina Park slips rents and the new cost of services fees is shown below. If approved, the change in fees are proposed to be implemented thirty (30) days after the approval date with an estimated increase to Tideland revenues of $190,981 for the remainder of FY 2018/19 and approximately $458,354 thereafter. DISCUSSION: On July 1, 2017, when City assumed responsibility from the County for managing Harbor operations, City utilized the fee schedule from the County of Orange. On July 10, 2018, Council created the Harbor Department and eliminated the Harbor Resources Division. In order to ensure the proper recovery of the City's cost of services pursuant to Newport Beach Municipal Code Section 3.36, the City's fee consultant, MGT, reviewed and updated the new Harbor Department fees. The detailed staff report and attachments reviewed by the Harbor Commission on August 8, 2018, are included as Attachment B. The updated proposed rent and fee schedule is included as Exhibit 1 within Attachment A, where the following changes were made based on the Harbor Commission's recommendation: 1. The Large Vessel Guest Anchorage Rate — Non City Tackle — no boat, per Lineal Foot charge, was corrected to read $0.47, rather than $0.047; and 2. Lend a Mooring Line/Help to get on a mooring was removed. The name of the fee was confusing and misleading. Instead, the staff time to process and fulfill a request for a lost or broken line was added to the actual cost of the replacement line under the Lost/Broken Line fee (Attachment A, Exhibit 1, line 9). As Harbor Department staff gained more experience and understanding of the Harbor services required under the restructure, staff has minor updates to the Harbor fees to be more clear and to reflect the efficiencies gained in the new department. These updates are subsequent to the Harbor Commission review, and are detailed in Exhibit 1 of Attachment A. The following lists the proposed changes (unless otherwise indicated, the fees did not change): 1. Renamed 9-2 FY16/17 Actual FY17/18 Actual Proposed Annual Variance from FY 17/18 Guest Moorings $ 179,080 $ 214,239 $ 588,000 $ 373,761 Marina Park Slips $ 133,461 $ 208,407 $ 277,000 $ 68,593 New Fees N/A N/A $ 16,000 $ 16,000 Total potential revenue increase $ 458,354 If approved, the change in fees are proposed to be implemented thirty (30) days after the approval date with an estimated increase to Tideland revenues of $190,981 for the remainder of FY 2018/19 and approximately $458,354 thereafter. DISCUSSION: On July 1, 2017, when City assumed responsibility from the County for managing Harbor operations, City utilized the fee schedule from the County of Orange. On July 10, 2018, Council created the Harbor Department and eliminated the Harbor Resources Division. In order to ensure the proper recovery of the City's cost of services pursuant to Newport Beach Municipal Code Section 3.36, the City's fee consultant, MGT, reviewed and updated the new Harbor Department fees. The detailed staff report and attachments reviewed by the Harbor Commission on August 8, 2018, are included as Attachment B. The updated proposed rent and fee schedule is included as Exhibit 1 within Attachment A, where the following changes were made based on the Harbor Commission's recommendation: 1. The Large Vessel Guest Anchorage Rate — Non City Tackle — no boat, per Lineal Foot charge, was corrected to read $0.47, rather than $0.047; and 2. Lend a Mooring Line/Help to get on a mooring was removed. The name of the fee was confusing and misleading. Instead, the staff time to process and fulfill a request for a lost or broken line was added to the actual cost of the replacement line under the Lost/Broken Line fee (Attachment A, Exhibit 1, line 9). As Harbor Department staff gained more experience and understanding of the Harbor services required under the restructure, staff has minor updates to the Harbor fees to be more clear and to reflect the efficiencies gained in the new department. These updates are subsequent to the Harbor Commission review, and are detailed in Exhibit 1 of Attachment A. The following lists the proposed changes (unless otherwise indicated, the fees did not change): 1. Renamed 9-2 Harbor Fees for the New Harbor Department and Select Rents January 8, 2019 Page 3 a. The Inspection Fee — Charter Boats was renamed Marine Activities Permit — initial (line 13), for clarity and consistency with the current fee name; b. The Inspection Fee — Live Aboards, Marine Activities Permit Re -check was separated into two line items and renamed Live Aboard Permit (line 8) and Marine Activities Permit — renewal (line 14), for clarity and consistency with the current fee names; and c. The City owned Guest Moorings — Offshore and Sub -Permittee Guest Moorings — Offshore have been combined to one line item and renamed "Guest Moorings — Offshore (Year -Round) (line 26) since they all have the same proposed rent. 2. Deleted a. The Inspection Fee — Dock, Piling, Code Enforcement was deleted from the fee study, this is not a fee that would be charged; b. The Mooring Inspection fee was deleted from the fee study as this is not a fee that would be charged; c. The Impound Fee (Boats over 14') fee was deleted from the fee study because this is the same service as the Towing Fee (Boats over 14'); and d. The Live Aboard Permits, Marine Activities Permit (initial and renewal), and waitlist fees currently under Public Works — Harbor Resources will be deleted as the recently studied fees can be found under the Harbor Department fees. 3. Added a. A Dinghy Storage rent (line 25) was added which is based on the Guest Mooring — Onshore (Year -Round) rate. Currently if a dinghy is adrift or lost, we keep it for five (5) days at no charge, after that we charge $50 per day, or if it is impounded the dinghy owner is charged the impound fee for the first day and then $50 for each day thereafter. The dinghies are first stored at the docks and then at Basin Marine. 4. Moved a. The Balboa Yacht Basin Rentals (except Dinghy Rentals) and Commercial Piers under Public Works - Harbor Resources (updated title to Public Works - Tidelands Management) will be moved to Community Development — Real Property; b. Dinghy Racks and Onshore and Offshore Moorings will be moved to Harbor; and c. Wait List fees will be moved to Harbor. 5. Studied (generally speaking, the fees are lower because of the Harbor restructure) a. The fee for being added to the Balboa Yacht Basin slips and garages waitlist went from $38 to $27 (line 21); b. The fee for being added to the Balboa Yacht Basin and Marina Park dinghy racks waitlist went from $38 to $23 (line 22); and c. The fee for being added to the live aboard waitlist went from $38 to $5 (line 23). 6. Other Adjustment a. When studying the waitlist fees, MGT updated the fee study workbook with the indirect citywide overhead from the most current cost allocation plan, which resulted in some fees going down a few pennies. Although the full cost came down ever so slightly, none of the recommended fees changed, due to the City's practice of rounding the fee down to the nearest dollar. 9-3 Harbor Fees for the New Harbor Department and Select Rents January 8, 2019 Page 4 The service numbers highlighted on the left within Exhibit 1 of Attachment A are the fees and rents that require Council's approval. The remainder of the changes move existing fees and charges to their appropriate location within the SRFF. Although these do not require Council approval, they are included to provide the full picture of changes made to the SRFF document. The proposed harbor fees and select rents were brought before the Finance Committee on November 29, 2018, at which time they recommended this matter be brought to the City Council without any additional changes. If approved, it is recommended the proposed fee changes take effect thirty (30) days from the date of approval. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to Government Code Section 66018(a) (two publications with at least five days intervening between the two dates), Government Code Section 66016(a) (notice mailed at least 14 days prior to the meeting to any interested party who files a written request) (mailed notice to Building Industry Association of Southern California, AT&T, Southern California Edison, and Southern California Gas Company on December 11, 2018), and the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Resolution No. 2019-3, including Exhibit 1 — Revision to the Schedule of Rents, Fines, and Fees — Harbor Fees and Select Rents Attachment B — Harbor Commission Packet — Proposed Rents and Fees for Marina Park Marina and the Harbor Department ATTACHMENT A RESOLUTION NO. 2019- 3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, ADOPTING AND REVISING CERTAIN HARBOR DEPARTMENT FEES AND RENTS WITHIN THE SCHEDULE OF RENTS, FINES, AND FEES WHEREAS, on July 1, 2017, the City of Newport Beach ("City") took over responsibility for managing harbor operations from the Orange County Sheriff's Department; WHEREAS, Newport Beach Municipal Code ("NBMC") Section 3.36.010 provides that services and programs that primarily benefit a person requesting the service are traditionally funded in whole or in part from fees charged to the person who initiates the service; WHEREAS, NBMC Subsection 3.36.010(C) further provides that to ensure fees charged for services are an accurate reflection of costs, the City should conduct a fee study at least once every five (5) years; WHEREAS, NBMC Section 3.36.030(C) provides that the City Council may modify the fee resolution upon a determination that there has been an increase or decrease in one or more cost factors relevant to the calculation of the actual cost of providing the service; WHEREAS, in 2010, the City retained MGT of America, Inc. ("MGT") to prepare cost allocation plan and cost -of -services studies for City services ("Agreement"); WHEREAS, pursuant to the Agreement, MGT has conducted cost -of -services studies on a rotating basis by City department; WHEREAS, pursuant to the Agreement, MGT prepared a cost -of -services study for the Harbor Department; WHEREAS, pass through costs for actual services or tangible goods do not include staff time; WHEREAS, statutory fees are mandated or capped by another authority, such as the State of California; W1 Resolution No. 2019 - Page 2 of 3 WHEREAS, the Beacon Bay Bill, California Constitution Article 16, Section 6, Newport Beach Municipal Code, Section 17.60.060(D), Section 17.60.020(E), and City Council Policy F -7(D) (Income Property) require that the rent received by the City from third parties using the Tidelands be based in part upon an appraisal, and reflective of the fair market value related to such uses; WHEREAS, in order to determine the fair market value of rents related to the City's harbor, staff engaged Netzer & Associates, Real Estate Appraisal and Consulting ("Netzer & Associates"); and WHEREAS, Netzer & Associates provided an Appraisal Report, Fair Market Rent — Guest/Transient Moorings Newport Harbor, California, on November 27, 2017 and an Addendum dated March 26, 2018 which added Guest Slips at Marina Park, the monthly Dinghy Storage Space rent at Marina Park, and the Guest Mooring Rate on private (Non - city owned) tackle. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The City Council does hereby revise the Schedule of Rents, Fines, and Fees ("SRFF"), in part, as depicted in Exhibit 1, attached hereto and incorporated herein by reference. Except where prohibited by law, all fees provided shall be rounded down to the nearest dollar. Except as expressly revised by Exhibit 1, all other provisions of the SRFF shall continue in full force and effect. Section 2: Direct pass through, or actual, fees may be updated, without further action by the City Council, by the Finance Director as necessary to ensure recovery of cost. Section 3: The recitals provided in this resolution are true and correct and are incorporated into the operative portion of this resolution. Section 4: If any section, subsection, sentence, clause or phrase of this resolution is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Resolution No. 2019 - Page 3 of 3 Section 5: The City Council finds the adoption of this resolution and revisions to the SRFF are not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 6: This resolution and all proposed fees and rents shall take effect thirty (30) days following adoption of this resolution, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 8th day of January, 2019. ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'SiOFFICE 11 A ftn C. Harp Ci y Attorney Diane B. Dixon Mayor Attachment: Exhibit 1— Revision to the Schedule of Rents, Fines, and Fees – Harbor Fees and Select Rents 9-7 1 7 3 4 5 fi 7 a 9 f 13 la 15 16 17 1B 19 20 71 22 23 24 75 26 i7 38 29 30 31 32 Exhibit 1 - Revision to the Schedule of Rents, Fines, and Fees - Harbor Fees and Select Rents A B C D E F G H Current Charges I Proposed Charges 2018 ad] Full Cost/Market Value 3 lzrulmle 9-8 Total or Base Incremental - fit SERVICE NAME DESCRIPTION Total or Base Fee Total or llase Fee REFERENCE TYPE Fee applicable CPI Notes Implerneatatlon Date HARBOR DEPARTMENT Filling Fee for Appeal of a Harllor Commission achan to the City C9nnUl or a Harbor Re5norceS Manager action 16096 Leaded Hourly 1M% III Hourly Appeal hearing to the Harbor Commission- shared In-ty,_ Rate Rate M.C17,65.030 COS -Fee II-ItYes 71142018 Appeal of a Harhur Resources Manager action on a Appeal of ieaselPerent under Section 17 60.080 Lease Perms to the Harbar Commission S 100.00 S 100.90 M.C. 17.60.080 COS -F" Flo,rly Yes S10D Recovery r M.C. 3-36.030 Exhibit A 7/24/2018 Dinghy Rack Rental Apiorcation Fee Application fee to pi monthly rental alreement 50-i3D 17.00 MC. 3.36.030 COS -Fee 51740 Yes 2/712019 Irriccurd Fee initial Coe m im curd a vessel on the I day S1SO.00 $60,00 MC. 3.36.030 COS -Fee 568.07 Yes 1/7/2019 impound Fee Loose or Lost and Found Cost to impound a vessel on the first day. Typically Boats Vessels -,els under 20 feet. 5 50.00 5 46.00 M.C. 3.36.030 COS -Fee $46.71 Yes Free first 5 da s then charged per day 20/2M KnY Card AnIF11,11ni The cost to rc lace the key to the Manna Not, facilities $0.00 23.00 M , 3.36,030 COS -Fee $23.12 Yes 21212019 Fee to revmw application and assist large boats in lu a Boat Permit 89, Lineal Feet harbor at anchorage or mooring 50.00 64.00 ML. 3.36 030 COS -Fee 564.10 Yes 2f712019 Live Aboard Parmit Per year 5339,00 275.00 M.C. 3.36.930 COS -Fee 5275.37 Yes 2/712919 Cost to replace a line provided to a renter that is either Lost/Broken Line returned broken or not returned at all 50 010 S 102.00 M.C. 3-36,030 COS -Fee 5102.09 Yes 21712019 Cancel 72 heurn or more charged the C nceRahon Marina Park Cancellation Fee Fee char ed d e', -to.., cancelled $10.00 S 11.00 M.C. 3.36 D30 COS -Fee $11.60 Yes fee, Iess rhan 72 hours forfeit do -t Z/712019 Fne to reserve a slip at Marina park - deposit charged Charged against stay, forfeited if canceled with Iess Manna Park Deposit ,i stn $59 5 50.00 Resolution Deposit Yes than 72 hours notice 2/7/2019 $12 plus ritual per Cos -f.. Pass Wiri- Park FiaL llatn for Elcctrlot Actual cost SO.13 kWh kWh usage M.C. 3.36X30 Thru 512.03 59.13 Yes 2/7/2019 Mann a A,hmOes Permit - initial 5731.06 341.00 M. C. 3.36.030 COS -Fee $341.31 Yes 21712019 Mann c Activities Peri -renewal annual 5216,00 275.00 M, C. 3.36,030 COS -Fee 5275.37 Yes 21712019 Time to process initial application and gather Mooning & Shp, Rental Initial Application Fee appirconale d -Fir a 50,00 17.00 ML 3.36.030 COS -Fee 517.40 Yes 217/2019 Cost to evaluate the possit i6ry of extending a mooring &1 -ng Este-cn Permit length 5000 S 326-00 M -C-3-36930 COS -Fee 5326-75 Yes 21712019 Raft Up Permits - East Anchorage Cost to process Broth[ foe I eYCnlf Sam S Iii M.0-3 35030 COI 561-27 Yes 2/7 2019 Cost of staff to put in place aApropraite sea lion Temporary Sea Lion Deterrent deterrent and remove when owner mm Ims SOLD 136.00 M.C. 336.031] co"Fee 5136.15 Yes 21712019 523 plus IW% Cas -Fee Pass Towing Fee II over 14' T-1-1 ass through 200% Conti art., Cast Contractor Cost M. C. 3 3, 030 Thr. 523.20 Yes 2M2019 TOWIng Fee lonals under 14' City staff 5011 due, by Gfv Staff 5 68.00 M.C. 3.36.030 COS -Fee $68,07 Yes 2[7/2019 Wait Llsf for Falb- Yacht Basin Slips and G-K.s S 38,00 27.00 M. C. 3.36 030 COS4ee 5 27.78 Yes 21712014 Walt Ldt for Balboa Yacht Basin/Manna Park Dinghy Racks 5 38,00 S 23.00 M. C. 3.36.030 COS-Fec 5 23.26 Yes 20Y2019 Wait Cat for Live Aboard 5 3800 S 5.00 ML 1740.110 6 COS -Fee 5 580 Yes 2/712019 Dinghy Rack Rental - Marina ParklBatboa Yacht Basin Rental rat,, lorracksa, at Manna Park and BYE 525/Month 35 pgCWnih Resolution Rental 535/MI Yes 2/72019 50.625 per Uncal Foot Di Storage Based on Onshore Guest Mocnn 5 LF n1 hl R,solubon Rental 50,625 LF Yes 2/7/2019 Rental 1 to spend the night on an olfshure guest 51.25 per Lineal Foot Replaces "City owned Guest Moorings - Offshore" on Gwen Manan s - Olfshoro ye -Round Firconli 527/Ni h¢ (LFjZni Resolution Rental 51.25 LF Yes Ci schedule. 21712019 gailypirdtee6iosa Mai QIFshere{a4ay- 41.23-pea44rr,sii- I- Oci 623 H 4414 R-I.Hen Rami 53,23µF Yes 01 charged by Count w oh-I'le 0404140 Sufi-{4>Fmilesti,ues+AWxFNsgs-Olfil'i S 2 29 PoF- U a 141111. R.QkRwo Ramal St A.L Yes Orii charged by Count , now obsolete. 