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HomeMy WebLinkAbout2012-92 - Amended 2012-96; Rent for Large Commercial MarinasRESOLUTION NO. 2012 -92 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH SETTING RENT FOR LARGE COMMERCIAL MARINAS LOCATED UPON TIDELANDS WHEREAS, pursuant to the 1978 Beacon Bay Bill, as amended, ( "Beacon Bay Bill ") the City of Newport Beach ( "City ") acts on behalf of the State of California as the trustee of tidelands located within the City's limits, including Newport Harbor; WHEREAS, Section 1(b) of the Beacon Bay Bill authorizes the City to allow third - parties to use the tidelands for commercial purposes for a term not to exceed fifty (50) years; WHEREAS, the City allows marinas, as that term is defined in Newport Beach Municipal Code ( "NBMC ") Section 17.01.030(J)(3), to operate upon the tidelands under either a permit or a lease; WHEREAS, this resolution shall only be applicable to marinas that occupy three thousand square feet (3,000 sf) or more of tidelands and private waterways ( "Large Commercial Marinas "); WHEREAS, The Beacon Bay Bill, California Constitution Article 16, Section 6, NBMC Section 17.60.060(D), NBMC Section 17.60.020(E), and City Council Policy F- 7(D) require the City to receive fair market rent from third parties using the tidelands; WHEREAS, NBMC Section 17.060.060(D) vests the City Council with the exclusive discretion to determine fair market rent based upon the findings of a City - selected appraiser; WHEREAS, an appraisal report by Rasmuson Appraisal Services, dated August 8, 2012, entitled "A Summary Appraisal of Newport Harbor Commercial Tidelands Fair Market Rent Study, Newport Beach CA" and an appraisal report by Netzer & Assoc., dated August 10, 2012, entitled Appraisal Report, Commercial Tidelands, Newport Harbor, Newport Beach, California" were prepared and delivered to the City and have been reviewed and considered by the City Council, which reports are part of the record for this matter; WHEREAS, the Rasmuson and Netzer reports concluded that the current fair market gross revenue percentage rent for tidelands in Newport Harbor is between 17% - 25% for marina slip uses, depending on certain variables; -1- WHEREAS, other existing agreements for use of tidelands in the Newport Harbor have percentage rent rates for marina slip uses ranging between 9% and 40 %, including two County tideland leases with marina rental rates of 20 %; WHEREAS, the Committee and members of the Committee held public outreach meetings with Commercial Marina Operators to solicit their input and participation in the tidelands review process and these meetings afforded the public the opportunity to comment on this matter as well as provided the public information relating to this matter; WHEREAS, the City Council held several study sessions where public input and testimony was taken, including meetings on March 13, 2012 and September 12, 2012; WHEREAS, the City Council has considered all documents and comments in the record in connection with this resolution; WHEREAS, on November 23, 2010 the City Council adopted Resolution No. 2010 -132 implementing a new phased in rent program for the City's on -shore and off- shore moorings and directed that planned rent increases scheduled to occur in 2013 shall only incur upon the City's completion of the tidelands review process; WHEREAS, the City Council on September 12, 2012, following input from the public and upon consideration of all matters in the record relating to this matter, exercised its exclusive discretion pursuant to NBMC Section 17.60.060(D) to recommend a fair market value rent based upon the findings of a City - selected appraiser that the fair market rent for commercial marina tidelands users was to be (in summary) 20% of slip revenue, based upon an index of commercial marinas, converted into a square footage dollar amount; and WHEREAS, all previous resolutions and actions regarding the fair market rent for commercial marinas that are in conflict with the rent established by the City Council in this resolution are hereby repealed. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The Recitals provided above are true and correct and are incorporated into the substantive portion of this resolution. Section 2: The City Council finds pursuant to NBMC Section 17.60.060(D) that the rent provisions contained in the attached Commercial Marina Rent calculations, which are incorporated by reference, provide for the charging of fair market rent and that the rental rate (and adjustments) in the attachments constitute fair market rent for Large Commercial Marinas, which findings are made by the City Council in its exclusive discretion but are based on the information in the appraisals of its City - selected -2- appraisers and, in addition, on other testimony and documents in the record for this matter. The City Council further finds and determines the rent for Large Commercial Marinas located upon City managed tidelands, operating under an annual permit or a