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HomeMy WebLinkAbout00 - Non-Agenda ItemsReceived After Agenda Printed May 14, 2024 Non -Agenda Item From: Sally Peterson Shore Mooring Permittee Dear Mayor and City Council Members, In anticipation of the Harbor Commission Mooring Rate Recommendations appearing on your agenda soon, I send you my thoughts on the rate for the unique shore moorings. There has been a lot of data presented regarding the offshore moorings. Shore (or "Onshore") Moorings are quite different and should be addressed separately. RE: SHORE MOORING RATE ERRORS and REVISED LOOK AT SLIP -TO -MOORING RATIO - Flawed 2022 Shore Mooring appraisal conclusion was 12 times the current rate! - Any use of the Slip -to -Mooring Ratio for Shore Moorings should be adjusted for: - Size —Rate for a wider, longer slip was used - Requiring a downward adjustment of 28% -Use Restriction - Electric Boats have created huge demand and higher rates for small slips - Electric Boats cannot use Shore Moorings Historic Shore Mooring rate at 50% of Offshore Rate may still be the correct methodology. - Slip -to -Mooring Ratio for Offshore Moorings should be revised, using "Like for Like" comparison which yields a 14% ratio. (pg. 3) RECENT HISTORY of SHORE MOORING RENT RECOMMENDATION In 2022, an appraisal of the shore moorings was prepared for the Harbor Commission. The appraiser concluded that the rents should increase to $360 per month. This proposal was 12 times the current $30.06 per month rate. Common sense tells you something is wrong. Rather than order another appraisal, the Harbor Commission held numerous meetings, but ultimately the subject was dropped from the Harbor Commission agendas. Then, in January 2024, the Harbor Commission presented an appraisal (same appraiser) for offshore moorings. Again, numerous meetings were held. It wasn't until the end of this process that the Harbor Commission presented their recommended numbers for shore moorings, using the same analysis as for the offshore moorings. This is simple, but WRONG. I don't feel that this methodology is right for shore moorings, but if the Slip to Mooring Ratio is to be used, once the flaws in the methodology (addressed later) are corrected, additional adjustments need to be made to the shore mooring analysis as there are significant differences between the shore moorings and the offshore moorings. SIZE ADJUSTMENT FOR SHORE MOORINGS Uniquely, the shore mooring has not only a length restriction but also a beam limit. By Code, the maximum boat length is 18 feet and beam is 8 feet. Offshore mooring boat lengths cannot exceed the designated length of the mooring, but Offshore Moorings have no beam limit. And the rents for all offshore mooring lengths was derived by a comparison to Balboa Yacht Basis (BYB) slips of the same length as each offshore mooring lengths. Because the BYB does not have 18 foot slips, the Harbor Commission incorrectly used the rate for 20 foot slips. The typical 20 foot slip can hold a boat with a 10 foot beam (according to the California Department of Boating and Waterways Design Guidelines and BYB staff). Using this Slip to Mooring Ratio, to accurately derive a rate for the shore mooring's size restriction, a size adjustment must be made: Shore Mooring Size — Maximum 18 x 8 = 144 S.F. BYB 20 foot Slip 20 x 10 = 200 S.F. Difference = -28% DEMAND/LIMITED USE FOR SHORT MOORINGS A review of the chart of rental rates shows that the 20 foot rate per linear foot is disproportionately high. This is due to the high demand for these small sizes by the big users in this Harbor — electric boats. Unique to all other mooring types, during low tides, boats on shore moorings are grounded. This prevents the use of most boats during this time. And of significance, because of potential damage, this prevents the mooring of boats with a keel and/or in -water rudder and props (electric boats +). And, of course, there is no electricity to charge a boat on a shore mooring. Thus, this high slip rate for shorter slips that is driven by electric boat use in the Harbor does not transfer to shore moorings and applying the same ratio as used for larger offshore moorings is inappropriate. At best, a large downward adjustment should be made. Historically, the shore mooring rate was 50% of the offshore rate. Taking into consideration the square footage adjustment (-28%) and the limitation of the boats (No Electric Boats +) that