2p l9 $0,625 per Lineal Foot Replace$ "Sub -Pe,i inee Guest Moorings - Onsliarc" Guest Mocrirt s-Ortshorc Ycar-R.undl Based on fair market rale analysis Sll Ni hl LF nl hl Resolution Rental $0.625LF Yes on C ... I sched.ie. 2/71,2019 Nightly lee to hold an impounded boat. The City cannot Same charge as Guest Impound Fee - Nightly Storage Fec rent this space to a paying customer- S50 Ni ht Mooring Rental Rates Resolution Rental see notes Yes 2/7/2019 Cost of renting a large vessel. Thereis addhtionai time Same as Offshore 51.55 per III I I Vessel 811F I Offshore Guest Mccuring inolvedur Ending the proper location Guest Moorings LF Fe ht Resolution Rental 51-551LF Yes 217/2019 Large Vessel Guest Ancha<age Rate - Non II Cost at keeping the tackle in Oe water 14 vessel suet Same as Offshore SOI per Lineal Foot Tribe no boat tied u _ Guest Moorings lF of ht Resolution Rerttal SO.47 LF Yes 217t2019 3 lzrulmle 9-8 33 34 3s 16 37 30 39 40 A2 43 44 45 46 47 alt 49 50 51 Exhibit 1 • Revision to the Schedule of Rents, Fines, and Fees - Harbor Fees and Select Rents A 13 r n E F H 9-9 2018 ad] Current Charges Proposed Charges Full Cost/Market Value Total or Base Incremental - (if SERVICE NAME DESCRIPTION 1.1.1 or Base Fee Tot of er 0a1e Fee REFERENCE TYPE CPI Notes Implementation Date Fee appllcahlo} Manna Park Roat Sli s 40' 511) Based on fav market rate analysis 560/Ni ht $80 per Night Resolution Rental 80 NI ht Yes t17/2019 Manna Park Boat Sli s 55' 5Ii Based an fair market rate analysis 582.507Ni ht 5110 per Night Resolution Rental 5110 nl ht Yes 2 2014 Manna Park Boat SILPs(Overhang Charge) Based on lave market rate anal sco SL50 foot 52 per Fool tR hl Resolunon Rental 52 foot Y.s 2f7/2019 See Mooren s � Oflshorc, pes linear foot, per year 5 36.14 5 36.14 Resolutions 201f 17 Rental Sce Resolunon Note CPI adjustments orwr sP ratef 1/l/2019 See Mporm s - onshpre law linear root, per licar 5 18.06 5 18.06 Resolution 2016-17 Rental Ste Resolution Note CPI adjustments occur separralelv 1 1 2018 Same as Oirshwe $1.50 per Lineal Fool. Multi -hull Vessel - 2 hulls Based on lair market rate anal 1s Guest INoonn s LF rel ht Resolution Rental 51.50 LF Yes 217 2019 Same asO 5 ore 1.75 per neopool. Muhl hull Vessel 3 hulls Iiasvd on lair market rate ana4ysis Guest Moorings JUf ifnlgh Resolution Rental $1.7511.F Yes 2/7/2019 COMMUNITY DEVELOPMENT - REAL PROPERTY Balhaa Yacht Basin Sli 1Gara e/A artmeot Rentals Rrsa Eurion 2010- See A rtments Per month A arement 06) 5 2,416,40 5 2,509.26 134 Rental $ 2.508.26 Note CFI adjustments occur selpazately 7/1/2018 Resolution 2010- Ser A arlments Per month A artmcmx AS & a7 5 2,68S.45 5 2, 78b 9h 13; Rental 5 2.786.96 Note CPI adjustments occur serrazately 71212018 Reaoiu Lon 2010- Sce Gars a Rentals Per month 5 356.17 5 369.63 13: Rental 5 36963 Note CPI ad ustments oruur separately 7 1 2018 Rale thalged shall be the greater of the slip or the beat_ II the bust is larlger than the slip 11 is 1n. the Resolution 2010 charge shall he haled on the slip pace plus the extra 5Ii Rentals 20' SIIPer foot, pc, mamh 5 23.06 5 24.81 134 Rental 5 24.81 No Weal feet of the boat, at that same slip rale. 7/1/2018 Rale charged shall be the greater of the slip or the boat. II the boar is longer than the starlit ism, the Remiutron 2010 charge shall he based on the stop pale plus the extra SIP Rentals 25' SII - per Foot, per month $ 23.49 5 26.26 134 Rental 5 26.26 No lineal fact of the boat, at that same I.p rate. 7/1/2018 Fiat. charged shall he the grealer of the slip or the boat. 11 the boa[ is longer It- the slip o[ 1s m, the Resolunon 2010- charge shall be based on the stop price plus the extra Sip Rentals 31' SIIper Foot. per month 5 27.01 5 27.31 134 Rental 5 17.31 No lineal feel of the boa[. at that same slop rate. 7/1/2018 Ratc charged shall be the greater of the slop w the boat. II the boat is longer than the slop it is 1n, the Resolution 2050 charge shall be based on the slip price plus the extra Slip Rentals 32' SIIper foot ser month 5 27.40 S 27.80 134 Rental S 27.80 No lineal feel of the boa[ at that same s4p rate 7/l/2018 Rate charged shall be the gt.ater of the slop or the boat. If the boat is longer than the slip of is on, the Resalution 2010 charge shall be based on [he slop price plus the extra Slip Rentals 34' Shin per foot, per month 5 2955 5 31.45 134 Renta; S 31.45 No lineal feel of the boat at that same illrare. 7/1/2018 Rate charged shall be the greater of the shp or the twat. If the boat is longer than the slip it 1s m, the Rmto,tlon 2010- charge shalt be based on the shp pnce plus the extra Slip Rentals 35' SL .r lent, poi m.alh 5 3043 5 3t-45 134 Rental 5 31.45 Nn knral lee[ of the boat at Shat same slop rale 711/2018 Rate charged shall be the greater of the slip or the boat. 0 the boat is longer than the Op d is In, the Reeolation 2010 charge shall be based on Gee slip price plus the extra Shp Remail 37' Slip per ton[, per month 5 30.43 5 30.86 134 Renta; 5 30.86 No lineal feel of the boar at that same, slip rata 71112U18 Rate charged shall he the greater of Iho s14, or the boa 1. If rhe boat Is longer than the Slip t1 IS In. the Resalutrnn 2010- charge shall be based on the slip price plus tire extra Slip Rentals 40'Slo- per foot, per month S 33.84 $ 36.66 134 Rental 5 36.66 No loneai feet of the boat, at that same sto rate. 7/1!2018 Rate charged shag be the greater of the shp or The boat. if the haat 1s longer than the slip it rs 1n, the Resolution 2010 charge shall be based on the slip price plus sire euro Slop Firntats a5' Shp per foot, per month 5 36.94 5 34 fig 134 RenuF S 3968 No loneat feel al the that, at that same sup rate 7/1/2018 9-9 51 53 54 55 60 til 62 G 64 66 66 62 Exhibit 1 - Revision to the Schedule of Rents, Fines, and Fees - Harbor Fees and Select Rents A B r n E F r u 1 9-10 Current Charges I Proposed Charges 2018 ad] cull Cnst/Market Value SKIMCE NAME DESCRIPTION Total or Rase Fee Iutal or Base Fee REFERENCE TypE Total or Base Incremental - lif Cpl Notes Implementation Date Fee applkahle] Rate[ arged shall be the greater of Ihr 0,1,o, the boat. IF he boat is longer than the slip Itis m, the Resolution 2010- charge, hj4 be basetl an the slip pace plus the extra qtP Rcnlels 50' Sop -per loot, per morn- :2-57 5 44.39 134 Rental 5 44.39 No Uncal icer of the boat, al that same sn rale 711/2018 _ Rate 'l—Ked shall he the greater, of the sip or Ihr baa, It thr boat Is longer than the slip N n tn. the Resolution 2D10 charge shag be based on the slip price plus the extra sl Rentals 60' Slip per loot per month S 49.42. 5 48.83 134 Rental 5 48-83 No Imeai feet of the boat, at that same sk rate 1/1/2018 Rale charged shag be the greater a the slip nr the boat- It the boat Is longer than the slip it Is rn. the Resolution 2010 charge shall be based on the slip price plus the extra Shp Rentals 75' Slip per footmonth S 50.88 S 50,95 134 Rental 5 50.95 No bncal feet of the boat, at that same slip rate. 7 1 2018 pl.'s Re, 2012-91, 201 Commcrual See Resolution See Resolution 92, 2012-96, 7012 Rental Sce Resolution No 7/25/2017 PUBILIC WORKS - HARBOR RESOURCES II e.cept Dinghy Rentals Moved to Community O—Ict mens - Real Property Peseik,taam2B:D- tics R.r-mpwth 2-t1G,;: S hr Zcl 134 Rwuai 5-2.5061.26 4.w Reso rut+an 20 i8- bee n.len6s Pex-IrrenN H 2n695,45 134 Ra.tal 5--2; afiL 94 Wale 7�-y See h 6Renlak Moved to Harbor Dc l 1.ca1 —..x4r 5-25 W 5 75,Do ResduUan-2815,4 Rami 5 2r� Wate Cluad w.tws Rezolutia.-203& bee aflwk, P--, b5 — �3'�e:a-: a(19 64 134 nanta! aee,5a Nw. eplav stment RaseEtear{;e+t-styli-be-the fIF aler-o([he-slip.ar.ih.� boab.p-Nleboalrs lewgty- {haw-{heslrp�Hs-Iwr[Aff rtesesW4en-2O}f� cAargesgaRl>PbaseAan-tJs�sWfrpr..4P{arNree.t+a- 51 134 Ra.6as 5-----4444 We k«ta4leecpFThe-heal-aEih,aFF+,ar aaI. Pate<4lafged4a .^g 0„ ah-{r...�....e - ResaWlrea-20}0- .- ...e ? '-kM2.iFT 23A9 26,29 }a= R." 2b-76 lie Yxsea4loeF14 4—t. N-tlr�: .;keslslsttw,-Inrlhe- ItesakA--ANIG- iiTar ge+{ra4-beb4rewdrd titwskals d}' oW, h [ 27,85 6 27.33 3-34 Itins al S 27.3} Pkf NrseaNaar-ciibebo-ai,-aFtAa 7-Li7O}8 7SakeEllalge/15rI,aR-kfape-gff4lFpFe4lkw-yLpg1-{hP beat,lFlhe4waiasJen::;,:.rlkae Aeselaxen-2BaA- Nstr ' e-pkstheentsa 27,40 5 244911 134 116.614 S- 2290 Wa kn2a iF1�2U19 sill �. pr-43as heat -11 -the Reswlauen2B]& -h--s"--hal! ... be baised-3t..`+,kP-Pr�eMra 34-. >-per lr«d..per rrsor thS 29 5 6 3145 134 A." 3i-45 Ain k— rale T{;{7819 Naletha Resok.tton,7WaF Hs yil v c4sarBesisauLe •.u�„,�„P$ncaMplusaheeHlra leak 3 ' n+rle.tk S�.rs3 5 3},45 134 A..Iw 5 33.45 No wlelFEeewtiheboay-ac-1 ase, 7i3f281A RalecTlarBed ,hall-be-rAe-grea{erafi{reslip or -titre isoat.R-lknkwaFlsJo.ger-N>uw1>+e-sip-IF Is-l,.rslre- ReSalWra.-2014 rhuBeShlu c-�_....�-a.�-1m:.c-�kP9rrenPluall..url{ht k -{ Ttw.lh 30.33 xA11416 134 Repsol 6 30,86 No wrr.W4eefaN 1770}8 War. Resak.trare2634 11 shahoat—to.g rndr9e�lwlK-11Pba'.ed eM1F'pI1GPpk,4tbeRH ld uak 441=6✓.p—Pcv-Foot,iser marrth S39.81 5 a6,66 334 R -PW F 36.66 N. wreai 7444438 1 9-10 76 77 74 Za 1W 111 M2 S3 tl4 ai SG Fees and @heves to be approved bylCoundl Exhibit 1 - Revision to the Schedule of Rents, Fines, and Fees - Harbor Fees and Select Rents A © C ❑ E F G H Current Charges Proposed Charges 2018 adJ L•,11 f..r/M�.4.r Vali,. 9-11 Total or Base Incremental - pt SERVICE NAME DESCRIPTION Total or 0a,e Fee rnlal or B-- RLF LRLNCL TY PL Fee WI applkablej Notes Implementation Date Mia-chargeA-shallbe•iSse-EreaiavK.l-t.`� -'.�� .-�t,c. Resalntwrr-3818- N+arBa',haiLJu-kasotl-ea-{tu sk6p�w+.,Nw Aelitals 45=5 r-tnnnih [ .a�>A 1M Ren4a1 5 38.68 Dlo LneaFleeFo{{{r�jlo.ai,-at;pa;-satae.allp�sat¢, l/1/1P}ki _ _ ualacbarged-si+a7Fr�e {he-sliperil Aesdwwn2949- ch Ia«+`Pu+s'IAe-u.ua wts 12-57 5�4:R9 id4 Aanut 5 44.49 Ola Iweslaeet�i-shehn.a, 6a:8 Rate hwged-5S'aR 1. thv graa[eFaNNe-siryrecibe tiFi 4-944.4-1 H+ItX gff Ab Ftesali,[AIn 2oSo- cJsar qh.s{he erF- lool. w munfl,S i--:7 :w 2 ] 13a Aarwal 6_1 A'e Ial "W18 Rat itl{he-sugar the hltat.J1 lheli6aF+StttnRer-1haP ilre-Slryrlt+5-m, i1i4 Aewsltrtbn�[31t1- chargeslw"...;e,..��.�...-eT`JW1,urnPh.�ilK`elltia- Ac-utak 5 .m S 60,45 144 Aan1a1 ala IlneaNaec-ai+Ae-Iraat.al-Ika 7{-t{711Ya Moved to Harbor Department See- B{fshore (near-IeoE 36,44 9esefut—QIG16-17 A." 5ee-Reseiutwn Note See Aashorb — 38.06 IRD6 Aetatptwn-311ib-}7 A." &.e4 so64— NB - Pitts fsmrtwr W Moved to Community Develo mens - Real Pro en SeeResalaFleP 6enAeselwlon R—Lal S-4-4tawn Ne Residential See Resdution Sec Resolut— Resolution 201510 Rental 5- Resolution No 2/10/2015 Plan Review Appeal Hea—g FWing Fie for Appeals chargedhotjOy see notes sce nates M. C. 17.65.030 COS -Fee Ho.0y Yes ID[I%loaded H..,Jy Rate sec append,. 7/241201 Appeal of Lease Permn under 5ection 17 60.08G S 100.oB S 100-00 M.C. 17, 60.080 COS -Fee Hourly Yes 5100 Recovery per M.C. 3.36.030 Exhibit A 712412018 Liveisboard-Permµ+ Dclelc. Studlee untler 1lardor n r Aeea.�Permd-Fe< s� aas,rra aa•�.-1S-0a,A�b roc-wa 5� xe� z Zli1.s 7AarweAdwr{.esFe..wic-and�ai Delete, Swdlcd under Harbor Det 685:00 F Y34.an i7.-19.049 GOi-r-" 5 }i3,82 Yes aRat irinAH Wi desFcKnu[—r wtewal 0 e l et e= SLudied ursder Harbor Det 283,W 41.40,040 0064— Yes 2jqtmF14 pier Permit Transfer Commcscial and non mmmernat i S 235.00 S 250-00 M 17.60,020(0; COS -Fee 5 25003 Yes 7 24 2018 Wan Check Fce New Censtmoion w Agci,cy Appraval 5 523.90 S 557.00 M 17.50.020 D COS -Fee S 557,94 Yes 7124/2018 Plan Check Fee Maintenance 5 123.00 5 131.00 M.C. 17.50.020 D C054ee S 131.21 Yes 712412018 RGP Dred In Permu 5 1.70700 S 1.821.00 MC 17,55.020 1)1 COS -Fee S 1,821.16 Yes 712412018 VVaitl,at{or-8albea-YaOsl tw" Delete. Studied under Harbor ve l '5,90 M.c. 3.36,93p 0044— 6-4806 Vet 2 ol9 iAlaals{- Ir -t r Ur ctr, Studied —der Harbor Dept S 's,90 i 1SAO 41,Gs"^.--.01401=; OW Faa 5 381LS Yes NXF29:0 9-11 ATTACHMENT B HARBOR COMMISSION PACKET - PROPOSED RENTS AND FEES FOR MARINA PARK MARINA AND THE HARBOR DEPARTMENT 9-12 `t Po�T CITY OF s NEWPORT BEACH Harbor Commission Staff Repo TO: HARBOR COMMISSION rt August 8, 2018 Agenda Item No. 1 FROM: Carol Jacobs, Assistant City Manager - 949-644-3313, cjacobs@newportbeachca.gov Theresa Schweitzer, Senior Accountant - 949-644-3140, tschweitzer@newportbeachca.gov TITLE: Proposed Rents and Fees for Marina Park Marina and the Harbor Department ABSTRACT: On July 1, 2017, the City took over responsibility for managing harbor operations from the Orange County Sheriff. Since that time, the City has utilized the fee schedule from the County of Orange to charge for fees and rents. Over the last year, staff has evaluated the services provided and completed an appraisal of rents charged at Marina Park and Guest/Transient Slips throughout the harbor, and selected rents at the Balboa Yacht Basin as well as a fee study for various tasks the Harbor Department performs. RECOMMENDATION: 1. Find this action exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. 2. Recommend to the City Council approval of Rent and Fees Schedule (Attachment C) for Marina Park and the Harbor Department. 9-13 FUNDING REQUIREMENTS: There are no funding requirements for this item. If City Council approves the attached Rent and Fees Schedule for Marina Park and the Harbor Department, the revenues will be approximately as follows: Fee Name FY 16-17 Actual FY 17-18 Actual FY 18-19 Budgeted Proposed Annual Guest Moorings $179,080 $198,143 $150,000 $588,000 Dinghy Racks $5,375 $5,450 $5,000 $ 7,400 New Fees N/A N/A $0 $440,000 Total $184,455 $203,593 $155,000 $1,035,400 BACKGROUND: As part of the City taking over the harbor from the Orange County Sheriff's Department, the City has evaluated both the rents and services provided to harbor users. The City engaged Netzer and Associates to review and provide a current appraisal of the harbor rents in November of 2017 (Attachment B). At the December 11, 2017 Harbor Commission meeting, the Commission had some additional questions and concerns regarding the rents and asked Netzer for some additional information. Netzer completed an addendum in March of 2018 (Attachment C). In addition, the City's fee study consultant, MGT performed an analysis of fees in the harbor and are shown as Attachment C. Rents and Fees are defined separately in the Municipal Code and are further explained below. DISCUSSION: Rents The Beacon Bay Bill, California Constitution Article 16, Section 6, Newport Beach Municipal Code, Section 17.60.060(D), Section 17.60.020(E), and City Council Policy F - 7(D) (Income Property) require that the rent received by the City from third parties using the Tidelands be based in part upon an appraisal, and reflective of the fair market value related to such uses. In order to determine the Fair Market Value of rents related to the Harbor, staff engaged Netzer & Associates, Real Estate Appraisal and Consulting. A Fair Market Rent — Guest/Transient Moorings, Newport Harbor, California was completed on November 27, 2017 (Attachment A). The Harbor Commission received the report at their December 11, 2017 Commission Meeting. At that meeting, the Harbor Commission requested additional information regarding fair market value of the slips at Marina Park, rents for dinghy racks at both Marina Park and the Balboa Yacht Basin. In addition, Netzer studied Daily "Guest Anchorage Rates of Non -City Owned Tackle and Large Vessel fees for the West 9-14 Anchorage (if approved sometime in the future). This addendum was completed on March 26, 2018 (Attachment B). Both reports provide the complete analysis. Fees The Newport Beach Municipal Code (NBMC) Section 3.36, City Council Policy F-4 (Revenue Measures) and Item 12 of the Fiscal Sustainability Plan (FSP) provide staff and the City Council with policy guidance related to setting cost recovery targets and updating user fees. User fees, or cost -of -service fees are charged to a private citizen or group for services performed or provided by a government agency on their behalf. If the service benefits primarily an individual or group of people, then the burden of that cost should be bore by the person receiving the benefit. NBMC Section 3.36 sets the cost recovery for user fees at one hundred percent (100%) with the exception of the subsidized fees listed in Exhibit "A" of that same section, as well as those limited by California or Federal statutes. A recommendation for less than a hundred percent (100%) cost recovery rate occurs, for example, when a service is beneficial to the community at large along with specific individuals or groups, and/or when there is an economic incentive, or disincentive, to do so. In these cases, the General Fund is essentially subsidizing the service. The City has been managing the City's mooring fields since July 1, 2017. During this time, staff has identified a number of services that the Harbor Department performs for those using the harbor. Harbor staff and the Finance Department along with the City's fee consultant, MGT, have evaluated the services provided and calculated the cost of service to individual users of the harbor. The proposed Rent and Fee Schedule is Attachment A. Should the Harbor Commission approve the rent and fee schedule, staff will then present the fee schedule to the City Council for consideration. Any newly proposed fee that is not approved will be absorbed through General Fund subsidy. ENVIRONMENTAL REVIEW: Staff recommends the Harbor Commission find this action exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the Harbor Commission considers the item). 