lease, shall be set in accordance with the attached Commercial Marina Rent calculations. Section 3: The City Council affirms that the price adjustments set to occur in 2013 for the City's on -shore and off -shore moorings pursuant to Resolution No. 2010- 132 shall be held in abeyance until the City Council completes its open and public review and analysis of commercial piers not already on leases, and residential piers, including rentals of residential piers. Once the City Council's open and public review and analysis are completed, the price adjustments may take effect without further action by the City Council. Section 4: 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. Section 5: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 23rd day of October, 2012. Nancy Gardnr, Mayor ATTEST: - wku� �rw"/ Leilani I. Brown, City Clerk Attachments: Large Commercial Marina Rent Large Commercial Marina Rent Alternative -3- Larvae Commercial Marina Rent A. Beginning on the date a lease or permit is first effective (i.e., the date a lease is executed by all parties or a permit is issued by the City), a Commercial Marina Operator shall pay to the City, on a monthly basis, Rent (as defined below). 1. Rent: Rent shall be calculated on an annual basis as follows: First, the City shall determine the "Target Indexed Rate" as follows: the "Aggregate 18.5% Equivalent Rent" shall be determined, which is comprised of Gross Revenue for Slip Rentals for the preceding calendar year of all marinas included within the Marina Index multiplied by point one eight five (0.185) (i.e., if aggregate Gross Revenue for Slip Rentals is $14,730,000, multiply $14,730,000 by 0.185 to yield an Aggregate 18.5% Equivalent Rent of $2,725,000). If a Commercial Marina Operator of a marina included in the Marina Index fails to provide Gross Revenue for Slip Rentals for any calendar year the City shall use the Commercial Marina Operator's immediate prior Gross Revenue for Slip Rentals as adjusted by the Consumer Price Index ( "CPI "). The Aggregate 18.5% Equivalent Rent shall then be divided by the aggregate Premises' square footage for all marinas included in the Marina Index to determine the Target Indexed Rate for the succeeding twelve (12) months of Rent beginning on March 1 (i.e., if the Aggregate 18.5% Equivalent Rent is $2,725,000 and the aggregate square footage for all waters of marinas in the Marina Index is 1,385,000 square feet, the Target Index Rate would be $1.97 a square foot [$2,725,000 divided by 1,385,000 square feet]). The Premises for the individual Marina Index marinas will be based on known amounts determined by reference to existing City or County permits or leases. The Target Index Rate shall be calculated annually by the City in accordance with this paragraph as soon as practicable after December 31 of each calendar year. For 2013 and 2014, Rent shall remain at the current thirty -six cents ($0.36) a square foot. For a term year beginning March 1, 2021, and thereafter, monthly Rent shall equal the then applicable Target Index Rate, rounded to the nearest cent, times the Premises square footage as set forth in this resolution (i.e., if the Target Index Rate is $1.97 and the Premises is 10,000 square feet the annual Rent would be $19,700). Beginning on March 1, 2015 through February 28, 2021, Rent will be set in accordance with a six - period phase -in procedure as follows: From the effective date, Rent shall be calculated annually each March 1 by reference to the following methodology: Target Index Rate minus the prior calendar year square footage rate divided by the number of years remaining within the six (6) period phase -in plus the prior calendar year square footage rate. An example of the Rent calculation is provided below in Table #1. Table #1 Italicized text denotes assumptions. Assumed scenario for Target Marina Index rate 2015 -2020 suggests Note: increases some years, decreases others. In Table #1, the example assumes that the Targeted Index Rate in 2015 is one dollar and ninety -seven cents ($1.97) per square foot. In the actual calculation and subsequent years, the Targeted Index Rate will be adjusted annually, as set forth above, and may increase or decrease. This increase or decrease shall be reflected in the subsequent calculations using the same methodology as shown above. 2. Marina Index Composition: The Marina Index shall be comprised of the following marinas: 1) 0 o Hb- rT w Wr 3) n e- 4) Lido Yacht Anchorage o4rf - oa NktWq* Newport Dunes Marina 7) Newport Marina 8) Bahia Corinthian Yacht Club 1 0 q 2 RA 2A 2Ea QjM 1 0 0 $ 0.36 $ 0.36 $ 0.36 $ 0.63 $ 0.90 $ 1.19 $ 1.46 $ 1.78 Assumed Index Rate $ 1.97 $ 2.01 $ 2.03 $ 2.01 $ 2.11 $ 2.17 $ 2.22 $ 0.36 5 0.53 $ 0.90 $ 1.19 $ 1.46 $ 1.78 Previous Year's Rent No Charge No Charge Difference (A) d„nog this dunng:his N /A - At $ 1.61 $ 1.38 $ 1.12 $ 0.82 $ 0.65 $ 0.39 Periods Remaining (B) Year Year 6 5 4 3 2 1 full Index Ra[e $ 0.27 $ 0.281 5 0.28 $ 0.27 $ 0.32 5 0.39 Increase for Year (A /B) Italicized text denotes assumptions. Assumed scenario for Target Marina Index rate 2015 -2020 suggests Note: increases some years, decreases others. In Table #1, the example assumes that the Targeted Index Rate in 2015 is one dollar and ninety -seven cents ($1.97) per square foot. In the actual calculation and subsequent years, the Targeted Index Rate will be adjusted annually, as set forth above, and may increase or decrease. This increase or decrease shall be reflected in the subsequent calculations using the same methodology as shown above. 