can be moored on shore moorings, the prior use of the 50% discount might be applied to the 25-foot offshore rate to derive the rent for shore moorings. OTHER SHORE MOORING RENT ANALYSES Direct Comparison Though there are not other shore moorings like Newport's in Southern California, there are three other tidelands uses of small boat storage — Mission Bay Beach Bars, Alamitos Bay Sand Stakes and Santa Barbara West Beach. A more detailed summary of these comparables and the calculations are presented on page 4. In brief, applying a location adjustment derived by comparing the average rate for 25' slips in each harbor as compared to Newport Beach, the concluded rate by Direct Comparison is $3.75/If/mo., or 48% of the proposed rent for 25 foot moorings. Ratio to Offshore As previously discussed, historically, the Shore Mooring Rate was calculated as a percentage of the Offshore Rate — 50%. Since the rent is for tidelands area used, and shore moorings have a beam restriction that the Offshore moorings do not, the 50% difference represented the difference in beam, or the total potential tidelands per linear foot used. The percentage was derived by dividing the maximum beam allowed for shore moorings by the widest beam for 20 to 30 foot production boats (Boats.com survey). CONCLUSION Again, please realize that Shore Moorings are unique due to beam restrictions and the grounding of boats during low tide. Adjustments must be made for this uniqueness. If the final decision is to use a CORRECTED Slip to Mooring ratio, A rate of 50% of the 25-foot offshore concluded rent should be used for Shore Moorings 2 SIGNIFICANT PROBLEMS WITH THE SLIP TO MOORING ANALYSIS IN DERIVING OFFSHORE RATIO Since all other tidelands uses in the Harbor use the State Lands Commission methodology, I do feel that this is the appropriate methodology for moorings. However, if the Slip to Mooring Ratio is to be used, proper methodology needs to be applied to support the ratio used. Please remember that once a ratio is adopted, the errors in the current rent recommendation made will be hard to reverse and will be compounded year after year. The fact that the Harbor Commission adjusted the appraiser's recommendations indicate that they saw flaws in the analysis. The flaws are more significant than indicated by the Harbor Commission conclusions. All involved have looked at the data many times and in many ways to determine what the problem is, but have consistently worked with the appraiser's analysis. After looking at his data many, many times, it is my conclusion that the significant issue that impacts everything is that the appraiser was inconsistent in the use of his data. For some harbors, he used an average rent, while others he used the highest possible. Some rents were unverifiable. His slip rates for each harbor were averages, but he doesn't provide what the average boat length is in each harbor. Each harbor is different, but Newport has the longer boats, skewing his percentages higher. To correct this, a comparison of mooring lengths in each harbor has to be compared to slips of the same length in that same harbor. Since permittees pay the rent based on the maximum length possible on their mooring, not their boat length, this maximum mooring length is the basis for comparison. And the slip rate for this same length is used for comparison —LIKE FOR LIKE. Mooring Mooring Slip Rate $/If/Mo. Harbor Length _ If Mo. Same If as Mooring Ratio San Diego 29 5.09 22 23% 54 2.91 37 8% 60 2.42 30 6.5% Mission Bay 25 2.69 16.55 17% Santa Barbara 50 .58 12.23 5% Morro Bay 54 2.04 17.17 12% Monterey 50 1.57 11.80 13% Pillar Point 50 2.03 11.32 18% Adjustments - It is appropriate for an appraiser to adjust for the differences between the comparable and the subject. There are major differences that need to be taken into consideration, but weren't. a. Ownership and maintenance of the mooring tackle varies between some of the comparables and the subject. Of the comparables used by the appraiser, San Diego, BYC (most) and NHYC maintain the moorings for the permittees. San Diego Mooring Company maintenance cost was estimated at $120/Mo. according to CBRE appraisal. Two other harbors have both City maintained and leased out moorings and permitted moorings where the Permittee installs and maintains tackle, similar to Newport. There is a 300% difference in rents between the City -maintained tackle and the Permittee maintained mooring. This needs to be analyzed. b. Dinghy storage is not included in any of the comparables' rent (except for BYC and NHYC) However, all harbors except Newport Beach have dinghy storage available for a fee ($100/Mo.