9-15 ATTACHMENTS: Attachment A — Netzer Appraisal — November 27, 2107 Attachment B — Netzer Appraisal Addendum to File No. 2017-30 Attachment C — Proposed Rent and Fee Schedule 9-16 APPRAISAL REPORT FAIR MARKET RENT - GUEST/TRANSIENT MOORINGS NEWPORT HARBOR, CALIFORNIA DATE OF VALUE NOVEMBER 27, 2017 PREPARED FOR LAUREN WOODING WHITLINGER REAL PROPERTY ADMINISTRATOR CITY OF NEWPORT BEACH COMMUNITY DEVELOPMENT DEPARTMENT 100 CIVIC CENTER DRIVE NEWPORT BEACH, CALIFORNIA 92660 PREPARED BY NETZER & ASSOCIATES 170 E. SEVENTEENTH STREET, SUITE 206 COSTA MESA, CALIFORNIA 92627 FILE NO. 2017-030 9-17 NETZER & ASSOCIATES !leaf Estate appraisal K Consulting November 30, 2017 File No. 2017-030 Lauren Wooding Whitlinger Real Property Administrator City of Newport Beach, Community Development Department 100 Civic Center Drive Newport Beach, CA 92660 Re: Appraisal Services City Tidelands Fair Market Rent — Guest/Transient Moorings ("Sub -Permits") Dear Ms. Wooding Whitlinger: In accordance with your request and authorization, I have undertaken the investigations and analyses necessary to estimate the Fair Market Rent, Fee Simple Interest, in the above referenced real property, which is the subject of this report. James B. Netzer conducted inspections of a representative sampling the subject properties in October and November 2017. Based upon the work undertaken and my experience as a real estate analyst and appraiser, I have formed the opinion, as of the 27°i day of November 2017, subject to the Assumptions and Limiting Conditions contained in this report, that the subject has the following market values: Daily Fair Market Rent for the Off -Shore Guest/Transient Moorings ("Sub -Permits") $1.25 per Linear Foot of Vessel, adjusted annually based on the change in the CPI. Daily Fair Market Rent for the On -Shore Guest/Transient Moorings ("Sub -Permits") $0.625 per Linear Foot of Vessel, adjusted annually based on the change in the CPI. Daily Fair Market Rent "Premium" for Multi -Hull Vessels on Guest/Transient Moorings Between $0.25 per Linear Foot of Vessel and $0.50 per Linear Foot of Vessel, depending on the beam of the multi -hull vessel, which is between 20- and 40 -Percent of the Base guest/transient mooring fee, adjusted annually based on the change in the CPI. Daily Fair Market Rent for "Large Vessel" (100+ LF) Off -Shore Guest/Transient Mooring $1.55 per Linear Foot of Vessel, adjusted annually based on the change in the CPI. "Standard Practice" associated with Fair Market "Booking Fee" for Guest/Transient Moorings 1 have concluded there is no "Standard Practice" beyond the City's "cost recovery" basis 170 F. Seventeenth Street, Suite 206 ♦ Costa Mesa. CA 92627 ♦ Phone (949) 631-6799 ♦ FAX (949) 631-4631 9-18 Lauren Wooding Whitlinger November 30, 2017 Page 2 This letter of transmittal must remain attached to this Appraisal Report, which contains 21 pages plus related exhibits, in order for the value opinions set forth to be considered valid. I invite your attention to the following Appraisal Report that has been prepared in accordance with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute and is in compliance with the USPAP standards, and sets forth the data and analysis which my opinions are, in part, predicated. Thank you for the opportunity of serving you in this matter. Respectfully submitted, [AI No. AGO03143 9-19 TABLE OF CONTENTS CERTIFICATION.......................................................................... 1 INTRODUCTION.......................................................................... 3 AREA DESCRIPTION..................................................................... 7 I IIGIIEST AND BEST USE............................................................... 8 APPRAISAL PROCEDURES ............................................................. 9 FAIR MARKET RENT ANALYSIS ..................................................... 10 VALUATION............................................................................... 18 ADDENDA................................................................................. 20 9-20 Newport Harbor Guest Moorings :Newport Beach, California November 30, 2017 NETZER & ASSOCIATES CERTIFICATION To the best of my knowledge and belief, I certify that: The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions and conclusions. I have no present or prospective interest in the property that is the subject of this report, and have no personal interest or bias with respect to the parties involved. I have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of the this assignment. I have no bias with respect to the property that is the subject of this report or to the parties involved in the assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniforni Standards of Professional Appraisal Practice. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. I have made a personal inspection of a representative sampling of the property that is the subject of this report. In accordance with the USPAP Competency Provision, I certify that I have the knowledge and experience to complete this assignment and have appraised this property type before. Disclosure of the contents of this appraisal review is governed by the Bylaws and Regulations of the Appraisal Institute. In furtherance of the aims of the Institute to develop higher standards of professional performance by its Members, the appraiser may be required to submit authorized committees of said Institute copies of this report and any subsequent changes or modifications thereof. The Appraisal Institute conducts a voluntary program of continuing education for its designated members. MAI's who meet the minimum standards of this program are awarded periodic educational certification. As of the date of this report, James B. Netzer has completed the requirements under the continuing education program of the Appraisal Institute. 9-21 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES I have personally conducted an inspection of a representative sampling of the off -shore moorings located in Newport Harbor, which are the subject of this report. Based upon my investigation and analysis, I have formed the opinion that the Daily Current Pair Market Rent for Off -Shore Guest/Transient moorings (`Sub -Permits") in Newport Harbor, as of November 27, 2017. is: $1.25 per linear foot of vessel, adjusted annually based on the change in the CI'I. Based upon my investigation and analysis. I have formed the opinion that the Daily Current Fair 1•lai-kct Rent for On -Shore Guest/Transient moorings (``Sub -Permits) in Newport Harbor. as of November 27. 2017. is: $0.625 per linear foot of vessel. adjusted annually based on the change in the CPI. Based upon my investigation and analysis. I have formed the opinion that the Daily Current Fair iMarket Rent "Premium" for Guest/Transient moorings in Newport Harbor for multi -hull vessels M-iose beam Is greater than a "typical" mono -hull. as of November 27. 2017. is: between $0.25 per Linear Foot and $0.50 per Linear Foot, depending on the beam of the multi -hull vessel, which is a premium of 20 -percent to 40 -percent of the Base guest/transient mooring fee. adjusted annually based on the change in the CPI. Based upon my investigation and analysis, 1 have formed the opinion that the Daily Current Fair Market Rent for "Large Vessel" (100+ LF) Off -Shore Guest/Transient mooring in Newport I larbor. as of November 27, 2017, is: $1.55 per linear foot of vessel, adjusted annually based on the change in the CPI. Based upon my investigation and analysis. I have formed the opinion that the "Standard Practice" for "booking fees' associated with the administrative costs of frequent renewals, as of November 27. 2017 is: 'there is no "Standard Practice" beyond the City's "cost recovery" basis. Respectfully submitted, Al No. AG003143 9-22 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES INTRODUCTION Purpose of Report The purpose oi�this report is to set forth the data, analyses, and conclusions relative to my opinion of: 1) the Current Fair Market Rent for the "Guest" or "Transient'' moorings ("Sub -Permits") located upon City managed tidelands throughout Newport harbor: 2) the Current Fair Market Rental "Premium" for multi -hull vessels whose beans is greater than a "typical" mono -hull; 3) the Current Fair Market Rent for Large Vessel (over 100 LF) Off -Shore Guest/Transient mooring: and. 4) the "Standard Practice" for "booking fees" associated with the administrative costs of frequent renewals. Function of Report The function of this report is to estimate the above Fair Market Rent and `or procedures associated with the "Guest" or "Transient- moorings for the City's internal purposes. The appraisal is made Lit the request of the City of Newport Beach by Lauren Wooding-Whitlinger, Real Property :administrator. Community Development Department, who is the intended user of this report. In the event that this matter proceeds to trial or other governmental or administrative hearing, the Trier -of -Fact will become an intended user. n,gti of VnlnP The date of value presented in this report is October 24, 2017. Given the number of properties involved in this report not every property was inspected individually and inspections of a representative sampling of the off -shore moorings and the surrounding environs were completed during October 2017. Scope of Investigation This report conveys the results of my investigations and analyses concerning the subject property. The report includes a summary of the information utilized and the methodology used in determining an estimate of value. Interest Appraised The interest appraised and considered in this appraisal include the Fee Simple Estate. under the assumption that the subject moorings will eventually be leased. "rhe term "Fee Simple Estate",, is defined as follows: , Ibsolute oivnei•ship unenczunbered by any other interest or estate, subject only, to the limilations imposed by the gover171uenlal poii,ei•s of laxation, eminent domain, police poiver, and escheat. appraisal Institute. "I`lie Dictionary of Real Estate Appraisal. Fourth Edition. (Chica_o. 2002).p. 113. 9-23 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES Market Rent Defined The term -Market Rent"I'-, as used in this report, is defined as follows: The most probable ren/ that a property should bring in a Con7petitive crud open mar'kel 1'8f1C'C'/T71g Clll C011di/10115 Lmd res//'7C/iO11S Of /11C' .S1)eCif1C'd lecke Clgl'eel7Jen/ including, term, rental adjustment and revaluation, permitted rtses, use res17'iM017S, and expense obligations: the lessee and lessor each acting prude1711y C117d knoirledgeably, and assuming consunnnation of a lease C01711'00 as of 'a specified dale and the passing of the leaseholcl front the lessor to the lessee under conditions irher'eh ,. 1. Lessee and lessor and are typically motivated; ?. Both parties are well-informed or \yell advised, and actlllg in what they consider their own best interests; 3. A reasonable time is allowed for exposure on the open market: q. The rent payment is made in cash in United States dollars, and expressed as an amount per time period consistent with the payment schedule ole the lease contract: and S. The rental amount represents the normal consideration for the property leased unaffected by special fees or concessions granted by ally one associated with the transaction. Probability of Change The opinion of value is based upon my knowledge of conditions as of the date of this report. Constantly changing economic, social, political and physical conditions have varying effects upon real property values. Even after the passage of a relatively short period of time, property values nlay change substantially and require a review based on differing market conditions. Legal Descriptions I have not been provided with the legal description of the property; however, this does not impact the analysis or conclusions presented. Owner of Record and Property History It is assumes that title to all of the submerged tideland properties being appraised is vested in the City of Newport Beach or the State of California and administered by the City of Newport Beach. I,'nless specifically addressed in this report, none of the properties have transferred or been cnctlnlbered \with long term leases in the recent past. Assu1111)tions and Limiting Conditions The analyses and opinions in this report are subject to the follo\ving aSSUlllptlons and limiting conditions: \ppraisal Institute, "rhe Dictionary of Real Estate Appraisal. fourth Edition. (Chicago. 2002). p. 176. 4 9-24 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES Specific The Pair Market Rent analysis presented is completed on a "global" basis for all off -shore guest/transient moorings and applies to all moorings located upon the tidelands in Newport Harbor under the jurisdiction of the City of Newport Beach. The current use set forth in the report is assumed to be the Highest and Best Use, as it is beyond the scope of this assignment to assess the I-lighest and Best Use of each submerged tideland property. 1 reserve the right to make such adjustments to the analysis, opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available. General No investigation of title to the property has been made, and the premises are assumed to be tree and clear of all encumbrances, leases, use restrictions. easements, cases or actions pending, except as specifically discussed in this report. Title is assumed to be good and marketable, and that the property is under responsible ownership, competent management and available for its highest and best use. No survey. legal, or engineering analysis of this property has been made by the appraiser. I assume no responsibility for any condition not readily observable from the customary inspection of the premises, and that there are no hidden or unapparent conditions of the property, subsoils or structures that render it more of less valuable, except as noted herein. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocation for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. The maps. plats, photographs, and exhibits included herein are for illustration only, as an aid in v1sualizim, matters discussed within the appraisal. They should not be considered as surveys nor relied upon for any other purpose, nor should they be removed from, reproduced, or used apart frons this report. I assume no responsibility for economic or physical factors, which may affect the opinions herein, stated which might occur at some date after the date of value. I reserve the right to make such adjustments to the analysis. opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available. Information contained in this appraisal has been gathered from sources, which are believed to be reliable. and where feasible, has been verified. No responsibility is assumed Tor the accuracy of information supplied by others. No opinion is expressed as to the value of sub -surface oil, gas, or mineral rights, or whether the property is Subject to surface entry for the exploration or removal of such materials except as expressly stated. The property is appraised assuming to be in frill compliance with all applicable federal. state, and local environmental regulations and laws, unless otherwise stated. The property is appraised assuming that all applicable zoning and use regulations and restrictions have been complied with. unless otherwise stated. The property is appraised assuming that all required licenses, certificates of occupancy, consents. or other legislative administrative authority from any local, state, or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based, unless otherwise stated. 5 9-25 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES 'Flie Americans with Disabilities Act ("ADA") became effective .January 26, 1992. The appraiser has not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property. together with a detailed analysis of the requirements of the 1DA. could reveal that the property is not in compliance with one or more of the requirements of the Act. if so. this tact could have a negative effect upon the value of the property. Since the appraiser has no direct evidence relating to this issue, possible noncompliance with the requirements of the ADA in estimating the value of the property has not been considered. Unless other\vise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on the property. The appraiser, limvever, is not qualified to detect SLICII Substances. The presence of substances such as asbestos. Lirea lornialdchyde roam Insulation, or other potentially hazardous inaterials may affect the value Of the property. The Value estimate Is predicated on the assumption that there is no material on or in the propertv that would cause a loss in value. No responsibility is assumed for any such condition. or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this licld. ifdesired. If the client is aware or becomes aware of any conditions. the appraiser should be consulted immediately to assess the impact, if any, upon the market value. I'lie appraiser reserves the right to male such adjustments to the valuation herein reported, as may be required by consideration of additional data Or more reliable data that niay become available. No opinion is intended to be expressed, or implied, for matters, which require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate appraisers. I shall not be required, by reason of this appraisal, to give testimony or to be in attendance in court or any (governmental or other hearing with reference to the property without prior arrangements having First been made with me relative to such additional employment. