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MEETING DATE:
TIME:
PLACE:
Roll Call and Introductions
CONSENT CALENDAR
CITY OF NEWPORT BEACH
ECONOMIC DEVELOPMENT COMMITTEE
AGENDA
Wednesday, July 20, 2005
8:00-9:00 A.M. Please arrive 5 min. prior
City of Newport Beach Council Chambers
(All matters listed under CONSENT CALENDAR are considered to be routine and will all be approved by
one motion in the form listed below. The EDC members have received detailed staff reports on each of
the items recommending an action. There will be no separate discussion of these items prior to the time
the Committee votes on the motion unless members of the Committee, staff, or the public request
specific items to be discussed and/or removed from the Consent Calendar for separate action.)
1. Approval of Minutes of June 22, 2005 (Attachment)
2. Project Status Report (Attachment)
ITEMS REMOVED FROM THE CONSENT CALENDAR
DISCUSSION ITEMS
1. Subcommittee Report: Fiscal Impact Analysis of General Plan Alternatives — Mike McNamara,
Chair (Attachments: Committee Report; Committee Summary Chart; Fiscal Impact Report- May
12, 2005;
Harbor Commission Letter– 9-10-03)
2. EQAC Representative's Report
ITEMS FOR A FUTURE AGENDA
PUBLIC COMMENTS
ADJOURNMENT
NEXT EXECUTIVE COMMITTEE MEETING: Wednesday, August 3, 2005
8:00 A.M. – NEWPORT BEACH CHAMBER OF COMMERCE
***Note Changed Meeting Date Below***
NEXT REGULAR MEETING: Wednesday, August 17, 2005
8:00-9:00 A.M. - CITY COUNCIL CHAMBERS
Benchmark data reports
BID ADMINISTRATION
ID Administration and
IDs/Consultant
BID Administrator & City staff
Ongoing support for BID
Ongoing.
Monitoring of sub -recipients
Coordination
Trimble
implemented new collection
activities. Contract renewal
completion, Summer
ongoing.
Balboa Village Streetscape –
Stein/Trimble
policy—excessive delinquencies
with BIDS INC (aka
July 2006
Housing AdministrationTrimble/B.
Nichols
handled by City Attorney's ofc.;
Cathimarie's Inc.)
Ongoing.
Staff continues to coordinate
Consultant
Small Claims Court if required.
affordable senior housing
with County agencies and
Balboa Village BID
Trimble
BID renewed as of July 1, now
BID working on existing
Ongoing.
respond to public inquiries
coordinated with City's fiscal
events and marketing
regarding affordable housing.
year
rograms.
Corona del Mar BID
Berger
Last BID Board meeting held
Next BID meeting July 28th.
Ongoing.
BID renewal at August
June 23rd. Discussion of public
Council meetings.
works project continuing,
renewal, and elections.
Marine Avenue BID
Berger
Last meeting held June 16th.
Next BID meeting July 21.
Ongoing.
Overview of streetscape
project, marketing, and flags for
July 4th.
Restaurant Association BID
Trimble
On-going marketing program.
Next meeting 08/2005.
Ongoing.
Additional budget request to CC
approved June 28th.
COMMUNITY DEVELOPMENT ADMINISTRATION
CDBG AdministrationTrimble/Consultant
Selich/Berger
Consolidated Plan and Action
Send contracts to Public
Ongoing.
Monitoring of sub -recipients
Amortization / Incentive Program
approved by CC 5/10/2005.
Service providers. Begin
completion, Summer
ongoing.
Balboa Village Streetscape –
Stein/Trimble
Balboa Inn expansion started
work on CAPER.
July 2006
Housing AdministrationTrimble/B.
Nichols
Monitoring existing affordable
Construction of 120
Ongoing.
Staff continues to coordinate
Consultant
housing units resulted in return
affordable senior housing
with County agencies and
of a number of units to
units at lower Bayview site
respond to public inquiries
affordable status.[underway.