+/-). There are few dinghy storage spaces available in Newport, and these have lengthy waiting lists. A dollar or percentage adjustment is speculative, so a ratio at the bottom of the range might be appropriate. Conclusion No weight is given to the San Diego rates as the rents have not been increased in many years and Santa Barbara as the moorings are in the outer waters and do not have much demand. Based on this, the ratio range narrows to 12- 18% with a concluded rate at 14%. Additional adjusting for maintenance is needed if BYC and NHYC are used. 3 FURTHER DATA FORD I RECTCOMPARISON TO OTHER SOUTHERN CALIFORNIA SMALL BOAT TIDELANDS STORAGE The following approach to value for shore moorings in Newport includes a Southern California Onshore Mooring Comparison utilizing onshore moorings in three other areas. This approach incorporates a location adjustment utilizing a comparison of slip rents between Newport and the other bays. Two slip rent surveys completed in Newport are analyzed and surveys in other bays have been updated. Not included are marinas requiring membership and marinas where significant data was not available. The tidelands onshore boat storage in each harbor vary. None are like those in Newport. In fact, none are alike. Mission Bay has Beach Bars, with each boat being assigned a spot on a secured bar located on the shoreline. Alamitos Bay has what they call "Sand Stakes" with each boat assigned a wall ring on shore. These are available to the permittee for 11 to 12 months. The boats have to be moved for beach replenishment, typically for one week. 11 month occupancy is used in this analysis. Finally, Santa Barbara has two types of storage, one for larger catamarans and one fenced beach area for smaller boats. The catamaran beach is not included in this analysis as in recent years, it has experienced very high vacancy. Briefly, each of these mooring types has its own advantages, but are generally considered comparable. These others require more than one person or extra equipment to move the boats into water, but Newport mooring permittees have to pay for maintenance of the mooring and boat bottoms. The three onshore boat storage comps are summarized as follows: Mission Bay Beach Bars $171/year with the typical bar size limit at 14 ft. _ $12.21/lf/yr Alamitos Bay Sand Stakes $305/11 months for boats up to 16 feet = $19.06/If/yr Santa Barbara West Beach $350/year for boats up to 16 feet = $21.88/lf/yr Location Adjustment- A location adjustment utilizing the average rent for 25-foot slips for each area as compared to similar rents in Newport is utilized in this analysis. The 25-foot slip is used because it is the most common small slip size in each bay. The Newport Beach rate for slips is the rate for 25 foot slip at the Balboa Yacht Basin Marina. The surveys in the other bays are current. The rents represent the rent per linear foot divided by the number of marinas surveyed in each bay. The indicated adjustment factor for each bay is derived by dividing the average for Newport by the average for each bay. Newport Beach average of BYB = $32.38/lf Mission Bay average of 4 marinas = $15.92/If Adjustment Factor = 2.03 Alamitos Bay average of 2 marinas = $14.90/lf Adjustment Factor = 2.17 Santa Barbara using one marina operated by the City = $11.48/lf Adjustment Factor = 2.82 Indicated rental for Newport Shore Moorings after the Location Adjustment — The rent per linear foot for the three tidelands boat storage comps is multiplied by the Adjustment Factor as follows: Mission Bay $12.21/lf/yr x 2.03 = $24.79/lf/yr. Alamitos Bay $19.06/If/yr x 2.17 = $41.36/lf/yr Santa Barbara $21.88/lf/yr x 2.82 = $61.70/If/yr Conclusion: An average of all three indicate a rent at $42.62/lf/yr. In brief, the concluded rent is $45/If/yr, or $3.75/If/mo., or 48% of the proposed rent for 25-foot moorings. 