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the w ritten consent of the appraiser. I do not authorize out of context quoting, or partial reprinting of the report. In the event the report is placed in the hands of a third part),,, it is requested that such party he made cognizant of any and all limiting conditions resulting in the basis of illy employment and the discussions thereto, as well as those set forth herein. fhe submission of this report constitutes the completion of the service authorized. It is submitted upon the condition that the client will provide the appraiser customary compensation relative to any subsequent required deposition. conferences. additional preparation or testimony. lie appraiser respectfully requests that neither all nor part of the contents of this report shall be disseminated to the public through advertisement. public relations. news. sales, or other media. Without written consent and approval of the author. particularly the valuation conclusions. the identity of the appraiser, or any reference to the Appraisal Institute or the MAI designation. in the event the appraiser is subpoenaed for a deposition. judicial or administrative proceeding- tend is ordered to produce his appraisal report and rile. the appraiser will immediately notify the employer. It shall be the responsibility of the employer to obtain a protective order. 1, 9-26 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES The liability ofNetzer & Associates and the appraiser responsible for this report is limited to the client only and to the fee actually received by the appraiser. Further. there is no accountability, obligation or liability to any third party. If this report is placed in the hands of anyone other than the client. the client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussions. The appraiser is in no way responsible for any costs incurred to discover or correct any deficiencies of any type present to the property -- physical, financial. and/or legal. It is a -reed that the appraiser is not a necessary party in any inquiry or judicial proceedings. 11' called upon to testify in any litigation or other proceeding arising out the duties in this matter, and is compelled to incur court costs, attorney's fees or other out-of-pocket expenses in connection itll court proceedings. such costs or expenses. together with the appraisers' usual hourly, per diem applicable for study, preparation. testimony or travel will be paid by the party (or parties) who acts to bring any suit requiring a judicial proceeding. any dispute or claim made with respect to this report shall be submitted to and resolved in accordance with the rules of the American Arbitration Association for arbitration, and the decision of the Association shall be binding. All appraisal services. pursuant to this report, shall be deemed to be contracted for and rendered in Orange County, California. and any arbitration or judicial proceedings shall take place in Orange County. California. "he signatory of this appraisal report is a member of the Appraisal Institute. "file Bylaws and Regulations of the Institute require each member to control the use and distribution of each appraisal report signed by such member. Therefore, except as hereinafter provided, the party for horn this appraisal report was prepared may not distribute copies of this appraisal report. in its entirety. without the written consent of the signatory of this report. The report and parts thereof and any additional material submitted, may not be used in any prospectus or printed material used Ill conjunction with the sale of securities or participation interests in any Public Offering as defined Wider l'S Security laws. Further, neither all nor any part of this appraisal report shall be disseminated to the general public by the use of advertising media. public relations media. news media. sales media. or other media for public communication without the prior written consent of the signatory of this appraisal report. ARCA DESCRIPTION Newport I larbor is the focal point of the incorporated city of Newport Beach. which is located in coastal Orange County approximately 10 miles southwest of the Santa Ana Civic Center. -File coastal city was incorporated on September 1. 1906. The City reports an estimated population ole 86.688 persons as of 2016. an increase from 85,186 persons as of the 2010 Census. According to the Citv Chamber oil' Commerce, the Influx of the tourist population during the summer months increases the population to over 100,000 persons. Newport Beach is located 85 miles north of San Diego. 14 miles south of Long Beach and 50 miles from dovoitown Los Angeles. "The City's elevation ranges from sea level to 691 feet. With the annexation ol'Newport Coast, the City is comprised of approximately 25 square miles of land area. approximately 25.5 square miles bay, harbor and ocean waters for a total area of approximately 50.5 square miles. The city has 6.1 miles of ocean frontage and 25.4 miles of harbor frontage. 9-27 Newport Harbor Guest Moorings Newport Beach, Cahrornia November 30, 2017 NETZER & ASSOCIATES `vc�vport i Iarbor is one Of the largest pleasure craft harbors on the West Coast and is home to approximately 5.000 boats at residential slips, commercial marinas and moorings. Newport I Iarbor is formed by the Balboa Peninsula on South and the mainland on the north and extends inland to Jamboree Road and the north end Of the Upper Newport Bay (Back Bay). -Clic primary focus of this assignment is the Lower Newport Bay, which is generally defined as the water area south ole the Coast Highway Bridge near the intersection of Coast Highway and Dover Drivc. Traditionally, most of the boating activity within the harbor is concentrated in the Lower 13av as most of the Back Bay is an ecological preserve with limited boating facilities (Newport Dunes. Nc\\port Aquatic Center, U.C.I. Rowing base. Bayside Village and Dover Shores). The l3alboa Peninsula consists of all the contiguous land east of 45`I' Street extending to Peninsula Point and the jetty at the Mouth OI Newport f larbor. Che South side Ol' the Peninsula consists of Sand)' beaches Oil the Pacific Ocean while the north Side of the Peninsula 17ornls the southern perimeter ol'Newport I larbor. HIGHEST AND BEST USE "I lighest and Best Use" is an appraisal concept which is defined in The Dictionary of Real Estate .\ppraisal. "third Edition, as follows: The reasonably probable and legal Ilse cif i7acaly land or an iny)rovecl properly, Which is pht�sicallt,possible, appropriately sill)porled„fillallciall_y.kcisible, and that results in the highest vahte. The foul' criteria that inust be nlet are legal pernlissibiliry, physical possibilitY, financial feasibility, alnd nlaximinu profitabilitY. Inherent in this definition are several conditions, which must be satisfied by the existing or proposed use in order to develop the maximum value. The use must be physically possible for the site. Soil condition, topography, size and shape must be compatible with the proposed use. The use must be legally permissible in that it must conform to current or projected zoning. Similarly. the use must not be precluded by deed restrictions or other encumbrances, which may limit potential uses. Also. the use must be economically feasible. The market should indicate sufficient economic demand so as to support a proposed use of the site. Among the various uses that meet the above criteria. the use which creates the greatest rate Of'return and maxirluun productivity is considered to be the highest and best use of the site. Highest and Best Use Criteria - As If Vacant/As-Improved complete Highest and Best Use study of the submerged tidelands is beyond the scope of this aSSI`(I1n1(:nt. l i1C analysis presented 1S O11 a-oIObal basis and it 1S a SpeerllC aSSlll11pt1017 0f the report that the Highest and Best Use Of the tidelands properties "as i f vacant° and "as improved” is for "Off=shore'' moorings regardless of the time period (permanent or guest/transitory) that the 111001'1110 IS llSed. 8 9-28 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 APPRAISAL PROCEDURES NETZER & ASSOCIATES The appraisal of real property generally involves one, two or three of the conventional approaches to value, and is based upon consideration of market -derived data, the experience of the appraiser, and opinions of other informed market participants. Valuation Approaches Three basic approaches to value are available to the appraiser: the Cost Approach, the Income Approach, and the Direct, or Sales Comparison Approach. Cost Approach This approach entails the preparation of a replacement or reproduction cost estimate of the subject property improvements new (maintaining comparable quality and utility) and then deducting for losses in value sustained through age, wear and tear, functionally obsolescent features, and economic factors affecting the property. The land value is then added to the depreciated cost along with an allowance for entrepreneurial profit to arrive at a value estimate. Income Approach This approach is based upon the theory that the value of property tends to be set by the net income that is to be realized by the owner. It is, in effect, the capitalization of expected future income into a present worth estimate. This approach requires an estimate of potential gross income, an analysis of all expense items, the selection of a capitalization rate, and finally, the processing of the net income stream into a value estimate. Sales Comparison Approach This approach is based upon the principle that the value of a property tends to be set by the price at which comparable properties have recently been sold or for which they were acquired. This approach requires a detailed comparison of sales of comparable properties with the subject property. Approaches Used in the Valuation of the Subject The Sales (or Lease) Comparison Approach is a process of comparing lease rates paid for similar properties, prices asked by owners, and offers made by prospective Lessees. The approach presents good evidence of value because it represents the actions of buyers and sellers.. or in the case of leased properties Lessee's and Lessor's. The Sales (or Lease) Comparison Approach is based on the principle of substitution, which implies "the value of a property tends to be set by the price that would be paid to acquire a substitute property of similar utility and desirability within a reasonable amount of time."/3 Given the preceding discussion. and the interactions of market participants, the Sales (Lease) Comparison Approach is the most relevant approach in estimating the Fair Market Rent and is used in this report. 'Appraisal Institute, The Appraisal of Real Estate, Eleventh Edition, (Chicago, 196), p.398. 9 9-29 Newport Harbor Guest Moorings :,Newport Beach, California November 30, 2017 NETZER & ASSOCIATES FAIR MARKET RENT ANALYSIS Introduction As noted in the Introduction. the purpose and function of this report is to estimate the Current Fair Nrlarket Rent for the guest`transient moorings throughout Newport IIarbor in addition to any "premium" for multi -hull vessels and a "resort fee" for use of "11011 -public" ?Marina Park facilities. Analysis - Guest/Transient Moorings ("Sub -Permits") "flee following table Is a summary of the mooring information uncovered that is judged to be relevant to the Newport Harbor guest/transient moorings ("Sub -Permits'). MARKET RENT SURVEY -GUEST/TRANSIENT MOORINGS OCTOBER 2017 Data No. Vessel Total Monthly Rent Location Total Length Daily, $/Linear Ft. Maximum Management/Administration Moorings (LF) Rent (Vessel LF)* Term I' Avalon I larbor, Descanso Bay & 340 Up to 30' $37.00 $1.23 See Hamilton Cove 31' to 39' $41.00 $1.17 Comments Catalina Island 40' to 49' $50.00 $1.11 City of Avalon 50' to 59' $61.00 $1.11 60' to 69' $80.00 $1.2.3 70' to 79' $98.00 $1.31 80' to 89' $1 1 1.00 $1.31 90' to 99' $132.00 $1.39 100'+ $149.00 $1.49 2/ 4°i of .ILII)', Cherry. Hen Rock, 0 to 29' $39.00 $I.30 2 weeks Whites & Moonstone Coves 222 30' to 39' $49.00 $1.40 Catalina Island (combined) 40' to 49' $57.00 $1.27 Catalina Island Company 50' to 59' $70.00 $1.27 60' to 69' $81.00 $1.25 70' to 79' $95.00 $127 80' to 89' $115.00 $1.35 90' to 99' $131.00 $1.38 100'+ $152.00 $1.52 1113ased on mid -point of vessel len_th range. a 9-30 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES MARKET RENT SURVEY - GUEST/TRANSIENT MOORINGS (continued) OCTOBER/NOVEMBER 2017 Data No. 11 Vessel Total Monthly Rent Location Total Length Daily S/Linear Ft. Maximum Management/Administration Moorings (LF) Rent (Vessel LF)Y Term 2a/ Isthmus. Lmcrald, 1 -lowlands, Little 496 0 to 29' $38.00 $1.31 2 weeks Geigcr. Butlonshell Coves & Cat (combined) 30' to 39' $46.00 S I.31 Harbor 40' to 49' S54.00 S I.20 Catalina Island 50' to 59' $67.00 S1.22 Catalina Island Company 60' to 69' $78.00 $1.20 70' to 79' $91.00 S1.211 80' to 89' SI 10.00 S I.29 90' to 99' $125.00 S I.32 100'+ S145.00 S l .45 3% Belmont Pier & Island White 20 30' to 100' Based on S1.00 15 days Long Beach (Outer Harbor) (permitted for Vessel Belmont Mooring Company T total) Lcngth 4 King Harbor 50 26' to 40' $24.00 S0.72 7 days Iteclondo Beach 41' to 50' $30.00 S0.67 Redondo Beach Marina 51' to 60' $36.00 $0.65 51 Morro Bay 3 36' Min. Based on $0.28 None City ol'Morro Bay Vessel Length Morro Bay 6 Up to 40' S20.00 $0.50 30 clays in Morro Bay Yacht Club 40' to 50' $25.00 $0.56 6 months 6, Port San Luis 20 5S $16.00 Fixed Fee 14 days Avila Beach (pulled in Maxinrrnrt Port San Luis Harbor District Winter) 7r Pillar Point Harbor 38 45' $11.00 Fixed Fee None Half Moon Bay Maximum San Mateo County 8/ Monterey Harbor 2 Up to $ 15.00 Fixed Fee 30 days Montel'e\' 15.000 lbs. /6 Months City of Montcrc\ 9' Balboa Yacht Club Reciprocal Varies on Varies N. A. $1.50 None Newport Beach occupancy Balboa Yacht Club ''liased on mud-poma of vessel length ranee. The information included in the table above is judged to be most comparable to the subject. Other harbors were surveyed and either do not currently have guest/transient moorings (Port of San Die(lo. Oceanside. Dana Point, Huntington Harbor. Alamitos Bav"Lon4u, Beach. L.A.. Marina del Rev. Channel Islands. Santa Barbara & Santa Cruz) or offer either Free y11LICSt'tranSlent moorings 9-31 Newport harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES (W an Open "cruisers-- anchorage (Port of San Diego. Mission Bay) with a 72-1101.11• time linlit. It Should be noted that all of the harbors that do not have guest/transient ]floorings offer guest slips rentals at a general rate between $1.00 and $1.50 per linear foot. Guestil'ransient mooring Comparable Rental One is the privately owned moorings that are administered by the City of Avalon and includes Avalon Harbor (257 moorings). Descanso Bay (47 moorings) and Hamilton Cove (36 moorings). All moorin0s in this area are privately owned and available on a Ulest/transient basis when the mooring owVner is not using the mooring. "elle mooring that is assloncd by the City is not guaranteed for any extended term and the vessel may iced to be relocated each day. The maxil1lUM term that a mooring may be Occupied is dependent Oil the 111001-illg o\yiler'S Use and no rnaxilllUm term was reported. fees arc payable in advance and oil the da\of dcpartUrC the mooring must be vacated by 9:00 a.m. I he daily Ices vary based Oil I0400t Increments and the price per linear Foot in the table IS calculated based oil the mid -point OI [lie range. It \\,as reported that there 1S no additional fee for a 1111.11ti-111.111 vessel but It \vas noted that not all moorings will accommodate a multi -hull vessel. It Should be noted that the City Of Avalon off-ers '`special rates" for moorings from September 15`x' to October 14`i' and Palm Sunday through .lune 15t1i (pay 4 nights, get next 3 consecutive nights free) and October 15"' thrOUG Palm Sunday (pay 2 nights get next 5 consecutive nights free). Comparable Rental Two and Comparable Rental 2a reflect the gueSCtransient mooring 1-ees for several coves surrounding Catalina Island that are owned and managed by the Catalina Island Company. 