2. Marina Index Composition: The Marina Index shall be comprised of the following marinas: 1) Ardell 2) Bayshores Marina 3) Bayside Marina 4) Lido Yacht Anchorage 5) Harbor Towers Marina 6) Newport Dunes Marina 7) Newport Marina 8) Bahia Corinthian Yacht Club 9) Balboa Yacht Basin -5- The square footage weighting in the Marina Index will be based on the Tidelands square footage used by the Commercial Marina. To be included within the Marina Index, a Commercial Marina Operator must agree to the terms provided in this resolution. The marinas included in the Marina Index may be revised by the City Council at a regular or special meeting in the event that an index marina ceases operation, fails to comply with the terms provided in this resolution, or in the reasonable discretion of the City Council ceases to be meaningful for use in the Marina Index. In that event, the City Council shall strive to select a new marina whose operating characteristics, revenue, and Tidelands square footage is similar to the marina to be replaced. B. Fair Market Adjustment of Rent and Other Fees and Charges: At the Market Adjustment Date, the Rent shall be adjusted to reflect the then - current fair market value, as such value shall be determined by appraisal. Specifically, the City shall retain one (1) independent MAI appraiser to conduct a harbor -wide appraisal of commercial uses. Within thirty (30) calendar days of the City's selection of an appraiser the Commercial Marina Operators included in the Marina Index may retain one (1) independent MAI appraiser to conduct a harbor -wide appraisal of commercial uses. Each party shall pay the costs of their selected appraiser. The City shall not participate in the selection of the Commercial Marina Operators' appraiser. If the Commercial Marina Operators are unable or unwilling to select and retain an appraiser within thirty (30) calendar days of the City's selection of an appraiser, the City may in its sole and absolute discretion select and retain an independent MAI appraiser on behalf of the Commercial Marina Operators to conduct a harbor -wide appraisal of commercial uses. If the two (2) appraisals return with a fair market value that is within five percent (5 %) of each other the two (2) appraisal fair market values shall be averaged to produce the then - current fair market value. For clarity, if one (1) appraiser concludes thirteen percent (13 %) and one (1) appraiser concludes fifteen percent (15 %) the difference in their conclusions is thirteen and 333/1,OOOths percent (13.333 %) and therefore a third appraisal would be needed. If the two (2) appraisers should fail to agree on the fair market value, and the difference between the two (2) appraisals exceeds five percent (5 %), then the two (2) appraisers thus appointed shall mutually appoint a third MAI designated appraiser, and in case of their failure to agree on a third appraiser within thirty (30) calendar days after their individual determination of the fair market value, either party may apply to the Presiding Judge of the Superior Court for Orange County, requesting said Judge to appoint the third MAI designated appraiser. The costs of the third appraiser, if any, shall be split equally between the Lessor and the Lessees included in the Marina Index. The third appraiser so appointed shall meet and confer with the two (2) other appraisers and then conduct its own analysis to determine the then - current fair market value within sixty (60) calendar days of their appointment and the average of the fair market value per square foot as set forth in the appraisals of the go two (2) closest appraisers shall be used as the then - current fair market value. All MAI appraisers appointed or selected pursuant to this subsection shall have at least ten (10) years experience appraising Tidelands in the Southern California area and shall be free of conflicts (i.e., no appraisers shall rent a boat slip or office space from Lessor or Lessees, etc.). C. To be included within the Marina Index, a Commercial Marina Operator must agree to be bound by the following terms: (1) Slip Rental Documentation: By February 1, 2015, a Commercial Marina Operator shall provide City with Gross Revenue for Slip Rentals and the slip rental rate schedule for the most recent calendar year and the two (2) preceding calendar years. For every subsequent calendar year, a Commercial Marina Operator shall provide the City its Gross Revenue for Slip Rentals and the slip rental rate schedule for the prior