4 From: P+B C. <patandbud @gmail.com> Sent: May 13, 2024 2:47 PM To: City Clerk's Office <CityClerk@newportbeachca.gov> Subject: We need your help with our mooring May 12, 2024 To Whom It Hopefully Concerns, We need your help with our moorings and homes, please. In 2017 all of Newport Beach Harbor rules were rewritten called Title 17. In it it states that the only way to be on a mooring was to purchase it from a private permit holder as it has been done for many, many years. The price varies and at this time a 50' mooring now goes for about $45,000 You then register it with the city and pay a rent. The rent would go up with cost of living, CPI. A mooring holder must also pay the maintenance of the mooring (cost about $1500 every 2 years by a city contractor). I bought my 50' mooring with those rules. A city employee helped walk me through the process. It was a big commitment and investment and we wanted no mistakes. This would be our retirement home. Now the city is changing/breaking the rules on their own. They had a lottery to license moorings they have received from foreclosures or other reasons instead of auctioning them as we were told they were to do when writing title 17. They also made new rules for these instead of keeping to code. They, for a 50' mooring, will start charging about $800 a month. Then we were told every permit holder would have to pay close to the new rental price as the lottery moorings that were given for free! This fee is over a 400% increase on top of the cost of living raises we have been paying! So who will buy a mooring when they are giving them away? Also, the harbor commission is suggesting we will now have to pay 8 months of rent as a transfer fee if we do sell/transfer. Cruel! We will take a loss on this while being priced out off our mooring! The unfairness: The mooring permit holders pay for the water we sit on. Homeowners pay for the water the dock sits on! They tie multi boats to these docks for free! Homeowners pay as little as $30 a month for the dock for numerous boats. We will be paying over a 400% increase on top of the CPI increases on top of never ending increases planned. Suggested starting at $770 a month for us, $9240 per year! We will be paying far more than any other mooring in California per/foot and more than anyone in our harbor! 4. The homeowners can rent out dock space for big profit! Mooring holders can't. If we are not on our mooring the city can rent out the space for $70 p/night with no cost to them. Many are available for the city to use for free but many sit unused. 5. Homeowners can extend their boat space by 50% of the width of the boat at no extra fee. We must pay for our boat length or mooring length whichever is the greater. 6. The new transfer fee of 8 months of rent proposed will make it impossible to sell since the city is giving them away. 7. The harbor is "for the people". We are your Teachers, Firemen, City Workers, Boat Captains, your Blue Collar Workers that having a boat is a luxury that the new fees will bring so much pain. To not be able to pass on the joys of sailing that boaters had growing up here to their children. We have heard our neighbors speak of the pain this will bring. 8. Homelessness! Of the 700 offshore moorings, 51 are permitted for living -a -board. These are mostly boaters who have worked and lived in the area their whole lives. I personally know more than % and all but 2 are under 60 years of age. Most are all collecting social security, a few are Vets on fixed income with CPI increases. What happened to rent control?? Since 2017 CPI was up about 31%, so was our mooring fees. To add 400% + with constant raises planned will cause them to lose their investment in the mooring, boat and leave some homeless! Yes, we heard this was the goal! Cruel! 9. The city has been involved with the sales of many moorings over this year without informing these new permit holders of this new plan of fees! Shame on them! 10. 1 am told that the homeowners pay a lot in property tax. I also read that Robert Cohen bought John Wayne's home because it had the largest dock for his 125 foot P'zazz. So please don't tell us they have no resale value. We don't want the homeowners rates to go up, we want to pay the same! I love my city. Please don't do this injustice. Thank you for Your time, Patricia Coomans From: City Clerk"s Office To: Mulvey. Jennifer Subject: FW: Morning increase Date: May 13, 2024 5:27:42 PM From: Dick Andrews <captaindicky101@gmail.com> Sent: Monday, May 13, 2024 5:27:20 PM (UTC-08:00) Pacific Time (US & Canada) To: City Clerk's Office <CityClerk@newportbeachca.gov> Subject: Morning increase [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recoanize the sender -and know the content is safe. Are steams City Council My name is Dick Andrews it disabled vet I have my boat