'There is a slight price difference based oil the location of the coves. There is a maximum consecutive stay of 2 weeks. "there is an on-line reservation system that includes a $25 bool:ulg fee during regular weekends that is added to the mooring fee and some holiday \\eekends (Memorial Day. 4"' of.fuly, Labor Day & Buccaneer Days) may incur an additional fee. Reservations require a two day stay during regular weekends and three days oil holiday weekends. f11e reservation sy°stem guarantees a mooring in a specific cove and opens at 10:00 p.m. oil 1 hlll'S&V until the lollowing Monday and may only be Used for the corning \veekelld. Like the ('l1CSt'tra11SlC1lt moorings in Avalon. the fees are broken do\vn 111 I046ot inci-cments and the price per Ililcar foot IS based on the mid -point ol�the range. The illanagclllent reported that they d0 not charge an additional fee for unllti-hull vessels. It was Further reported that even though they have a lot of traffic during the winter months they have a special rate bort Palm Sunday through early - .4111C that permits payment of two days and the next 5 consecutive days are Free. Comparable Rental Three is a group of mooring that are located bet\veen the Belmont Pier and Island \\`hitC in the outer Long Beach Harbor. The operator is a private company that has a permit to allow 75 �UIuest/transient Moorings. Mlle program commenced III the SLininler OI -'2014 and a total of 20 moorings have been installed. The moorings Will accommodate vessels between 30- and 12 9-32 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES 100 -feet and the daily rate is $1.00 per linear foot. They also offer a 3 hour daily rate of $20.00. The moorings are "single -point' moorings and the vessels swing with the wind and tides. It was reported that due to the sin(Zile-point mooring system. some multi -hull vessels are required to lease two moorings so the), do not croNvd other vessels in the mooring field. The nlaxiMLIM single stay IS 15 consecutive days Nvith a maximum of 156 days per year. Comparable Rental Four includes 50 gucst./translent mooringgs that are 111 King, IIarbor (Ptcdondo Beach) and were installed in 2014 by the City. They have three sizes that are rented on a fixed I'ce basis ($24.00. $30.00 & $36.00) and the price per linear foot that ranges from $0.65 to $0.72 based (111 the mid-range of each I 0-l'Oot increment. '['here is no additional charge 101' 1111.141-111.111 vessels lnd a 7 day maximL1111 stay. It was reported that the city has recently translcrl'ed the 111anage111ent from the City to a private company in anticipation that they will generate more interest from transient boaters. Nlorro Bay harbor is included as Comparable Rental Five and has three guest 'transient moorings that are city owned and rented for $0.28 per linear foot. with a minimum vessel length of 36 -feet. The city reports there is no maximum stay, with no amenities provided. There is no additional fee for multi -hull vessels: however, they have a $177 daily mooring fce for vessels" or those "requiring special accommodations". The Morro Bay Yacht Club (a volunteer run yacht club) has Six transient/guest moorings that are rented on a fixed fee basis that reflects a daily rate of $0.50 to $0.56 per linear foot. They have a maximum stay of 30 -days within any 6 -month period. They provide shower and restroom facilities that are included in the daily fee and provide access to their har ( Friday night). Comparable Rental Six includes approximately 20 gueSt/transient moorings that are owned and administered by the Port San Luis Harbor District. These moorings are available for a portion of the year and reportedly they are pulled during the winter months. They Nvill accommodate vessels up to 554eet and they are rented on a fixed fee of $16.00 per day. \with a maximum stay of 14 clays. It was reported that there is no additional fee for multi -hull vessels. The San Luis Yacht Club has an undisclosed number of moorings that are available to members of reciprocal yacht Clubs at a rate of $15.00 per day frorn April 1" through October 31 ". with a 14 -day rnaxllnunl stay. The moorings will accommodate vessels up to 56 -feet. Pillar Point l larbor is located in Half Moon Bay and included as Comparable Rental Seven. The 0uest transient moorings are administered by San Mateo County. There are 38 guest/transient moorings that will accommodate vessels up to 45-6eet. The daily fee is $11.00 regardless of tllc \ essel lenoth with no additional fee for multi -hull vessels. The fee includes access to coin-operated restroom and shower facilities. 13 9-33 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES Comparable Rental Eight is for the two guest! trans moorings that are located in the Last \loorine area in Monterey Harbor. 'file guest/transient moorings do not have a restriction on vessel length but is based on the vessel tonnage and thele is no difference in the fee charged for a 1111.11ti-111,111 vessel. The guestitransient moorings are rented oil a fixed fee basis of $15.00 per day and guest arc limited to a 111axill1L1111 Of 30 days within any 6 -month period. There is a $20 charge fol' a marina shower key. It was reported that the illoorino s in the Outer Harbor arca are all leased oil a loll` -term basis and there are no other auest/transient moorings. The Balboa Yacht Club is included as Comparable Rental Nine and rCICrS to the guest/transient moorings that are rented to members of yacht Clubs that have a reciprocal agreement Nvlth BYC and arc not offered to the general public. The Balboa Yacht Club has a total of 70 moorings in the basin in 1roni. Of the yacht Club that are rented to the membership: however. they of6er them oil a `guest. transient basis when they have a vacant mooring (if it is leased it is not offered as a OuCSt mooring even If the members vessel Is not Occupying the Mooring). The number and length of the gLICSt'transicnt moorings varies depending oil What is vacant and the fee is $1.50 per vessel luteal' Im and they do not Charge all additional fee for 1111.11ti-111.111 vessels. The guest/transient mooring ICC includes shore boat service. It was Noted that they do have **specials" with reciprocal Clubs that offer BYC members the same "special". \Vith regard to the comparable rental data presented. Comparable Rentals One and Two and Nine are judoed to be most comparable to Newport Harbor and Comparable Three is judged to be slightly inferior. Comparable Nine reflects guest/transient moorings in Newport harbor; however. they are limited to guests that are members Of reciprocal yacht Clubs and includes the use (Lor a Ice) of yacht Club facilities and defines the upper limit ($1.50/1-F) oftlle Fair Market Rental range. Comparable Rental Three has been operating for a limited time and the Outer Long Beach I Iarbor is not a well-known stop -over and is not as desirable as Newport Harbor and defines the lower limit ($1.00/1.,F) of the guest/transient mooring Fair Market Rent range. I hC 11Llcst/transicnt moorings at Catalina Island are Judged to be most similar to Newport Harbor alld most of"the OLlest/transient moorings are reportedly used by boatel's (('0111 Southern California. The rent per linear Im of vessel ranges from $1.11 per linear foot to $1.52 per linear foot. with most in the $1.20 to $130 per linear foot range. Comparable Rentals Three (juClged to be inferior) Gild Nine (1LICIocd to be Superior) bracket this range and suggest that the Wild -point of the rent per linear foot reflected by the Catalina guest/transient moorings is reflective ofthe current Fair Market Rent for the guest/transient moorings in Newport Harbor. On the basis of the market data presented above. and placing most emphasis on Data Items One. fxvo. Three and Nine. I have concluded that the guest/transient off=shore moorings (`'SLIb- 11cl-mits") located over City managed tidelands throughout Newport Ilarbor have a Fair i\flarket 14 9-34 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES Rental. as ol•Novenlber 27, 2017, of: $1.25 per (vessel) linear foot. adjusted annually by the change In the CPI. flee Citihas a limited number of "on-shore' moorings that can accommodate vessels up to 18- Icet in length. During the course of completing this assignment I did not Lincover any Other on- shore moorings that could be considered comparable in estimating the guest/transient rental rate. As of the date of�this appraisal report,. the City of Newport Beach charges and annual rate O1�$17.71 per linear for on-Shore moorings, which compares with a rate of $35.43 per linear foot by off-shore inoorin`g, permit holders. The mooring permit fee paid in Newport Harbor IOP all On-Shore moorino is 50.0 percent ($17.71 /LF -:- $35.43`11` 0.499) less that the fee paid for all 01'1=Shore mooi•lllg. Recoonizino the dearth of comparable on-shore mooring rentals. the limitations on vessel size between the on-shore and off-shore moorings and the fees being paid bN' mooring permit holders in Newport I larbor. I have concluded that guest/transient on-shore 111006110s ("Sub-Perilllts") have a Fair Market Rental', as of November 27, 2017. of. $0.625 per (vessel) linear foot, adjusted annually by the change in the CPI. Analysis - Guest/Transient Mooring - Multi-Hull "Premium" As set forth in the tables above, with the exception of Comparable Rental Three. none of the anchorages charge an additional fee for multi-hull vessels. It was noted that there are a limited number of moorings that can accommodate a multi-hull vessel and the parties interviewed indicated they do not have many requests for multi-hull vessels at guest/transient moorings. The Belmont Mooring Company (Comparable Rental 3) requires that multi-hull vessels rent two moorings if the vessel will crowd other vessels in the mooring Iielcl. The City of Avalon and the Catalina Island Company report that they have a limited number of moorings that will accommodate a Il1LIlt1-111.111 vessel and often they either turn them awav Or recommend that thev stav in the anchorage area. The City of Morro Bay (Rental 5) has a daily Ice of $177 for *"large vessels" or those that "require special accommodation".and while they, do not define are "lame vessel" they report a -large vessel' generally measures 100-plus feet. ASSllilllll`' a minimum vessel length of 100-feet, the large vessel fee is $1.77 per linear foot, as compared to $0.28 per linear foot for a standard vessel. In Los Angeles Harbor, Leeward Bay Marina (611 N. Henry Ford. Wilmington) has a floating docs: (110 utilities & dinghy access only) that is across the channel frons their main marina that accommodates both mono- and multi-hull vessels between 30' and 50'. The iloating docks is not available Oil a OUCSt/transient basis. but the lease rate for a 1110110-IILIII vessel is $7.00 per linear loot and the multi-hull vessel rate is $8.00 per linear foot. On a percentage basis, the multi-hull Ice reflects a -"premium" of 14.25-percent relative to a similar mono-hull fee. It should be noted that the long-term lease rate for their marina slips range frons $10.00 to $12.00 per linear foot. 15 9-35 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES A second marina in Los Angeles Harbor (Al Larson, Berth 258 1046 Seaside Avenue. San Pedro) reported that clue to an increased interest in multi -hull moorings thev are considering an increase in the month-to-month rate of $8.00 per linear foot that is charged t0 both n10110- and 1111.11t1 -hull Vessels. Santa Cruz Flarbor does not have guest/transient mooring; however. they do have a limited number elf (ILICSt'trallSlCllt slips and also require "rafting' to accommodate additional gLleStitransitlonal berthing on the end -ties. They charge $1.25 per linear foot for 1110110 -hulls up to 504eet and $1.50 per linear foot for all multi -hull vessels and mono -hulls over 50-1'eet. This reflects a "premium' OI 20 -percent sol' a 111Lilti-hull Vessel as compared to a similar size lllollo-hull. At Channel Islands I-farbor. the Peninsula Yacht Marina and the Bahia N/larllla calculate then' monthly slip Ices based on a weighted formula relating to the amount Of space used by a particular size slip and not upon the linear length of the slip recognizing that a longer vessel generally has a orcater beam, therefore, the larger the slip the higher the price per linear foot of slip space. The smallest slips with the narrowest beaus rent on a long-term basis in the $11.00 per linear foot range. while the larger slips with the widest beam are in the $16.50 per linear foot range. The higher price per linear Im also is due to a supply/demand imbalance for the larger slips, but reflects a prenliunl of 50 -percent for slips with a greater beam that require more tidelands space as a result ol'the \\ider beam. ()lie of the parties interviewed suggested that a "prenliunl" Could be based on a "Length -to -Beam" ratio. The ratio(s) would be established for the "typical" 1110110-IILIII Vessel. and 1110110-IILIII Vessels that Call \\ ithin this range are charged the "base" �"uest/transient mooring fee of $1.25 per linear loot (from above). Similar "Length-to-Bearn" Patios Would be established IOr 111L11t1-111.111 Vessels and. depending on the difference in the ratios. the multi -hull vessel is Charged a '`premium" above the "base" 4UIuest."transient mooring lee. For example purposes only. if the -typical" mono -hull "L,ength-to-Beam" ratio is 3:1 (30 foot length: 10 foot beam), and the "typical" nllllti-Illlll "ICllgth- to-beam ratio is 2:1 (30 foot length: 15 foot beam) the multi-Ilull is charged the '`base' fee Of $1.50 per linear foot. plus a $0.75 per linear foot ($1.50 x 0.50) "premium" as the beam Of the "multi - hull vessel is 50 -percent wider [(3 — 2) -:- 2] compared to the otherwise similar mono -hull. Since this IS based oil a "ratio" rather than the Vessel length. the ratios Could be applied t0 all Size Vessels. The market data suggests that multi -hull Vessels that occupy gL1CSt/transie It moorings are Charged a "pl'C1lliLlnl Ill a limited slumber ol'mooring fields — Belmont Mooring ( Rental 3) requires a multl- Illlll 0CCL1pV t\V(1 mooring (effectively a 100% prernit.1111) dile to the moorings being a single-po lilt nloorillu. and Morro Bay (Rental 5) charges a fixed "large vessel" Ice ($1 There is also e\ idence that some harbors charge a multi -111,111 "premium" for guest/transient slips between $0.25 16 9-36 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NET7ER & ASSOCIATES and $1.00 per linear foot (approximately 14.25- and 50 -percent) recognizing that a multi -hull Vessel occupies more tidelands relative to a similar length mono -hull vessel. Based on the limited data uncovered. I have concluded that a multi -hull y(,uest ranslent mooring lee "premium of between $0.25 and $0.50 per Linear foot of vessel length, depending on the beam of the multi -hull vessel, which is between 20 -percent and 40-perent of the Base OUest/transient mooring fee, is reflective of the Pair Market Rent "Premium". as of Novernber 27. 2017. ;\nalvsiS Guest/Transient Mooring — Lame Vessel With respect to the "Large Vessel" fee, the first step is to attempt to define what Constitutes a Vesscl". On the basis of the market research completed and the market data presented. the s. r.neral consensus is that a 100 -feet is the cutoff that defines a "large vessel". This section assumes that a "Iai•(—)e veSSCI" is a minimum of 100 lineal' feet and the Conclusion Set forth in this section apply to vessels 100 -feet or longer. ,'\s set forth in the tables above, guest/transient mooring fees for vessels that are 100+ linear feet Lit Catalina Island range from $1.45 to $1.52 per linear foot. and reflect the highest daily rate per linear foot of -'all the transient moorings at Catalina. At the mooring fields administered by the City of Avalon. the dally rate for a 100+ foot vessel is between $0.10 and $0.38 per linear foot higher compared to similar "standard length" guest/transient moorings. A generally similar "premium" ($0.12 to $0.27 per linear foot) is reflected in the rates at the mooring fields managed by the Catalina Island Company. The City of Morro Bay (Rental 5) has a daily fee of $177 for "large vessels' or those that "require special accommodation". They do not define a "large vessel but report that a '`large vessel" Ocnerally measures 100 -plus feet. AsSUrning a minimum vessel length of 100 -feet, the large vessel lee is $1.77 per linear foot. This compares with a rate of $0.28 per linear toot for a west/transient nloorin- that accommodates a "standard length" vessel, or a " prernit,1111 " ole $ 1.49 per Illleal' foot. It \\as noted that a portion ofthis lee 1S attributable to all "Inconvenience 1ee Lis the lar,,c vessels havc to be moored "end-to-end" in the middle of the anchorage due to the layout of the anchoraylc and accornmodatino this size vessel generally requires moving other vessels. Rainbo\\ Harbor In Long Beach is administered by the City of Long Beach Marine Bureau. As noted in the prior section they do not have moorings; however, they do have guest/transient docks and end -ties. The base guest/transient fee for a "standard length vessel is $1.25 per linear up to Q04cet. Hie lee for an end -tie that will accommodate a vessel that is over 90 linear feet is reported to be $315.00 per day. or $3.50 per linear foot. 17 9-37 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER S ASSOCIATES The limited market data to quantify the "large vessel- transient inooring Iee is summarized In the Iollo�ving table. For comparison purposes, the "standard" mooring fee per linear foot is included in the Summary table. LARGE VESSEL (100+ FEET) - GUEST/TRANSIENT MOORING FEE SUMMARY OCTOBER/NOVEMBER 2017 Location TV ie Length (LF) Total D.01y Rate Daily Rate S/LF Standard Vessel Daily Rate S/LF \valor M00611-100+ $149 S 1.41) S I . 11 —S 1.39 I sthmus Mooring M00611g100+ 100+ $14-5 $152 S 1.45 $I.52 S 1.70 - S 1.32 $1.25 - S 1.35 klorro l3m 1v1001111< 100+ $177 S1.77 S0.28 Lona Beach — Rainbow Harbor Slipr'Gnd-Tie 90+ 5315 53.50 $ 1.25 The three data items that are most comparable to the subject are Avalon and the Isthmus at Catalina Island and I\'lorro Bay, as they reflect the daily cost for a mooring as opposed to a slip or all end - tic. These three data items reflect a "Large Vessel" daily guest/transient mooring fee that equates to $1.49 to .