calendar year by February 1st of every year. The Gross Revenue for Slip Rentals shall be certified by the Commercial Marina Operator and its external auditor to be true and accurate to the City for purposes of calculation of the Marina Index. At the Commercial Marina Operator's option, the Gross Revenue for Slip Rentals may be provided directly to the City or to the City's designated certified public accountant ( "CPA ") for such purposes. The City's designated CPA shall exercise independent professional judgment and shall not be used by the City for any other purposes. The City shall use its best efforts to maintain such Gross Revenue for Slip Rentals information confidential. (2) Audit: If Gross Revenue for Slip Rental is submitted to City, City may, or if Gross Revenue for Slip Rentals is submitted to City's designated CPA, the CPA may, in its sole and absolute discretion, at any and all reasonable times, examine and audit Books and Records, financial statements, and documentation, without restriction, for the purpose of determining the accuracy of the Gross Revenue for Slip Rentals for the Premises reported to the City or the City's designated CPA for the prior year, and the accuracy of the Rent paid to City. If the Commercial Marina Operator's business operations conducted within or from the Premises are part of a larger business operation of the Commercial Marina Operator, and any part of the Books and Records, financial statements and documentation is prepared only for the larger operation, and not solely for the business operations of the Premises, then the City shall also have the right to examine and audit that part of the Books and Records, financial statements, and documentation of the larger business operation. In the event the Commercial Marina Operator does not make available the original Books and Records, financial statements, and documentation at the Premises or within the limits of Orange County, Commercial Marina Operator shall pay all necessary travel expenses incurred by City -7- (including, without limit, the cost of City's agent's time) in conducting an audit at the location where Books and Records are maintained. If the audit reveals a discrepancy in the Gross Revenue for Slip Rentals reported to City of ten percent (10 %) or less, City shall pay the cost of the audit. If the audit reveals a discrepancy in the Gross Revenue for Slip Rentals reported to City of greater than ten percent (10 %) the Commercial Marina Operator shall pay the cost of the audit. D. For the purposes of this rent methodology the following terms have the following meanings: (1) Books and Records means full, complete, accurate and proper books, records and accounts of all business, use or occupation, or any combination thereof, transacted, arranged or performed, in whole or in part, on, from or for goods, services or events from or related to the Premises, whether by the Lessee or by a sublessee, licensee, concessionaire or other party, consistently applied, which shall include equipment to record all sales at the time of transactions and shall also include, without limit, income, sales and property tax returns and on a cash basis method of accounting information. (2) City means the City of Newport Beach. (3) Commercial Marina Operator(s) means a person or entity that rents Tidelands from the City under either a permit or a lease for the operation of a Large Commercial Marina. (4) Gross Revenue for Slip Rentals means all receipts of every kind and nature, whether for cash, credit or barter, received /due for the rental or use of a slip, dock, or pier on the Premises. Without limiting the breadth of the prior sentence, Gross Revenue for Slip Rentals shall include, without limitation, receipts of every kind and nature derived from any promotion, package deal, service, or other item that is associated in any way with the rental or use of a slip, dock, or pier on the Premises, excluding pass - through of direct third -party charges (e.g., electricity, cable TV, etc.) without markup by the Commercial Marina Operator. For purposes of determining Gross Revenue for Slip Rentals any fixed, annual, monthly and /or recurring charge that a person or entity is required to pay shall be counted as part of the Gross Revenue for Slip Rentals. Gross Revenue for Slip Rentals shall not be offset or reduced for any reason, including, but not limited to, the payment of taxes, fees, repairs, maintenance, construction, or inability or failure to collect any cash, credit, or barter due for the use of a slip, dock, or pier on the Premises. (5) Large Commercial Marina means a "marina" as defined in Newport Beach Municipal Code Section 17.01.030(J)(3), which occupies three thousand square feet (3,000 sf) or more of Tidelands and Private Waterways. (6) Market Adjustment Date means March 1, 2023 and every tenth (10th) anniversary year thereafter. (7) Premises means those Tidelands which are subject to the applicable permit/lease and are more particularly described and depicted in the applicable