on j210 The proposed morning increases are unfair everyone should pay the same price for the use of State tight lands That includes the homeowners the yacht clubs and businesses in and around Newport Harbor When I first got my morning I paid a yearly tax now I am paying rent or whatever they want to call it monthly I like the monthly payments it makes it easier financially for me the newer the newer fees will cause a hardship for me I may even have to give up my dream boat Sincerely Dick Andrews j210 From: City Clerk"s Office To: Mulvey, Jennifer Subject: FW: Public Comments for May 14, 2024 City Council Meeting Date: May 13, 2024 8:53:31 PM Attachments: Do Some boats pay no tidelands fees at all .pdf From: Anne Stenton <anstenton@gmail.com> Sent: Monday, May 13, 2024 8:53:03 PM (UTC-08:00) Pacific Time (US & Canada) To: City Clerk's Office <CityClerk@newportbeachca.gov> Cc: George Hylkema <seeseadragon@yahoo.com> Subject: RE: Public Comments for May 14, 2024 City Council Meeting [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you recognize the sender and know the safe. Good Evening, Can this be made available as material for public comment for tomorrow's meeting? Can we also request that it be available to be displayed during the public comments period? Thank you, Anne Stenton Sent on behalf of George Hylkema Do some of the boats in Newport Harbor pay no tideland fee at all? Every boat in Newport Harbor uses the public tidelands in exactly the same way. On a sunny day every boat casts a shadow on the bottom of the bay which outlines its shadow bottom print and its approximate claim on the tidelands. Whether it is secured to some cleats on a dock or secured to lines attached to floating buoys and the buoy in turn secured by chains to iron weights on the bottom of the bay there is no difference in its claim for private use of public tidelands. Every boat then should be paying for the private use of the public tideland space. In this familiar slide below, boats are illustrated at a private dock compared to a boat on an offshore mooring. The text on the slide notes that for the same number of square feet of dock surface compared to the same number of square feet determined to be the footprint of a boat on a 40 foot mooring the dock owner pays $30 per month while the mooring permit holder will pay $480 per month as a tideland fee. This is actually a dock to boat comparison. If you look again at the drawing you see that there are two boats, one on each side of the wooden dock. A minimal fee is paid for the dock, but no tideland fee is paid for the boats. Given the non discrimination requirement of the code* under which the City of Newport Beach is granted administration of the public tidelands, the reality that some boat owners pay no fee at all for private use of the public tidelands is obviously not in compliance with the rules. Price Discrimination in Rates Charged by the City Wealthy Waterfront Dock Permit Average Joe Mooring Permit r The City will be forcing mooring permittees to pay 15x for the same permit in the same harbor *Beacon Bay Bill, Granting Statue for the City of Newport Beach Tidelands Chapter 74 of the Beacon Bay Bill STATUTES OF 1978 page 199 (d) In the management, conduct, operation, and control of the lands or any improvements, betterments, or structures thereon, the city or its successors shall make no discrimination in rates, tolls, or charges for any use or service in connection therewith Newport Beach City Council Meeting 05/14/2024 — Public Comment Re: Yacht Club Lease Rate Inquiries: Mayor and Council, It's said that The Harbormaster indicated at a Yacht Club function, that they would not be subject to the 300, to over 500% increase in mooring fees under the Harbor Commission Recommendation of 04/10/2024. Verification of Yacht Clubs being exempted, or otherwise insulated from the fee increases has been sought a number of times. Yesterday, Harbor Commission Chair Sculley e-mailed me, saying: "We have answered this question in multiple Harbor Commission meetings and the rate structure that has been recommended by the Harbor Commission is for mooring permittees as they are defined in Title 17 of the Municipal Code" The apparent reluctance of City personnel to respond with a simple "yes" or "no", is throwing up all kids of red flags for me. I suspect that each of you is aware, of The State Lands, and California Coastal Commission's high level of concern