$1.77 per lineal foot. On the basis of the market data presented above. I have concluded that the "Large Vessel" (100+ LF) guest/transient off -shore mooring fee. over City inanaped tidelands throughout Newport Harbor. has a Fair Market Rental. as of November 27, 2017. of: ` 1.55 per (\cssel) linear foot. adjusted annually by the change in the CPI. rialysls — fair Market "Booking Fee" his section of the report is to determine the "standard practice" for "booking fees' associated with the administrative costs of frequent renewals. The only source uncovered that reports chargino a "booking fee' or administrative fee associated Nvith guest/transient moorings is the Catalina Island Company, which charges a $25.00 booking lee oil weekends. No other marina. harbor or mooring field was uncovered that charges a lee for bookings or the administration associated with frequent renewals, therefore. I have concluded there is no "Standard Practice beyond the City's `'cost recovery" basis. VALUATION Based upon the work undertaken. and illy experience as a real estate analyst and appraiser. l have lormed the opinion, as of the 27`I' day of November 2017. subject to the Assumptions and Limiting Conditions contained in this report, that the guest/transient moorings in Newport Harbor have the lollowing Fair'c,larket Rental values: Daily I -air Market Rent for the Off -Shore GuestlTransient Moorings ("Sub -Permits S1.25 per Linear Foot of Vessel, adjusted annually based on the change in the CPI. 9-38 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES Daily I -air N/larket Rent for the On -Shote Guest7ransient Moorings ("Sub -Permits") I- 1"0.625 per Linear Foot of Vessel, adjusted annually based on the change in the CPI. DaIIN Fair N/larket Rent "Premium" for Multi-l-Iull Vessels on Guest Transient Moorings Between $0.25 per Linear Foot of Vessel and $0.50 per Linear Foot of Vessel, depending; on the beam of the multi -hull vessel, which is between 20- and 40 -Percent of the Base guest/transient mooring; fee, adjusted annually based on the change in the CPI. Dal IN Fair Market Rent for "Large Vessel" (100+ LF) Off -Shore Guest I-ransient 11looring S1.55 per Linear Foot of Vessel, adjusted annually based on the change in the CPI. "Standard Practice" associated with Fair Market "Booking Fee' for Guesti Transient Nloorincys I have concluded there is no "Standard practice" beyond the City's "cost recovery" basis 19 9-39 Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER & ASSOCIATES ADDENDA ?0 . ,f Newport Harbor Guest Moorings Newport Beach, California November 30, 2017 NETZER S ASSOCIATES Qualifications 9-41 QUALIFICATIONS of James B. Netzer, MAI Professional Background Prior to forming Netzer & Associates, he was associated for over three years with Urban Pacific Services Corp. Actively engaged as a real estate analyst, appraiser and consultant since 1987. Principal of the appraisal and consulting firm of Netzer & Associates with offices at: 170 E. Seventeenth Street, Suite 206 Costa Mesa, California 92627 Educational Activities Bachelor of Arts in Liberal Studies with a Concentration in Economics. California State University, Long Beach, 1986. I las successfully completed the following courses sponsored by the American Institute of Real Estate Appraisers and the Appraisal Institute: A.I.R.E.A Course IA -1: Principles of Real Estate Appraisal A.I.R.E.A Course lA-2: Basic Valuation Procedures A.I.R.E.A Course 1B -A: Capitalization Theory and Techniques, Part A A.I.R.E.A Course 1B -B: Capitalization Theory and Techniques, Part B A.I.R.E.A Course SPP: Standards of Professional Practice A.I. Course 2-1: Case Studies in Real Estate Valuation A.I. Course 540: Report Writing and Valuation Analysis A.I. Course 550: Advanced Applications Has successfully completed numerous classes and seminars to meet the continuing education requirements of Appraisal Institute, Office of Real Estate Appraisers and Department of Real Estate. Professional Affiliations & State Licenses Member of the Appraisal Institute - MAI Designation State of California - Certified General Real Estate Appraiser - Certificate No. AG003143 State of California - Real Estate Broker License - License No. 01185682 Court Qualification Qualified as an expert witness in the Superior Courts of Orange, Los Angeles and San Diego Counties, U.S. Bankruptcy Court -- Los Angeles Division. Teaching Experience Orange Coast College - Adjunct Professor (retired) - Business 140 "Real Estate Appraisal Principles" 9-42 Seminar & Panel Presentations Los Angeles County Bar Association — Real Property Division: Overholt.-er Overhauled, 4n t judale oa Damages, Appraisals and Interim Loss under Title Insurance Policies, September 2013 Scope of Experience During the period in which Mr. Netzer has been engaged as a real estate appraiser and analyst, lie has been involved in most aspects of the field having completed assignments for multiple purposes, including: estate planning; bankruptcy; conflict-of-interest analysis (Political Reform Act of 1974 construction defects litigation; soil subsidence; dissolution of marria-e..:round lease re -valuation: leasehold & sub -leasehold valuation: property tax appeals; lease and ground lease arbitration: easelnentaccess/encroaclinient/title disputes (based on Oherhollzer r. Xorlhern Counties Title); soils contamination litigation; mortgage lending; construction financing; portfolio valuation: market and Ieaslblllty analvsls; fractional interest valuation; and, due diligence. Ile has experience appraising the following property types: Vacant Land Residential lots. sub -division sites, condominium sites, commercial and industrial sites, mountainous acreage, raw acreage, mitigation land (Delhi Sands Plower Loving Fly, Stephens Itangaroo Rat & Open Space). iZesldentlal Single-family residences, condominiums, townhornes, planned unit developments, multi -family units, apartment buildings, mobile home parks, proposed and existing sub -divisions. Commercial 011 -ice buildings, medical office buildings, restaurant buildings, retail centers, neighborhood shopping centers. C0111111LI111ty centers, commerce centers, congregate care facilities, parking structures, golf courses. mixed-use developments, auto dealerships. gas stations. Industrial Manufacturing and warehouse buildings, distribution facilities, multi -tenant buildings, mini-storaoc facilities. ` Special Use C:'omrnercial and residential tidelands, boat harbors, auto ferry, bait barge. marina, gas docks, mooring fields, commercial piers, civic center, fire stations, police stations, emergency coniniunication facilities. temporary construction easements, steel fabricating plant, car wash facilities. Public Service Nel4port Aquatic Center, Newport Beach - Board of Directors - Chairman, Facilities Committee 9-43 PARTIAL LIST OF CLIENTS ATTORNEYS. I,AW FIRMS & ACCOUNTANTS GE Capital Investment Advisors Barton KILIglllall & OCttlllg Lyllberg & Watkins Boss Law Firm APLC Manning & Kass. Ellrod, Ramirez_, ,rrester Browne & Woods LLP McDermott, Will & Enlory Bryan Cave LLP Law Offices of Erik B. Michelsen Burd & Naylor Millar, Hodges & Benlis Davis Law APC Palmieri, Tyler, Wiener, Wilhelm & Waldron Gibson. Dunn & CRItchel' Richard Shaffer (Court Appointed Receiver) Goldstein & Ward Rubin & Eagan Greines, Martin. Stein & Richland LLC Samuels, Green & Steel, LLP Harbin & McCarron Severson & Werson Hart, King & Coldren Shulman BUI111 LLP .Ieffer. Mangels, Butler & Marmaro LLP Sonastad, Randall, Coffee & HU111ph1-Cy Landels, Ripley & Diamond Stradling, Yocca, Carlson & Rauth Larsen & Associates Turner & Reynolds Latham & Watkins Richard Wildman. Attorney at Law Leech & Associates Wolf & Richards Law Offices of Michael Leight Wright Ford Browning & Young Loeb & Loeb, LLC Wynne, Spiegel & Itkin LENDING INSTITUTIONS Bank Midwest, N.A. GE Capital Investment Advisors Bank of America Hawthorne Savings Bankers Mutual (Berkshire Mortgage) I-iuntinaton National Bank California Federal Bank Merrill Lynch Credit Corporation Citicorp Real Estate, Inc. Park View Mort -a -c Credit Suisse Strategic Mortgage Services Comerica Bank Tokai Bank Escondido National Bank Wells Fargo Bank GOVERNMENTAL AGENCIES City of Costa Mesa Federal Deposit Insurance Corporation (FDIC) City of Glendora Orange County- Dana Point Harbor City of Huntington Beach Resolution Trust Corporation (RTC) City of Lona Beach Tidelands CID Securities & Exchange Commission (SEC) City of Newport Beach GENERAL CLIENTS AMRESCO Management, Inc. Newport Sports Collection Foundation Arnold C011STI'LIM011 North American fltle Insurance Company, The Boy's Republic O.C. Interfaith Shelter Capital Guardian Trust Old Republic Title Chicago Title Company Pulte Home Corporation Continental Mobile I lousing S & A Properties Decron Management S & S Construction Shappell Industries Environmental Nature Center St. Clair Company LLC Fidelity National Title Santa Fe Pacific Pipeline Partners, L.P. First American Title Insurance Simplex Realty Hamilton Conlpalll Staples. Inc. I-leritage Point Senior Living State Farm Insurance I lornblowcr Cruises Stewart Title Guaranty Company Kinder Morgan Energy Partners Texaco Refining & Marketing, Inc. I .cc & Associates Westcor Land `title Insurance Company Western National Properties NETZER & ASSOCIATES Ileal ('.state Appraisal & Consulting March 26, 2018 Addendum to File No. 2017-030 Lauren Wooding Whitlinger Real Property Administrator City of Newport Beach. Community Development Department 100 Civic Center Drive Newport Beach. CA 92660 Re: Appraisal Services Fair Market Rent Marina Park - Guest/Transient Slips Dear Ms. Wooding Whitlinger: In accordance Nvith your request and authorization, I have completed the research and analysis to estimate the Current Fair Market Rent for the following use of City Tidelands: 1) Daily rate of Guest Slips at Marina Park and approximately 250 -foot dock; 2) Monthly Dinghy Storage Space rent at Marina Park, and, 3) Daily "Guest Mooring Rate" for mooring on private (Non -City owned) tackle. This letter is an Addendum to my Appraisal Report dated November 30, 2017 that is identified as Netzer & Associates File No. 2017-030. My November 30, 2017 report should be read in co►ijunction with this Addenda and the definitions, Assumptions and Limiting Conditions and property identification set forth in my November 30, 2017 Appraisal Report are not included in this Addenda but are specifically incorporated into, and applicable to, this Addenda. The Addenda contains a total of 14 pages and has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP) and is subject to the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. This is an Addenda to an Appraisal Report as described in USPAP Standards Rule 2-2. This Addenda to my Appraisal Report was requested by Lauren Wooding Whitlinger, on behalf of the City of Newport Beach, who is the client and intended user of this Addenda to my Appraisal Report dated November 30, 2017. In the event that this matter proceeds to trial or other oovernmental or administrative hearing, the Trier -of -Fact will become an intended user. Date of Value My research and analysis was completed on March 26, 2018, which is the date of value presented in this Addenda. Guest Slips at Marina Park — Fair Market Rent The City ofNexvport offers slips at Marina Park for "guest" or "transient" use on a "per day' basis. with a ma\lmum stay of 30 -days. The guest/transient slips are 40 -feet and 55 -feet, with an additional dock that provides approximately 250 -feet of side -ties. Guest amenities include portable pump -out facilities, laundry facilities, restroom and shower facilities, potable water. electrical service (30 & 50 amps), free Wi-Fi and access to Marina Park's beach, playground, picnic areas and parking lot. The current fees are based on the slip length and are $60 per day 110 I Seventeenth Strut. Suitc 206 ♦ Costa Mesa. CA 92627 ♦ Phone (949) 631-6799 ♦ FAX (949) 631-4631 9-45 Lauren \Vooding W'hitlmger Vlarch 26. 2018 Ipaoc 2 (1:00 p.m. to 11:00 a.m.) for a 40 -foot slip and $82.50 per day for 55 -foot slip, with a $1.50 per loot "overhang)" charge. In March 2018 1 conducted a survey of several public and private marinas From San Dicoo to 1-lalf Moon Bay, the table below and on the following pages is a summary of my guest slip rent survey. GUEST/TRANSIENT SLIP RENT SURVEY SUMMARY MARCH 2018 Data No. Slip Sire Slip Rent S/Ni Iht Slips $/Linear Foot $/Slip Name(Municipal/Private) Range Total # Maximum Location (Linear Feet) (vessel length) (fixed fee) Guest # Stay Marina Part: (M) 40' -- $60.00 23 1600 N1. Balboa Boulevard j_5' -- S82.50 23 30 days New ort Beach Overhang $1.50 -- +Side Tie Il Bayshore Marina (11) 20' - 83' 1, $5.00 -- 134 5 day 2572 Bayshore Drive Slips, end -ties None, minimum Newport Beach & side -ties vacant slips I -A/ Villa Cove Marina (P) 20' - 66' $5.00 -- 40 5 day 1099 Bayside Drivee Slips, end -ties None, 1111111111LI111 Newport Beach & side -ties vacant slips 1-13/ Baysicic Marina (P) 20' - 74' $5.00 -- 101 5 clay 1 137 Bayside Drive Slips & end- None, Ill i11iIll uIll Newport Beach ties vacant slips 1-C/ Balboa Marina (P) 20' - 100' $5.00 -- 105 5 day 201 1-7. Coast 1-lighway Slips & end- None, minimum Newport Beach ties vacant slips 2/ Harbor Patrol (M) 40' SI.00 -- 3 N. A. 1901 Bayside Drive Slips 3 Newport Beach American Legion (P) Up to 81' $1.00 -- 48 3 days 215 15'x' Street Side -tie None Newport Beach 4/ Newport Dunes (P) Under 3l' -- $65.00 450 3 clays 101 N Bayside Drive 32' - 37' -- $75.00 4+ vacant Newport Beach 38'& over -- $85.00 slips Slips 5/ Lido Yacht Anchorage (P) 15' - 135' $5.00 -- 251 30 days 151 Shipyard Way Slips None, Newport Beach vacant slips • e Lauren NlOoding Whitlinger March 26. 2018 Page 3 GUEST/TRANSIENT SLIP RENT SURVEY SUMMARY (cont.) MARCH 2018 Data No. Slip Size Slip Rent $/Ni 7ht Slips Name (Municipal/Private) Range $/Linear Foot $/Slip Total # Maximum Location (Linear Feet) (vessel len ith) (fixed fee) Guest # Stay 6 Peter L-illdim-, (11) 31' - 96' $1.00 - 325 N.A. 16400 Pacilic Coast I Iwy. Slips None. vacant Iluntincton l3cach slips 7/ Sunset Aquatic Park (P) 20' - 60' $1.00 N.Av. No 2901-A I-dinuer Avenue Slips None, vacant maxinlunl Huntington Beach slips 8.` Dana Point Marina (P) 25' - 75' Under 45' $1.10 -- +1,200 30 days 34555 Casitas Place Slips & end- Over 45` $1.20 44 Dana Point ties 9/ Oceanside Harbor (M) 20' - 50' $1.20 (Apr.- -- +950 30 dais 1540 I (arbor Dr. North Slips & side- Sept.) -- 24+ side Oceanside ties $0.80 (Oct.- ties may) 10;' Harbor Island West (P) 25' - 100' Over 50' $1.50 Up to 32' $35 600 N.A. 2040 Harbor Island Drive Slips 33'-38' $45 None, vacant San Die,—,o 39'-43' $60 slips I lI Port ol'San Diego (M) Up to 65' $1.00 -- 30 15 days In 1401 Shelter Island Drive Slips 25 40 day San Die,—,o period 12/ Alamitos Bay (M) Up to 100' $1.25 -- 1,624 15 days 204 N. Marina Drive End -tie None, end- per month Lone Beach ties 12-A' Shoreline Marina (M) 30' - 60' $1.25 -- 1.764 15 days 450 1_. Shoreline Drive Slips $3.00 during None, vacant per month Lon—, Beach special events slips 12-13; Rainbow I larbor (M) 30' - 180' $1.25 -- 87 15 days 300-B Aquarium Way $6.00 during None, vacant per month I_on`u Beach 90' & over special events $370 slips _SI!PS__ 13 131.111011 Chace Park (M) 8' - 50' $1.25 - 45 + side 7 dais Pei- er13650 136.50Mindanao Way Slips &. side ties 30 days Marina del lzev ties All 9-47 Lauren Wooding Whitlinger March 26. 2018 Page 4 GUEST/TRANSIENT SLIP RENT SURVEY SUMMARY (cont.) MARCH 2018 t Data No. Slip Size S!!Rent S/Night Slips Name (Municipal/Private) Range S/Linear Foot S/Slip Total # Maximum Location (Lineal Feet) (vessel len ►th) (fixed fee) Guest # Stay Id/ i Ding Harbor Marina (P) 20 '- 80' -- Under 28' $20 No longer 2 months 208 Yacht Club Way Slips 28'-3S $30 offer guest Redondo Beach 36-44° $40 slips 44+S50 15/ Channel Island (M) 25'+- $1.3-5 -- 34 N.A. 132-A Harbor Way Slips 34 Oxnard 16/ Ventura West Marina (P) 20'-80' $1.50 -- 554 No, offers 1 198 Navigator Road Slips None, vacant monthly Ventura slips rate For 2 week stay 17/ Santa Barbara (M) 20'-100' Days 1-14 n -- 1.143 14 days, 132-A Harbor Way Slips & side $1.00 -- None, vacant 28 w/14M Santa Barbara ties Days 15-28 @ slips permission $2.00 18/ Monterey Marina (M) 20'- 50' -- Summer/Winter 413 N.A. Figueroa Street Side -ties w/ 20' $14/$13 None, side - Monterey no utilities 25' ties @ K Tier -- $17.50/$16.25 30' $21 /$19.50 35' $24.50/$22.75 40' $28526 Santa Cruz Harbor (M) 24'-60' $1.25 mono -- +1,200 2 weeks. 135 W. 5'f' Street Slips & end- $35.00 min. None, vacant extensions Santa Cruz ties $1.50 milli -- slips & end- w/ 1 -IM $45.00 min. ties approval 20 Pillar Point (M) 30'-65' $0.77 -- 154 N.A. I Johnson Pier Slips & end- Multi -hull (rr) -- Recreational Half1\10011 Bav tics 1500,0 None, vacant slips Discussion and Analysis The servey data includes both municipal and private marinas between San Diego and Half Moon Bay. rhe guest/transitory slips are rented on a daily basis either based on a price per linear foot of the ureater of the vessel or the slip length, or on a "fixed" basis based on the slip size that will accommodate a range in vessel lengths. In general. they all provide electric service, potable water. 