January 2006.
regarding affordable housing.
Balboa Peninsula
Balboa Peninsula Sign OverlayBerger/Trimble
Selich/Berger
Amortization Incentive ProgramFry's
Market plans submitted.
Ongoing.
Overlay will be replaced by new
Amortization / Incentive Program
closed out June 2004.
First reimbursement paid
completion, Summer
Citywide sign code.
Balboa Village Streetscape –
Stein/Trimble
Balboa Inn expansion started
Undergrounding and methane
July 2006
Phase III
09/2004. OCSD pump station
capture projects Fall 2005. Phase
construction underway.
II January 2006.
CORONA del MAR
Corona del Mar Vision Plan
Selich/Berger
Median improvement projectConstruction
underway.
Median Replacement
almost complete.
completion, Summer
05.
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Benchmark data reports
MARINE AVENUE
Marine Avenue Public
Berger
Installation of decorative
Bench donor plaque program
Bench plaque program
Park Avenue Bridge seismic
Improvements Plan
Sinacori
streetlights, benches, receptacles,
underway by BIIA. Flags installed for
donation ongoing;
retrofit / replacement project on
tree well treatments and new trees
July 4th.
waiting for donor list
hold. Sidewalk replacement on
complete.
Caltrans project.
from BIIA.
hold.
MARINER'S MILE
Mariner's Village PublicBerger/T.
Brine/M.
MMBOA discussions w/PW
2nd Phase design on hold, pending
Ongoing.
Meeting in August `05 to discuss
Improvements Project
Sinacori
staff re: Caltrans safety lighting
Council/GP planning discussions.
master planning for MM.
plan for Old Newport Blvd.
Continued discussion w/staff re:
through Riverside Dr..
Caltrans project.
Mariner's Mile BOA
urrelBerger
eeting held July 13th. Update
Next meeting to be held August
Ongoing activity.
MMBOA interested in
Strategic Planning
Subcommittee /
provided on General Plan
10th.
Ongoing, as part of
continuation of MVPIP
Wood/Berger
Alternatives workshop.
process to continue with
GPU process.
improvements and planning;
Update process.
GPAC/EDC.
extension of palm trees toward
Image Enhancement &
Subcommittee /
Wayfinding & Directional
Final Mixmaster signs to be
both bridges; relinquishment of
Marketing
Berger
Signage Program: pilot project
installed ASAP. Final design
CH through MM; and waterfront
for "Mixmaster area" complete.
concepts for directional
oardwalk.
EDC ACTIVITIES
Attraction and Retention
EDC staff
Newport Lexus project in Plan
Continuing discussions w/
Ongoing.
Check; scheduled to begin
auto dealers; continuing
demolition 7/18; tentative
construction to begin in
October.
Strategic Planning
Subcommittee /
GPU Fiscal/Economic studies
ED strategic planning
Ongoing, as part of
Wood/Berger
being input into General Plan
process to continue with
GPU process.
Update process.
GPAC/EDC.
Image Enhancement &
Subcommittee /
Wayfinding & Directional
Final Mixmaster signs to be
Marketing
Berger
Signage Program: pilot project
installed ASAP. Final design
for "Mixmaster area" complete.
concepts for directional
signage to be brought to CC
for review & approval in
September. Monument
signage design to CC as well.
Hotels
Subcommittee
Wood/Trimble
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ECONOMIC DEVELOPMENT COMMITTEE
CITY OF NEWPORT BEACH
ECONOMIC DEVELOPMENT COMMITTEE
General Plan Update Alternatives
Sub -Committee report
July 15, 2005
NARRATIVE REPORT ON GENERAL PLAN OPTIONS
INTRODUCTION
On June 22, 2005, the Economic Development Committee established a sub -committee to review the
proposed land use alternatives for the general plan update developed by the General Plan Advisory
Committee (GPAC). The General Plan update is intended to guide the development of the City until the
year 2025. The charge of the committee was to examine the Options and report back to the entire
Economic Development Committee for consideration and adoption of formal recommendations to GPAC
and the City Council. The sub -committee members were Jim Donnell, Carol Hoffman, Jeannette Thomas
and Michael McNamara, chairman. They were assisted in their work by Sharon Wood, Assistant City
Manager and George Berger, Program Manager. This report and the attached "Summary of
recommendations and fiscal impact" are presented to the EDC for consideration. The sub -committee
makes the following recommendations to the Economic Development Committee.