about the existing rate disparity in Newport Harbor, wherein mooring permit holders currently pay multiple times more in rents/fees, yet The Harbor Commission suggests increasing the divide even further, while apparently exempting Yacht Clubs, when some on the Commission are equity members in the Clubs, and/or hold mooring permits there. Additionally, some Decisionmakers, and parties contributing to the formulation of the recommendation, are pier permit holders, who pay much lower rates than mooring permitees. These things are indicative of financial interests, which should have been previously disclosed. After a period of intimate involvement, The Harbormaster eventually recused himself, and has said "discussions may affect me financially". It's clear to me, that a number of other involved parties suffer from similar conflict, and should not have participated in the process. Recusal as an afterthought, does not correct prior, flawed process. As you go into Closed Session to discuss "ANTICIPATED LITIGATION - SIGNIFICANT EXPOSURE TO LITIGATION", I hope that you can see beyond the cherry picking of facts, and obfuscation that's preceded the Harbor Commission's recommendation. Please recognize the wrongful conduct that has brought us to this point, and consider how much additional inconvenience and expense you may subject civil servants, citizens, and taxpayers to, in trying to defend what has transpired to date. EL', ",,� ,edam Leverenz adlever@hotmail.com pOM NOW,) 6'®14,ul� Website. w•,vw.SouthMooring.com License # 95 74 14 er?iail: ablesouth yahoo..ar,; South e. impany Bill To Rill Pn\Ner:� 225 Via tan Rcnnr \c%%port Bcach. CA 9'663 RO Box 528 Newport Beach, CA 92661 Direct: 94) 645.0334 Fax. 949.645.1041 Billing949.423 9823 Date Invoice # 4 16 2024 1 1 29 i Mooring Terms Due Date A-061 \ct ;U 5 16 'm,l Quantity Description Amount In,hect and Moorim, 295.00 2 In�,pcct and Paint 13uo\, 196.00 (l.(1(1 1 i 1 2" Chain 0.00 146.251 I I ; 4" Chain N8.75 1- 4" Shackle 93.7; I 0.00 14� 1 ''• Chain 140.'i 1 1' : 4" Chain 31 I ' 1 2" Shackle 32.001 4 34"Shackle 125.00l I Chain liir Ring lluu\ (rcquircd h-, cit\ r 7 .IIIr I Subtotal ` 1- 48.w' Sales Tax (7.75%) 597.19 Balance Due 'str:tlii Notes: No increase in rates until January 1, 2025. Six Proportionate increases over almost 6 years. BYB (Balboa Yacht Basin) rates are based on the City adopted Marina Index of 5 marinas in Newport Harbor per the Netzer appraisal. January 1, 2025 and July 1, 2025 increases are about one -tenth the difference between current rates and the adjusted FMV. Each fiscal year beginning July 1, the annual adjustment is about one -fifth the difference between current rates and the adjusted FMV. Each year the increase will be adjusted based on 24% of the annual adjustment percentage per the City Marina Index for slip rentals. Rate Comparisons Increase Is Phased -in Through FYE 2030 Price Per Linear Foot Per Month Designated Mooring Lengths BYBAverage Slip Rental Rate $/LF Current Mooring Rates $/LF Effective Jan 1, 2025 Effective July 1, 2025 Effective July 1, 2026 Effective July 1, 2027 Effective July 1, 2028 Effective July 1, 2029 LOA Feet $ per LF $ per LF FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030 18 32.23 1.67 2.27 2.88 4.08 5.29 6.50 7.71 25 32.38 3.34 3.74 4.19 5.08 5.98 6.87 7.77 30 39.60 3.34 3.91 4.53 5.78 7.02 8.26 9.50 35 42.59 3.34 3.98 4.68 6.06 7.45 8.84 10.22 40 50,09 3.34 4.16 5.04 6.78 8.53 10.28 12.02 45 51.27 3.34 4.19 5.09 6.90 8.70 10.50 12.30 50 60.59 3.34 4.42 5.54 7.79 10.04 12.29 14.54 60 70.65 3.34 4.66 6.02 8,76 11.49 14.22 16.96 70 74.081 3.34 1 4.74 6.19 1 9.09 1 11.98 14.88 17.78 Designated Mooring Lengths/Feet BYBAverage Slip Rental Rate $jMonth Current Mooring Rates $/Month Price Per Mooring LOA Per Month Jan 1, 2025 FYE 2025 July 1, 2025 FYE 2026 July 1, 2026 FYE 2027 July 1, 2027 FYE 2028 July 1, 2028 FYE 2029 July 1, 2029 FYE 2030 18 580.14 30.06 40.93 51.79 73.52 95.25 116.98 138.72 25 809.50 83.50 93.46 104.75 127.00 149,50 171.75 194.25 30 1,188.00 100.20 117.34 135.90 173.40 210.60 247.80 285.00 35 1,490.65 116.90 139.41 163.80 212.10 260.75 309.40 357.70 40 2,003.60 133.60 166.52 201.60 271.20 341.20 411.20 480.80 45 2,307.15 150.30 188.62 229.05 310.50 391.50 472.50 553.50 SO 3,029.50 167.00 220.76 277.00 389.50 502.00 614.50 727.00 60 4,239.00 200.40 279.41 361.20 525.60 689.40 853.20 1,017.60 70 5,185.83 233.80 331.72 433.30 636.30 838.60 1,041.60 1,244.60