9-48 Lauren Wooding Whitlinger March 26.2018 Page 5 restroom and Shower facilities. Some of the marinas have a *'dedicated" number of guest slips. \while it IS more prevalent that they offer their vacant slips to guests. Most have a maximum term that the gLICSt Is permitted to stay. or charge a higher fee for a Stay in excess of the maxin-iu 1, when approved and permitted by the Harbormaster. in oencral. the guest/transitory slip fees are similar between municipal and private operators as they ol'fer �lienerally similar services and amenities and are competing for the same market segment. In Some harbors. the private marina operators do not have '`dedicated" guest slips and they offer ;lips on it transitory basis only when they have vacant slips and they charge a premium as this is more o1 ail accommodation as opposed to it hill time service. In some harbors (Channel Islands Cls all CXai11i)IC). the Opposite is trite as the municipal guest slips (Rental 1 J) are olfiered at a Slightly higher rate ($1.35/1-1') as compared to similar private marinas (Bahia Marina & Pellinsula YLICIlt Marina. not Included in SLICVei') that charge $1.00 per linear foot. Oil the basis of the lllarket data uncovered, it would appear that with a few exceptions the municipal and private marinas charge guest/transient slip fees that are judged to reflect "market rent'. Comparable One through One -C are located in Newport Harbor and are private marinas that are owned and operated by California Recreation Company (a division of The Irvine Company). They offer electrical service (20-. 30- & 50 -amps), pump outs (Balboa & Bayside), restrooms, telephone cable hookups. lice parking, dock boxes and the concrete piers and docks are modern and in good condition. Overall they reflect a similar level of amenities as Marina Park and are proximate to upland services. They do not have any dedicated guest slips but will rent a vacant slip on a transitory basis with a five day minimum at a reported rate of $5.00 per linear foot. Tile four California Recreation marinas cater to long-term tenants and are currently experiencing a combined occupancy in excess of 97 -percent (6 slips, 4 side -ties & 1 end -tie) as of the date of this surrey. Ctu-rcntly, they charge a signilicant premium for guest/transient slips more as an accommodation and the rate reflects that they are not set up to administer guest/transient slip rentals. Comparable Two reflects the County Harbor Patrol dock, which has three dedicated guest Slips. The slips \vill accommodate vessels up to 40 -feet and the slips rent for $40.00 per night, regardless of the vessel Size. Tile maximum stay is 30 days and from November thru April guests must Sleep on the vessel. The overall facilities provided (pL1mp-01.1t, electric. water. shower & restrooms) are slightly inferior to Marina Park and the proximity relative to upland services is judged to be inferior. Comparable Three is a side -tie that can accommodate a vessel up to 814eet. It is located adjacent to N/ki lila Parti at the American Legion Marina. which has a total of 43 -slips. There are no dedicated Slips. the gLlest must be a member of the American Legion and the maximum Stay IS limited to three days. They provide restrooms, water, showers, electricity and parking with generally similar access to upland services. Overall this comparable is judged to be inferior to the subject. It should be noted that they charge $50.00 per month for storage on the dinghy rack, with a illaxill1L1111 length of9-Feet. Comparable Four is the privately owned Newport Dunes. which is located in the Upper Newport Bav (Back Bav) behind the Coast Hiollway Bridge. The 450 -space marina has four dedicated guest slips and they offer vacant slips on a transient basis with a 30 -day advance notice. The daily 9-49 Lauren Wooding Whitlincer March 26. 2018 Page 6 rate is based on the slip size and arc rented on a fixed basis regardless of the vessel length as lone as the slip will accommodate the vessel (a 32'-37' slip will accommodate a similar length vessel). When looked at on a rent per linear foot. the fixed rates equate to $2.10 per foot ($65.00 -:- 31.') $2.03 per foot ($75 -:- 37') and $2.24 (and less) per foot ($85.00 -:- 38'). respectively. They offer it sii�-htly superior amenity packa�pe (electricity. restroorns. showers. pUrnp-01.11. laLllldry. 1Ja1'kllly?. pool. laCLIZA. Clubhouse with kitchen) \\ Ith slightly inferior access 1.0 upland services. They have dinghy racks that rent for $25.00 per month and stand-up paddlcboard racks (SUP) that rent for $35.00 per 111011th. Comparable Five is the Lido Yacht Anchorage. which is privately owned. The 251 slip marina does not have any dedicated guest slips and offers vacant slips t0 guests at a rate of $5.00 per linear I60t. The IllaSinll1111 stay is based Oil the amount of tlille the slip Is vacant. They provide a similar amenity package and are proximate to upland services. Like California Recreation, this private marina is experiencing high Occupancy and reportedly do not actively offer guest/transitory slips, rather they ol'fer them as an accommodation and charge a premium. Comparable Six is located in Huntington Harbor and is privately owned. Huntington Harbor is behind the Coast Highway Bridge, which limits the height of vessels that can access the harbor. especially sailboats that generally have to lower their mast. -Tile 325 slip Peter's Landing marina does not have dedicated guest slips and offers their vacant slips to guests. It was reported that they fTenerally have 10 slips available for guest use. with a reservation. The rental rate is $1.00 per I lllcar 1001 \Vlth a illlllil111.1111 Illghtl)' charge o1-'$' 0.00. They ol�fei• a sllliilar amenit)' packa��e (pL1111p- OLIt. 30- & 50-arnp electric. restroorn. Showers, laundry & parking) and the marina is proximate to upland services. "There is no established maximum stay and no municipal guest slips/moorings. Comparable Seven is the privately owned Sunset Aquatic Park marina that is behind the Coast i-ligllway Bridge in Huntington Harbor. There are no dedicated guest slips and the vacant slips are offered to guests at a rate of $1.00 per linear foot. with a $25.00 per night minimum. The amenity packape (laundry. restl'oonls. showers. 30- and 50-arnp electric. pump -out, park) is relatively similar to tllC Subject: however, it is somewhat removed from upland services. It was noted that most " gLlest slips are rented by people that store their vessels in their dry -storage facility and want to leave it in the water for more than one day. Comparable Eight is the privately owned Dana Point Marina \with approximately 1.200 slips that includes 44 dedicated guest slips. The slip rates per linear foot are $1.10 for vessels under 45 -feet in len-th and $1.20 for vessels over 45 -feet. There is a 30 day maximum term during the season with a 90 -day term permitted in the off-season. Reservations are accepted up to 180 -days in advance. There is a silllllar arnelllt)' package that includes. water and electrical service. restroorns. showers. colli -op laundry. and pump -out facility and the Illarina IS prOxllllatc t0 Upland services. There are no municipal guest slips in Dana Point Harbor. Comparable Nine refers to the guest slips in Oceanside Harbor that is operated by the city of Oceanside. They have a total of 950 slips and 24 are dedicated guest slips plus side -ties. The rate is $1.20 per linear foot (vessel) from April through September and $0.80 per linear foot from October throuoh May. They have linlited space on dinghy racks that rent for $5.00 per month for slip permittees and $78 for 6 -months for non -permittees. They have a slightly inferior to similar a111C111t�' packa`.te (clectricily. \Vater. pLlnlp-OLU, laundry. sI10\\'el'S cti I'CS11'OOI11S) and they- are 9-50 Lauren Wooding Whitlinger March 26. 2018 Page 7 Sonlcwhat isolated 11.0111 upland services Comparable Ten is located in San Die o Harbor and is a privately owned 600 slip marina. "('here are no dedicated guest slips but the vacant slips are offered to guests. The fee for slips up to 32- 1cet is a flat $35 ($1.09/LF). $45 Por slips between 33- and 33-Icet ($1.13/LF) and $60 For slips between 39- and 42 -Feet ($1.40/LF) and $1.50 per linear foot for vessels 50 -feet and over. With the exception of holiday weekends (Memorial Day. Labor Day & 4°i of July) the maximum stay is based on the time that a slip is vacant. The amenity package includes pool. spa. sauna. restroom. showers. laundry IaCilltieS. pLlnlp-out. parking and Wi-Fi. which are similar to the subiect. The location is similar in terms of access to upland services. The owner of this marina owns other marinas in tia11 DiCOO. Dana Point (no OLICSt slips) and VCI1tLIra. Comparable Eleven is the OLlest clock that is operated by the San Diego Port District. They have 30 slips at the Port Police Station and 25 are reserved for gLlests. The slips are rented for $1.00 per linear foot of vessel for a maximum of 15 -days in a 40 -day period. The slips will accommodate vessels up to 65 -feet and those over 65 -feet can moor in one of the Port's anchorages. They offer 30 -amp power, potable water. restroonls and showers and they are located in close proximity to upland services. Comparable Twelve, Tivelve-A and Twelve -B are located in Alamitos Bay and Lone Beach Harbor and arc operated by the City of Long Beach. The city offers vacant slips to guests as they do not have dedicated guest slips. The slips all have a maxinuull term of 15 days and are rented for $1.25 per linear foot with the exception of the slips over 90 -feet that are in Rainbow Harbor that are rented on a fixed fee basis of $370 per night (maximum of $4.1 ULF). It was reported that the rates for guest slips in Shoreline Marina are increased to $3.00 per linear foot during special events (Lona Beach Grand Prix. etc... ) and slips in Rainbow Harbor are increased to $6.00 per linear foot during these events. All three marinas have locations that are proximate to upland services. Alamitos Bay is undergoing an approximately $150 -million renovation includlilo the replacements of docks. Piers. slips and the marina infrastRIClui'e. The amenity package at each marina IIICILIdeS parking, pump -opts, restroorns, and showers and are slightly inferior to Marina Palk. Comparable Thirteen is the guest dock that is located in Marina del Rey and is operated by the County. 'there are 45 slips and additional side ties that rent for $1.25 per linear foot with a maximum 7 -day stay during any 30 -days. They offer 30-anlp power, potable water. restroonls and showers at a municipal park (Burton Chace Park) and upland services are available throughout Marina clel Rev. "]'his comparable represents the only municipal guest slips in Marina del Rev_ and Illost Of the private marinas cater to long-terri-i occupants. Comparable Fourteen is provided for informational purposes only as the marina reported they recentl\ discontinued offering guest slips due to the demand for long-term occupancy. Comparable Fifteen refers to the 34 guest slips in Channel Islands Harbor that are offered by Ventura t_'ounty. "File slips are rented For a maximum of 10 -days at a rate of $1.35 per linear foot. With Harbormaster approval (Subject to insurance requirements) they will extend the term beyond 10 -days at a rate of $1.60 per linear Ioot. It was reported that the Fees were recently increased front $1.30/$1.50 per linear foot and the web -site has not been updated. 'Che municipal rates 9-51 LaLII-CII \Voodino Whitlin�ger March 26. 2018 Paoe 8 compare with t\vo private marinas in Channel Islands I larbor that offer guest slips at $1.00 per Illleal• loot. per night. The overall amenity package and access to upland services is judged to be slightly inferior to relatively similar compared to the subject. Comparable Sixteen is a privately operated marina in VCntura I larbor that has 554 slips. but none Are cfeclieated UILICSt Slips. It \vas reported they are full but CIO offer vacant slips to guests \\,hell the\, arc awaHal l-hc guest rate is $1.50 per linear foot for the first t\vcl-\veela. I or stays over two \weeks thew Oflcr the monthly fate and charge a live -aboard Ice of'$200 for 1 person and $250 161* two people. 1 -hey hal\'C dlllghy Packs that rent fol' $20.00 per month. file marina and faCllltlCS \Were reillodelcd Ill 2010 and Overall alllenity package Includes electrical service. restroorns (3 Sets). laundry. pump -outs, parking. and a guest lounge (T.V., sitting area, bar. kitchenette), work Out room. and is comparable to the subject. Comparable Seventeen is the Santa Barbara Harbor that is operated by the City of Santa Barbara. I hey have 1.143 slips: however. none are dedicated west slips. They offer slips and side -ties \\,lien tile\, are available and the harbor has good access to upland services. The rental rate is $1.00 per linear loot for the first 14 days. With I-1arborrnastcr authorization, guests call extend Up to 28 days at a fate ol�$2.00 per lineal- foot for days 15 through 28. If a guest leaves for five consecutive days the "clock starts over' at the lover rate. There is potable \nater and electric service included in the rent: however. a card key ($7.00) or FOB key ($12.00) must be purchased to use the restroom and show-cr facilities and the vated access to the piers Tor the term of- your stay. Commercial fishing boats are charged $0.75 per linear Foot for transitory slips. 1.y published report indicates the Ilarbor Commission has approved all increase to $1.50 per lineal- foot for vessels over 70-1'eet: however. it has not be implemented as ofthe date ol`thls survey. Comparable Eighteen are the "Llest side -ties located in Monterey Ilarbor. which IS operated by the Clty. I lie harbor Includes a total 01'413 slips and none are dedicated to guests. Che only `Quest accommodations are the side -ties located oil the K -Tier that accommodate vessels from 20- to 50- 1eet. 'there are no utility services. The amenities include restrooms, coin-operated laundry, showers and are judged to be inferior compared to the subject. The guest fees are higher in the SUIlliner as compared t0 the whiter and range from $ 1 3-SUrnmer1'$ 14 -winter I6r a 2046ot side -tie to $26 $28 Im- a 4046ot side -tic. They charge a quarterly lee of $72 I -or dinghy rack storage. Comparable Nineteen is operated by Santa CUIZ County with approximately 1,200 slips and end - ties. there are nO dedicated guest slips and vacant slips are offered on a transitory basis with a Illa\Illllllll stay of two weeks. The guest rate is $1.25 per linear foot for 1110110 -hulls with a IlllllllllLl111 fce ol'$35.00 per night. The rate for a multi -hull vessel is $1.50 per linear foot with a 111 1 11 1 111 11 117 fee of $45.00 per night. They offer 20 & 30 -amp power and potable water. There is a $10.00 Iec for a key to access the showers. Depending oil availability, the Ilarbormaster may grant an c\tended term at a fate of $2.00 linear foot. with a millllllum of $56.00 per night. fransitory commercial vessels are charged $0.75 per Illleal• loot. with a $30.00 minimum. Overall the amenities and access LO upland services is Ridged to be Illferlor colllparCLI to file SUblect. Comparable Twenty is the Pillar Point Ilarbor that Is located 111 Half Moon Bay and operated b\ San Mateo Count)'. "There are 154 recreational slips and end -ties and none Of them are dedicated to guest use. \Vhen available thcv are offered to guests at a rate of $0.77 per lineal foot for nlono- hulls and the n7ulti-hull lee is the moll0-111.111 rate tinges 150 -percent ($0.77 x 1.50 - $1.16 LF). 9-52 Lauren Woodinu Whitlinaer March 26, 2018 Page 9 There is no maximum term. They provide restrooms. showers. pump -out and laundry facilities. 'The amenity package and access to upland services are inferior compared to the subject. The rental data set forth in the table on the previous pages reflects a range from $0.77 per linear foot to $5.00 per linear foot for guest. or transient. slip rentals. The data that is most applicable to Marina Park is located in Newport Harbor and becomes less applicable the less proximate the location: however. they are supportive of the conclusions presented. in general, all of the marinas offer a similar amenity package: however. the marinas are all well maintained but are generally older than. and not as modern as. Marina Park. In the Iinal analysis. the data From Newport Harbor are given the priniary emphasis. These nlarlilas rellect rates Ir(lm $1.00 per linear loot (No. 2 Harbor Patrol &C No. 3 American Legion) to $5.00 per linear toot (Nos. 1. i -A. 1-13 &, 1-C & No. 5). The Harbor Patrol (municipal) and American Legion (member's only) are judged to be less desirable in terms of physical characteristics and amenities when compared to Marina Park. The subject has very good access to upland services including. but not limited to, dining, shopping and marine services in and around McFadden Square. Lido Village and the Rhine Channel. Tile Comparable Rentals at the upper end ($5.00/LF) are privately owned marinas that do not maintain dedicated guest slips and, while generally similar in terms of amenities and overall physical characteristics. cater to long-term renters and they "offer" �11ucst/translent slips as an accommodation when tllev have vacancy and charge a siunilicant premium as they are not set up to administer guest/transient slip rentals. Comparable Dour is the Newport Dunes Marina that charges a "fixed'' fee for their various slips lengths. however. when analyzed on a price per linear foot they reflect a range from $2.03 to $2.24 per linear foot. This marina is privately owned, has a similar park -like setting and generally similar amenities. but is located behind the Coast Highway Bridge. The location behind the Coast Highway Bridge is not as desirable as Marina Park as most sailboats and many power boats that have towers are not able to navigate under the Coast Highway Bridge. Placing most emphasis on Comparable Rental Four. I have concluded that the subject guest slips have a current fair market rent of $2.00 per linear foot. This figure can be applied to either the vessel length. which is most applicable to the 250 -feet of side ties and the conclusion of $2.00 per linear foot. it is also applicable to the slip length when charging based on a fixed slip length and to the "overhang" fee for vessels that extend beyond the length of a 40- or 55 -foot slip. The total nightly Fair Market Rent Ior the Guest Slips at Nlarina Park on a "fixed fee"basis. as of March 26. 