GENERAL RECOMENDATIONS
1. The Economic Development Committee review the sub -committee recommendations and adopt or
modify them for referral to the General Plan Advisory Committee and City Council as the EDC input to
the General Plan Update process.
2. The Economic Development Committee take note of the Harbor Commission position as to the
economic importance of marine related activity to the financial well being of the City and the need to
preserve Marine related land uses.
3. The Economic Development Committee recommend that the City adopt a sustainable growth plan for
the harbor and adopt a proactive approach to establishing visitor guest slips as a part of the general plan up
date by re -negotiating the tidelands slip permits into lease agreements in several planning areas such as
Lido Village North, Mariners Mile and Marina Park and requiring a certain percentage of slips be allocated
to visiting boaters.
4. The Economic Development Committee recommend the inclusion of Marina Park in the general plan
update if it would not unduly delay the process. It is clear that land use decisions in the entire general plan
update do have a significant impact on the use of the harbor. The sub -committee views the Marina Park
project as a potential source of visitors slips to enhance marine tourism which has no traffic impact on
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ECONOMIC DEVELOPMENT COMMITTEE
citizens. Visitor slips are almost non-existent outside of yacht clubs
GENERAL DISCUSSION
The City is projected to have potential increased annual revenues somewhere between $317,000 and $10.7
million per year depending upon the Options selected. Lodging and retail sales are projected to be the
largest contributors to increased revenue. We first discussed some major over-riding issues that affected
all areas. Our conclusions were guided by the principles discussed below.
1. Overall changes to the general plan should show an overall positive fiscal
impact on the City, not necessarily in each sub -area.
2. The citizens have spoken and they do not want increased traffic that will affect them in
the revised general plan. Therefore the "true maxim" Option will not be the
preferred Option unless there are other over-riding issues or mitigating factors.
3. It may be possible to allow more traffic in one or two areas in exchange for substantial
fiscal benefit that results in less overall potential traffic impact on residents.
4. All of the recommendations regarding the general plan require balancing trade offs
between increased revenue, increased traffic, environmental concerns and quality of
life concerns.
5. The sub -committee notes the comments of the Harbor Commission regarding the
Marine Industry and the harbor as an economic engine for the City and the need to
preserve marine uses in the harbor. The sub -committee makes recommendations
to preserve and enhance those uses.
6. The sub -committee notes that the financial data used is three years old from the
2002-03 fiscal year budget. The sub -committee suggests that staff examine the cost
and feasibility of updating the numbers to the newly adopted 2005-06 fiscal year
budget when the model is used to analyze the preferred land use plan
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ECONOMIC DEVELOPMENT COMMITTEE
SPECIFIC RECOMMENDATIONS BY PLANNING AREA
AIRPORT BUSINESS AREA
The addition of 6,600 residential units under Option 3 appears to be excessive for the area because of the
65 CNEL restriction, height restrictions, land use restrictions and CC&R's. Residential use is a good idea
for the area along with a mixed use concept but with less housing. By concentrating increased traffic in
the airport area, the City is projected to have a 14% increase in peak hour traffic as a trade off for a $2.8
million increase in annual revenue. The increase in traffic concentrated in an area with good arterials and
three major freeways appears to be a good trade off for the additional revenue. The sub -committee
recommends Option 2 with a reduction of the potential 6,600 residential units to an amount consistent with
the ability of the area to accommodate growth.