permit/lease, excluding any Private Waterways and improvements. (8) Private Waterways means privately held submerged lands. (9) Tidelands means certain tidelands and submerged land (whether filled or unfilled), located in the City of Newport Beach, County of Orange, State of California granted to the City of Newport Beach, as trustee, by the State of California pursuant to the Tidelands Grant. (10) Tidelands Grant means uncodified legislation related to the State of California's grant of certain rights in the Tidelands to the City of Newport Beach, including, without limitation, the Beacon Bay Bill (Chapter 74 of the Statutes of 1978, as amended [citations omitted]). In Large Commercial Marina Rent Alternative A. Alternative Rent: As an alternative rent methodology, commencing with March 1, 2015, on the date a lease or permit is first effective (i.e., the date a lease is executed by all parties or a permit is issued by the City), a Commercial Marina Operator shall pay to the City, on a monthly basis, the greater of Base Rent or Percentage Rent (as defined below). For the years beginning March 1, 2013 and March 1, 2014, Rent shall remain at the current thirty -six cents ($0.36) a square foot. (1) Base Rent Phasing: "Base Rent' shall be charged on a per square foot basis of the Premises, at the rate of one dollar and forty -five cents ($1.45) a square foot, and shall be phased in as follows: (2) Percentage Rent Phasing: "Percentage Rent' shall be phased in as follows and shall equal eighteen and half percent (18.5 %) of annual Gross Revenue for Slip Rentals: a 3.40% o 3.40% e 3.40% e 5.92°% 8.43% 210 f& 10.95% 13.47% o°° 15.98% 18.50% a 18.50% Target Rate Previous Year's Rate Difference (A) Periods Remaining (8) Increase for Year (A /0) c°rrer.; process ,enao-s -no c`.ange Caren: prccass repairs -ro change 18.50% 18.50% 18.50% 1A 18.50% 18.50% 18.50% 3.40% 5.92% 8.43% 113.47% 15.98% N /A -At Full 18.5% 15.10% $ 0.13 $ 0.10 $ 0.05 $ 0.03 G 51 4 2 1 2.52% 2.52% 2.52% 2.5Z . 2.52% -10- B. Periodic Adjustments of Base Rent: From 2015 through 2020, Base Rent shall be adjusted annually by the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPI -U), Los Angeles- Riverside- Orange County region. Beginning on March 1, 2021, Base Rent shall be increased or decreased annually to a sum equaling seventy -five percent (75 %) of the Large Commercial Marina Index rate. C. Fair Market Adiustment of Percentage Rent: At the Market Adjustment Date, the Percentage Rent shall be adjusted to reflect the then - current fair market value, as such value shall be determined by appraisal. To avoid duplication and unnecessary expense, the appraisal performed for the Marina Index at the Market Adjustment Date shall be used for this fair market adjustment appraisal requirement. D. Reconciliation of Rent: At the end of every calendar year, City shall perform a reconciliation of the Rent paid by the Commercial Marina Operator to City to ensure the correct Rent was paid. The City shall credit the amount by which Rent actually received exceeds the amount of Rent determined to have been due and payable for such calendar year. A credit, if applicable, shall be made to the next installment of Rent due. However, nothing in this section shall require the City to provide a credit that would cause the Commercial Marina Operator to pay less than Base Rent for the calendar year being reconciled and, in such case, no credit will be due or applied. If the amount of Rent due for a calendar year is more than the Rent paid by the Commercial Marina Operator prior to reconciliation, then the Commercial Marina Operator shall pay the difference to City. The Commercial Marina Operator shall pay City, within five (5) days following such determination, the full amount of Rent determined to have been due for such calendar year. E. Reporting Requirements: To use this alternative rent methodology, a Commercial Marina Operator must agree to be bound by the following terms: (1) Slip Rental Documentation: By February 1, 2015, a Commercial Marina Operator shall provide the City with Gross Revenue for Slip Rentals and the slip rental rate schedule for the most recent calendar year and the two (2) preceding calendar years. For every subsequent calendar year, a Commercial Marina Operator shall provide the City its Gross Revenue for Slip Rentals and the slip rental rate schedule for the prior calendar year by February 1st of every year. The Gross Revenue for Slip Rentals shall be certified by the Commercial Marina Operator and its external auditor to be true and accurate to the City. The City shall use its best efforts to maintain such Gross Revenue for Slip Rentals information confidential. (2) Audit: The City may in its sole and absolute discretion, at any and all reasonable times, examine and audit Books and Records, financial SEE statements, and documentation, without restriction, for the purpose of determining the accuracy of the Gross Revenue for Slip Rentals for the Premises reported to the City for the prior year, and