2018. then. is calculated as follows: 40 -Foot Slip @ $2.00/1-inear Foot: $$0.00/Night 55 -Foot Slip tr $2.00/Linear Foot: $1 10.00/Night Most of the marinas, both private and municipal, have a maximum stay that generally ranges from 3 -days to 30 -days. The municipal marinas all have a mechanism that permits longer stays. with Harbor Master permission and proof' of insurance. One private marina (Dana Point) offers stays LIP to 90 -days in the "off-scason". Depending on demand. establishing the protocol to permit lonzer-term stays. especially during the "oft -season'* is recommended. 9-53 Lauren Wooding Whitlinger tMarch 26. ?018 Parc 10 Monthly Dingy Storage at Marina Park Fair Market Rent The City oh Newport Beach has fot_u• dinghy racks at Marina Park and two at the Balboa Yacht Basin. Each rack at Marina Park can accommodate three dinghies with a total capacity of 12 dinghies. with a total of eight at the Balboa Yacht Basin. The monthly fee is $25.00 and there is Currently a \ylit list. The I01111winu Is a sull mart' oI the -Cir)'- dlllglly Storage fees unCo\'Cl-CCI Ill file Sllr\Vey al -Ca. It Should bC noted. that some of till' inarinas that offer off -shore moorings have docks/plers that permit -'dinghy ties" (San Diego Mooring Company R Ventura West Marina as examples): however. they arc not included in the survcv. Location Monthly Fee Comment Marina Park $25.00 12 spaces. wait list Balboa Yacht Basis $25.00 8 spaces. wait list American Legion$50.00 Members onl\. nest to Marina Park Newpon Dunes $25.00 $35.00 Dinghy Rack SUP Rack Lido IsIc Comm. Assoc. (Residents onhv) $ 12.50 $18.83 $46.25 Kavak/Sabot Dry Storage (rack) Sabot Dry Storage (ground) 14'/15' Boat Dry Storage (round) Oceanside $5.00 $13.00 Slip permittee $78/6 -months for non -permittee Monterey $24.00 Dinghy rack Santa Cruz $55.46 Includes parking permit On the basis ofthe rental data uncovered. I have concluded that the individual spaces in the dinghy raCkS It Marina Park and the Balboa Yacht Basis have a Fair Market Relit. as of March 26. 201 S. 017$35.00 per month. Dailv "Guest Anchorage Rate" ofNon-City owned Tackle The City of Newport olTers moorings throughout the harbor that include City owned mooring tackle and are rented either oil a monthly or guest/transitory (daily) basis. The City desires to set Lip a "large vessel area's adjacent to the West Anchorage located between the western tip of Lido Isle and Lido Villagc Marina. As reported by the Harbormaster. a "large vessel" is ;generally described as being over 804cet. The "Large Vessel Areae \\ ill permit the vessel owner to provide the privately owned mooring tackle (either single- or double -point) necessary to safely accommodate their "large vessel". even when the vessel is not occupying the mooring. During their stay in the Harbor vessels must be anchored fore and aft while in the "Large Vessel Area'. During the course of my research. two municipalities were identified that lease moorings owned by the municipality and also lease tidelands in their respective mooring fields and permit the use private mooring tackle — Pillar Point harbor in Half Moon Bay and Morro Bay. Pillar Point is operated by San Mateo County and has all "inner harbor" that is dedicated to recreational and commercial marinas and slips and a protected 'outer harbor' that permits noorings and includes both County owned mooring tackle and private mooring tackle. The moorings that include County owned mooring tackle are rented on a monthly basis at a rate of $=1.38 per linear foot of vessel. with a nlinimunl monthly Tee of $108.00. The moorings that 9-54 Lauren W"ooding Whitlinger March 26, 2018 Page 11 include private mooring tackle are rented on a monthly basis for $1.65 per linear foot of vessel, with a Illlllllllum monthly payment o['%49.00. In both cases. the Illoorlllg lees are due and payable whether or not the vessel occupies the mooring for the entire month. It Should be noted that the rate for a "guest" nlooring is $11.00 per day. Slip rates for recreational vessels at Pillar Point ranee Trona $0.30 to $10.06 per linear foot. and the rate Ior a guest Slip is $0.77 per linear loot for nlono- 111.111S. With 150 -percent charged for multi -hull vessels. It was reported by a represcntati\ c of the Harbor Department that they are phasing out the use of private mooring tackle: however. it \viii remain transferrable until it is removed. Morro 1.3ay has 125 moorings located in the harbor and approximately 50 are "privately owned". meaning that an individual owns the Illoorlllg tackle and leases the space from the Cite. All moorings are leased on a month-to-month basis. The nloorinus at Morro Bay are leased on a fixed' ybasis regardless ol� vessel length and the rate Ior a City owned Illoorlllg is $251.50 per month. while the rate for a "private mooring'. is $87.04 per month. The guest mooring rate is $0.28 per linear loot. while the guests slip fees are $1.24 per linear foot for City owned slips. The monthly mooring fees for both public and private moorings are due. regardless if the Illoorlllg occupied by a vessel. Tlne two municipalities identified above that lease space in mooring fields differ significantly in the rate per linear foot that they charge for moorings and slips as compared to Newport Beach: ho\vevcr. the data is instructive in providing a percentage difference between the rates charged 1`61- moorings ormoorings with city -owned tackle as compared to moorinos with private tackle. The following table IS a SU111111flry Of the percentage diSCOUnt associated with the use of private mooring tackle: Rate Ior Moorinu with City owned tackle: Rate Ior Mooring with private tackle: Absolute Difference: -:- Rate for Mooring with City owned tackle Discount for private llloorlllg tackle: Pillar Point Morro Bay ($/Linear Ft.) (Fixed Rate) $4.38 $251.50 -1.65 - 87.04 $2.73 -:- 4.38 62.3% $164.46 -:- 251.50 65.4% The analvsis reflects a consistent percentage discount (62.31!/o to 65.4%) for the use of private Illoorlllg tackle as opposed to a similar mooring with tackle owned by the municipality. As noted above. both municipalities charge for the entire month reGardless oil'the amount of time that the vessel Occupies the nlooring. In essence. both municipalities recognize that the tidelands under the nlOorin�Ul are encumbered whether or not the vessel occupies the mooring. In addition to the Information provided above. 1 interviewed a representative ole Pacific Tui` Boat Service. \\ hich is based in Long, Beach. A portion of their business Is to provide. tu`(. barge. SCOW and associated services along the coast from Sall Diego to Sall Francisco. They complete projects Ior private entities andgovernmental agencies. Their representative reported the he was not aware of a municipality that charges them a mooring fee while they are completing a project, and that most of their project's (dredging. towino. salvage, setting moorings. marine construction. floating crane service. etc... ) benefit the overall harbor community. it was the representative's opinion that a vessel owner should be Charged a monthly fee. regardless ofthe amount ol`time their vessel OCCU111CS tile llloorlllg, and that Ile would anticipate thCy WOUld pay less Ifthey use their own tackle. 9-55 Lauren Woodina Whitlinger March 26. 20I S Page 12 It was noted that they generally use their own tackle Ior nlulliCipal and private projects. it is recognized that Pacific Tug is a commercial user and the assignment applies specifically to recreational use of the "large vessel area' adjoining the West Anchorage; however, the same principals appy- as both commercial and recreational vessel moorings encumber the underlying tidelands. On the basis of the interviews completed and the data uncovered. i have concluded that the Fair Market Rent for the Guest/Transient (\Mooring in the "Larue Vessel Area" of the West Anchoraue. usillu Privatclv Owned Moorinu, tackle. as of March 26. 2018. is a 62.5 -percent diSCOUnI 11'0111 the otherwise comparable Guest/Transient Mooring Fee charged th1'oug110ut Newport Harbor fur moorings with City -owned tackle. On the basis of the survey and analysis set forth in my Appraisal Report, dated November 30. 2017, of which this is an Addenda. the concluded Daily Current Fair Market Rent for Off -Shore Guest/Transient moorings ("Sub -Permits") in Newport Harbor. as of November 27. 2017. is: `61.25 per linear foot of vessel. adjusted annually based on the change in the CPI. When the discount of 62.5 -percent is applied to the Daily Current Fair Market Rent for Off -Shore Guest/Tra11SiC11t moorings of $1.25 per linear foot. the indicated Daily Current Fair Market Rent for Oft=Shore Guest/Transient moorings with private tackle is $0.47 per linear foot ($1.25 x (1.0 - 0.625)). per clay. If a different Daily Fee for a vessel oil a guCst/transient mooring \vith City - owned tackle is established. the same 62.5 -percent discount would apply to a vessel using Privately Owned Mooring Tackle in the `'Lame Vessel Area" oi'the West Anchorage,. Valuation Based upon the work undertaken. and my experience as a real estate analyst and appraiser. I have lornled the opinion. as of the 2011 day of N/larch 2018. subject to the Assumptions and Linliting Conditions contained in my original report and this Addendum. that the subject tidelands in Newport i-Iarbor have the following fair Market Rental values: Daily Fair Market RCllt for the Guest Slips at Marina Palk. the Greater of S2.00 per Linear Foot of Vessel, adjusted annually based on the change in the CPi or S80.00 per Night for a 40 -Foot Slip, adjusted annually based on the change in the CP[ 5110.00 per Night for a 55 -Foot Slip, adjusted annually based on the change in the CPI Monthly Fair lvlarket Rent for the Dinghy Racks at City Facilities 535.00 per Space, per Month, adjusted annually based on the change in the C111. 9-56 Lauren Wooding Whitlinger March 26. 2018 Pao e 13 Dally )'air Market Rent for a Guest/Transient Mooring in the "Large Vessel Area" of the West Anchorage, with Privately Owned Mooring Tackle Discounted 62.5 -percent from the otherivise comparable Guest/Transient Mooring Fee Charge throughout the Ha►•bor for Moorings with City -owned tackle or Stl.47 per Linear Foot of Vessel Ccrti lication l'o the best ole my knowledge and belief. 1 certify that: The statements Of, fact Contained in this report are true and correct. fhc reported analyses, Opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses. opinions and conclusions. I have no present or prospective interest in the property that is the subject of this report. and I have no personal interest or bias with respect to the parties involved. i have performed no services. as an appraiser Or in any other capacity, regarding the property that is the subject of this report within the three-year period Iillnlechately preceding acceptance of this assignment. I have no bias with respect to the property that is the subject of this report or to the parties involved in the assignment. My engagement in this assignment was not contingent upon developing or reporting, predetermined results. My Compensation Is not contingent Upon the reporting ol'a predetermitied value or direction in value that favors the cause of the client. the amount oi' the value estimate, the attainment of a stipulated result. Or the OCCLIrrence of'a subsequent event. The reported analyses. Opinions. and conclusions were developed, and this report has been prepared. in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which inCIUde the Uniform Siandarcly of Prolc.,ssiunal Appraisal Practice. The use of' this report is subject to the requirements of the Appraisal Institute relatinu, to review by its duly authorized representatives. I have completed a physical inspection ole the property that is the subject of this Restricted Appraisal Report. in accordance with the USPAP Competency Provision. I certify that I have the knowledge and experience to complete this assignment and have appraised this property type before. Disclosure of the contents of this Addenda to my Appraisal Report is governed by the 13ylaxvs and Regulations ofthe Appraisal Institute. In furtherance ofthe aims ofthe Institute to develop higher 9-57 Lauren Wooding Whitlinger March 26, 20I S Pate 14 standards of professional perlorlllance by Its Members. the appralser may be rcgLllrCCI to submit aLlthorizcd committees of Said Institute Copies of this report and any SL1bSCgLICIlt chanocs or modifications thereof. fhe Appraisal Institute conducts a voluntary program of" C011tillUing education for its designated members. MAI's who meet the ►1 inil11L1111 standards of this program are awarded periodic educational certification. As of the date of this report. James Q. Neuer has completed the rCgLIlrCI11Cl1lS Undcr the COI1tillUlll�.Z cdtlCat1011 programOfthe Appraisal II1StitLltC. Rcspcctfully SLlbmitted. Jai es Q et-er. MAI Cal rornia Cir oral Al uraiser No. A0003143 9-58 9-59 B I 1 I L P Q R S T U 1 City of Newport Beach Schedule of Rents, Fines, and Fees (SRFF) -Harbor 2 A B C D E F G H 3 Current Charges Proposed Charges 2018 adj 1 1 Full Cost/Market Value 4 SERVICE NAME Total or Base Fee Total or Base Fee R TYPE Total or Base Incremental - CPI Notes Fee (if applicable) S 6 HARBOR Dinghy Rack Rental Application Fee $0.00 $ 17.00 M.C. 3.36.030 COS -Fee $17.40 Yes 7 ImpoundFee- Initial $150.00 $ 68.00 M.C. 3.36.030 COS -Fee $68.09 Yes 8 Impound Fee - Loose or Lost and Found see notes $ 46.00 M.C. 3.36.030 COS -Fee $46.72 Yes Free first 5 days then 9 Boats/Vessels $50/day Inspection Fee - Charter Boats $0.00 $ 341.00 M.C. 3.36.030 COS -Fee $341.38 Yes 10 Inspection Fee - Dock, Pilings, Code $0.00 $ 209.00 M.C. 3.36.030 COS -Fee $209.47 Yes 11 Enforcement Inspection Fee - Live Aboards, Marine Activities $0.00 $ 275.00 M.C. 3.36.030 COS -Fee $275.42 Yes 12 Permit Re -check Key Card Replacement $0.00 $ 23.00 M.C. 3.36.030 COS -Fee $23.12 Yes 13 Large Boat Permit (80+ Lineal Feet) $0.00 $ 64.00 M.C. 3.36.030 COS -Fee $64.12 Yes 14 Lend a Mooring Line/Help to get on a Mooring $0.00 $ 32.00 M.C. 3.36.030 COS -Fee $32.36 Yes 5Marina -L5- MarinaPark Cancellation Fee see notes $ 11.00 M.C. 3.36.030 COS -Fee $11.60 Yes Cancel 72 hours or more $10 16 fee, less than 72 hours forfeit Mooring & Slips Rental Application Fee $0.00 $ 17.00 M.C. 3.36.030 COS -Fee $17.40 Yes 17 Mooring Extension Permit $0.00 $ 326.00 M.C. 3.36.030 COS -Fee $326.81 Yes 18 Mooring Inspection $0.00 $ 68.00 M.C. 3.36.030 COS -Fee $68.09 Yes 19 Raft Up Permits - East Anchorage $0.00 $ 62.00 M.C. 3.36.030 COS -Fee $62.29 Yes 20 Temporary Sea Lion Deterrent $0.00 $ 136.00 M.C. 3.36.030 COS -Fee $ 136.17 Yes 21 Towing Fee (Boats under 14') see notes $ 71.00 M.C. 3.36.030 COS -Fee $71.76 Yes $0 if done by City staff 22 Flat Rate for Electricity - Marina Park $0.13/kWh see notes M.C. 3.36.030 COS -Fee Pass $12.03 $0.13 Yes $12 plus actual per kWh 23 Thru usage Towing Fee (Boats over 14') 100% Contractor Cost see notes M.C. 3.36.030 COS -Fee Pass $23.20 Yes $23 plus 100% contractor 24 Thru cost Marina Park Deposit $50/day $ 50.00 Resolution Deposit Yes Charged against stay, 251 forfeited if canceled with less Impound Fee (Boats over 14') see notes see notes M.C. 3.36.030 Pass Thru see notes Yes 100% contractor cost 26 Lost/Broken Line $0.00 $ 69.00 M.C. 3.36.030 Pass Thru $69.73 Yes 27 City owned Guest Moorings - Offshore (Year- $27/Night $1.25 per Lineal Foot Resolution Rental $1.25/LF Yes 28 Round) (LF) Dinghy Rack Rental - Marina Park/Balboa Yacht $25/Month $35 per Month Resolution Rental $35/Month Yes 29 Basin Impound Fee - Nightly Storage Fee $50/Night see notes Resolution Rental see notes Yes Same charge as Sub - 30 Permittee Rental Rates Large Vessel (80+ LF) Offshore Guest Mooring Same as Offshore Guest $1.55 per Lineal Foot Resolution Rental $1.55/LF Yes 31 Moorings (LF) Large Vessel Guest Anchorage Rate -Non City Same as Offshore Guest $0.047 per Lineal Foot Resolution Rental $0.047/LF Yes 32 Tackle- no boat Moorings (LF) Marina Park Boat Slips (40' Slip) $60/Night $80 per Night Resolution Rental $80/Night Yes 33 Marina Park Boat Slips (55' Slip) $82.50/Night $110 per Night Resolution Rental $110/night Yes 34 Marina Park Boat Slips (Overhang Charge) $1.50/Foot $2 per Foot Resolution Rental $2/Foot Yes 35 Multi -hull Vessel - 2 hulls Same as Offshore Guest $1.50 per Lineal Foot Resolution Rental $1.50/LF Yes 36 Moorings (LF) Multi -hull Vessel - 3 hulls Same as Offshore Guest $1.75 per Lineal Foot Resolution Rental $1.75/LF Yes 37 1 Moorings (LF) Sub-Permitee Guest Moorings- Offshore (May- $27/Night $1.25 per Lineal Foot Resolution Rental $1.25/LF Yes 38 Oct) (LF) Sub-Permitee Guest Moorings - Offshore (Nov- $16/Night $1.25 per Lineal Foot Resolution Rental $1.25/LF Yes 39 April) I (LF) Sub-Permitee Guest Moorings- Onshore (Year- $11/Night $0.625 per Lineal Foot Resolution Rental $0.625/LF Yes 40 Round) (LF 9-59