BALBOA VILLAGE
The sub -committee does not support the addition of 300 hotel rooms in Option 5. We conclude that it is
impractical for the area. Options 1, 2, and 3 provide for 34 infill hotel rooms which we feel is more
consistent with the scale of the area. . Thus the sub -committee supports Options 1, 2 and 3 and rejects
Options 4 & 5.
BANNING RANCH
The idea of a large hotel or a resort overlooking a sewer plant is not realistic and does not make economic
sense. A mix of housing with local commercial would be a better use of the upper area with possible use of
some of the lower area as open space and a tie in to trails. The mix of housing would provide a positive
fiscal benefit to the City and provide the fiscal resources to restore the open space. The purchase of the
entire property for open space by the City would be prohibitive and would utilize all of the potential
increases in net revenue for debt service on this single project. The sub -committee recommends Option 2.
CANNERY VILLAGE WEST
There is an ongoing need for the retail services now in place to serve the area and the potential for
increased revenues to the City are minimal. The sub -committee recommends no change
to the existing general plan.
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ECONOMIC DEVELOPMENT COMMITTEE
CANNERY VILLAGE EAST
The proposed increased mix use will have a mutually beneficial relationship with the commercial and keep
it viable a well as being served by the commercial with minimal traffic impact. The sub -committee
recommends Option 1.
CORONA DEL MAR
The existing Corona Del Mar commercial strip is a very viable, pedestrian oriented, retail area. It provides
a net benefit to the City and brings in revenue from outside the City. The sub -committee recommends no
change to the existing_ general plan.
LIDO ISLE
The Option to the existing general plan regarding Lido Isle does not have economic issues but is primarily
a lot line adjustment issue and the sub -committee makes no recommendation.
LIDO VILLAGE NORTH
Option 1 and Option 2 both include mixed use development although Option 1 includes a hotel space.
Because of the hotel, both Options 1 and 2 provide substantial economic benefit to the City of
approximately $1.3 million annually. The committee encourages the modification of the tideland slip
permits to sub -leases to allow for some City revenue as well as visitor slips to foster marine tourism
which has no traffic impact. The committee recommends Option 1.
LIDO VILLAGE SOUTH
Option 1 would increase the retail development potential and reduce office space while Option 2 would
have mixed use residential and retail space and no new office space. Both of the Options are positive
fiscally, however, Option 2 performs much better at $78,000 per year in revenue. The sub -committee
recommends Option 2
MARINER'S MILE
The Harbor Commission in a letter to the City dated September 10, 2003 pointed out that the marine
industry accounts for over 1,000 jobs and generates nearly $2.7 million in annual net revenues to the City
of Newport Beach. This places marine revenues in 3rd place in the category of business that provides net
revenue to the City behind lodging 1St and retail 2nd. The marine industry produces 5% of total sales tax
revenues, ahead of light industrial and hotels. It also produces 5% of gross City revenues which is behind
lodging but still ahead of light industrial and service commercial. The fiscal impact model shows the
marine industry revenues growing only $0.3 million over 22 years with no change in expenditures over
the same 22 year period yet maintaining their net positive balance of the City of approximately $3 million
staying third in net revenue producer behind lodging and retail. They deem this a "passive no growth
alternative".
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ECONOMIC DEVELOPMENT COMMITTEE
The Harbor Commission further urged the City to avoid the passive no growth alternative for marine
industry related uses and avoid the "potentially catastrophic decline in the role of marine industry uses as a
Newport Beach economic engine". The Commission recommended that the City (1) adopt a proactive
sustainable growth plan for the harbor (2) review the revenue sources allocated to marine uses in the model
and (3) add marine tourism uses and revenue sources to marine uses in the general plan update and (4)
expand consideration of tidelands uses to new water based uses. These Options would conserve key
waterfront locations and important marine uses, enhance user -pay public access... improve the harbor
environment... and secondary economic benefits to the City and harbor.