the accuracy of the Rent paid to City. If the Commercial Marina Operator's business operations conducted within or from the Premises are part of a larger business operation of the Commercial Marina Operator, and any part of the Books and Records, financial statements and documentation is prepared only for the larger operation, and not solely for the business operations of the Premises, then the City shall also have the right to examine and audit that part of the Books and Records, financial statements, and documentation of the larger business operation. In the event the Commercial Marina Operator does not make available the original Books and Records, financial statements, and documentation at the Premises or within the limits of Orange County, Commercial Marina Operator shall pay all necessary travel expenses incurred by City (including, without limit, the cost of City's agent's time) in conducting an audit at the location where Books and Records are maintained. If the audit reveals a discrepancy in the Gross Revenue for Slip Rentals reported to City of ten percent (10 %) or less, City shall pay the cost of the audit. If the audit reveals a discrepancy in the Gross Revenue for Slip Rentals reported to City of greater than ten percent (10 %) the Commercial Marina Operator shall pay the cost of the audit. F. For the purposes of this alternative rent methodology the following terms have the following meanings: (1) Books and Records means full, complete, accurate and proper books, records and accounts of all business, use or occupation, or any combination thereof, transacted, arranged or performed, in whole or in part, on, from or for goods, services or events from or related to the Premises, whether by the Commercial Marina Operator or by a sublessee, licensee, concessionaire or other party, consistently applied, which shall include equipment to record all sales at the time of transactions and shall also include, without limit, income, sales and property tax returns and on a cash basis method of accounting information. (2) City means the City of Newport Beach. (3) Commercial Marina Operator(s) means a person or entity that rents Tidelands from the City under either a permit or a lease for the operation of a Large Commercial Marina. (4) Gross Revenue for Slip Rentals means all receipts of every kind and nature, whether for cash, credit or barter, received /due for the rental or -12- use of a slip, dock, or pier on the Premises. Without limiting the breadth of the prior sentence, Gross Revenue for Slip Rentals shall include, without limitation, receipts of every kind and nature derived from any promotion, package deal, service, or other item that is associated in any way with the rental or use of a slip, dock, or pier on the Premises, excluding pass - through of direct third -party charges (e.g., electricity, cable TV, etc.) without markup by the Commercial Marina Operator. For purposes of determining Gross Revenue for Slip Rentals any fixed, annual, monthly and /or recurring charge that a person or entity is required to pay shall be counted as part of the Gross Revenue for Slip Rentals. Gross Revenue for Slip Rentals shall not be offset or reduced for any reason, including, but not limited to, the payment of taxes, fees, repairs, maintenance, construction, or inability or failure to collect any cash, credit, or barter due for the use of a slip, dock, or pier on the Premises. (5) Large Commercial Marina means a "marina" as defined in Newport Beach Municipal Code Section 17.01.030(J)(3), which occupies three thousand square feet (3,000 sf) or more of Tidelands and Private Waterways. (6) Market Adjustment Date means March 1, 2023 and every tenth (10th) anniversary year thereafter. (7) Premises means those Tidelands which are subject to the applicable permit/lease and are more particularly described and depicted in the applicable permit/lease, excluding any Private Waterways and improvements. (8) Private Waterways means privately held submerged lands. (9) Rent means both Base Rent and Percentage Rent. (10) Tidelands means certain tidelands and submerged land (whether filled or unfilled), located in the City of Newport Beach, County of Orange, State of California granted to the City of Newport Beach, as trustee, by the State of California pursuant to the Tidelands Grant. (11) Tidelands Grant means uncodified legislation related to the State of California's grant of certain rights in the Tidelands to the City of Newport Beach, including, without limitation, the Beacon Bay Bill (Chapter 74 of the Statutes of 1978, as amended [citations omitted]). -13- STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2012 -92 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 23rd day of October, 2012, and that the same was so passed and adopted by the following vote, to wit: Ayes: Hill, Rosansky, Selich, Henn Noes: Curry, Daigle, Mayor Gardner IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 24th day of October, 2012. ko". � City Clerk Newport Beach, California (Seal)