A number of the current developments in Mariner's Mile entered into agreements with the City to devote
at least 40% of their property to marine industry uses in exchange for increased densities when their
properties were developed. These uses include restaurant as well as, boat sales, haul out, commissioning
of new boats, marine electronics and the like. The elimination of the 40% agreements has been requested
as a part of the general plan updates however a majority of the sub- committee does not support the
removal of that agreement.
The sub -committee takes note of the Harbor Commission's point of view and has concluded that: (1)
The long term financial interest of the City is best accomplished by preserving the
City's Marine Services and maintaining the bay side of Mariner's Mile as recreational
and Marine Commercial,
(2) Residential housing is not appropriate for the bay side of Mariner's Mile because the
property will be lost forever for Marine related services with minimal economic
benefit in the first year only.
(3) A hotel on the water side of Pacific Coast Highway could be a financial vehicle to
support public access, support the construction of the proposed walk way and could
provide a location and funding source for additional visiting boater slips
(4) The proposed housing and mixed use could be considered on the inland side of the
Pacific Coast Highway however we urge the use of horizontal mixed use along the
highway.
The sub -committee recommends that the City consider preserving the Mariners Mile area for marine
industry uses, not eliminate the 40% marine related requirement, renegotiate the tideland slip permits to
sub lease aizreements with consideration for visitor slius and some additional revenue to the Citv. With the
above recommendations the sub -committee supports Option 2.
MCFADDEN SQUARE EAST
The addition of a hotel for this area does not appear to be practical because of traffic and parking
problems. The existing general plan provides for mixed use and additional condominiums. The sub-
committee recommends no change to the existing general plan.
MCFADDEN SQUARE WEST
The proposed option allows the reuse of properties occupied by commercial for mixed -use -buildings that
integrate housing above ground level retail uses, with overnight accommodations (bed and breakfast, small
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ECONOMIC DEVELOPMENT COMMITTEE
scale boutique hotel.) The option has a positive fiscal impact for the City. The sub -committee
recommends Option 1.
NEWPORT CENTER FASHION ISLAND
The committee has noted that the projected retail revenue from the Fashion Island is underestimated as a
result of the technical aspects of the fiscal impact model. The current model divides property zoned as "
commercial" into 40% "service commercial" and 60% "retail commercial" throughout the City without
reference to area. Service commercial generates a lower sales tax ratio than retail commercial. This
assumption is not reasonable for Fashion Island and tends to understate the sales tax revenue from the area
that has almost all retail commercial. Staff will work with the consultants to adjust the sales tax revenue
estimates from Fashion Island in the next update of the economic model
The committee notes that Option 1 provides for the addition of 480 hotel rooms and 1,100 housing units
with limited increase of retail space and office space. The estimated $3.9 million increase of annual net
revenue to the City represents almost 40% of the potential increases in the entire general plan process.
Almost 98% of this increase is related to the increased lodging (hotel rooms). The sub -committee supports
the construction of a large hotel or additional hotel rooms. The increased traffic from hotels does not
occur at peak travel times and thus the traffic impact is mitigated to some extent. The increase in housing
units by 1,100 units appears to be excessive and the sub committee concludes that a lesser amount may be
appropriate. The sub -committee recommends Option 1 with a reduction in housing from 1,100 units to
an amount consistent with the area's ability to accommodaterg owth..
OLD NEWPORT BOULEVARD
The existing general plan provides for limited expansion of retail with infill of adjoining residential
neighborhoods consistent with current zoning. The sub -committee recommends no changes to the existing_
general plan.
WEST NEWPORT HWY & ADJOINING RESIDENTIAL
The existing general plan provides for little additional development in Block A and a modest fiscal
benefit. Option 1 provides for some mixed use residential and commercial with some reduction in the
existing lodging rooms in the area. This results in a negative fiscal impact of $669,000 per year and
Option 2 results in a $1.4 million negative impact on the City. Options 3 & 4 are so similar with minimal
economic difference between them. The sub -committee recommends either Option 3 or Option 4 on Block
a
Block B has no proposed changes to the general plan.
Block C proposes some vertical mixed use 2-3 story at the two intersections with traffic lights to provide
commercial nodes to support the surrounding housing. The Option 2 provides for the addition of a new
hotel that the committe did not feel was practical. The committee concluded that the maintenance of the
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ECONOMIC DEVELOPMENT COMMITTEE
existing affordable hotel rooms in the area was beneficial both economically and socially. The sub-
committee recommends Option 4 for Block C.
MOBILE HOME REDEVELOPMENT
The sub -committee supports the redevelopment of the mobile home park as open space and parklands that
are integrated with the Orange County River Park, or parking and other staging facilities. The sub-
committee recommends either Option 3 or Option 4.
WEST NEWPORT INDUSTRIAL
The sub -committee approached the analysis of fiscal impact on a City wide basis. It is clear that not all
areas can be positive and in fact the City may decide to accept some negative for other reasons. All of the
Options proposed for this area are between $1.1 million and $1.6 million negative primarily because of the
fact that Hoag Hospital is a non-profit institution and does not pay property taxes. The committee came to
the conclusion that Hoag Hospital was an important City institution, beneficial to the community, that
should be enhanced and supported to the greatest extent possible and that our task was to minimize the loss
of revenue to the City. We concluded that Option 3 addressed the strong demand for medical office
without the excessive $428,000 loss to the City of Option 2. The difference is a potential $1.6 million loss
for Option 2 versus a potential $1.1 loss for Option 3. Option 3 provides for a mix of housing types that
could provide more housing for employees of the hospital and would tend to reduce traffic. The
committee generally supported option 3 but were advised that the Newport Technology Center is a
research and development property with some commercial office allowed. There is probably a market for
conversion to medical use, which is not accommodate in Option 3. The committee viewed this as a special
issue to be examined. The additional reason that the committee supported Option 3 is that it will allow not
only additional office space but continuing industrial space that could maintain the viability of Marine
related activities that are not dependent upon a water location. The sub -committee recommends Option 3.
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Airport Business Area
2
$2,809,528
$80,465
($233,614)
$141,331
($42,868)
$2,984,052
$0
$50,632
($88,402
($82,068)
Traffic Impact
16%
108,771
Subarea
1,2,3
($93,547)
($70,558)
($36,041)
$4,530
$0
$0
$0
$5,880
$0
$2,642
(324)
-2%
18,504
Banning Ranch
2
Yr. Net
$213,592
$0
$34,389
$0
$489,691
$0
Service
($33,792)
($7,606)
Daily trip
-24%
22,335
Cannery Village West
Option
Revenues
Housing
Office
Retail
Industrial
Lodging
Marine
Commercial
Institutional
Public
increases
0%
3,601
Airport Business Area
2
$2,809,528
$80,465
($233,614)
$141,331
($42,868)
$2,984,052
$0
$50,632
($88,402
($82,068)
17,623
16%
108,771
Balboa Village
1,2,3
($93,547)
($70,558)
($36,041)
$4,530
$0
$0
$0
$5,880
$0
$2,642
(324)
-2%
18,504
Banning Ranch
2
$702,731
$213,592
$0
$34,389
$0
$489,691
$0
$6,457
($33,792)
($7,606)
(5,319)
-24%
22,335
Cannery Village West
Ext GP
($746)
($2,590)
$0
$1,427
$0
$0
$0
$298
$0
$119
0
0%
3,601
Cannery Village East
1
$66,862
$31,836
$49,612
$26,367
($39,144)
$0
$0
($1,461)
$0
($348)
1,218
12%
10,239
Corona Del Mar
Ext GP
$129,552
$86,603
($34,302)
$54,370
$0
$0
$0
$15,827
$0
$7,054
0
0%
48,807
Lido Isle
NR
$64,569
$63,271
$0
$0
$0
$0
$0
$0
$0
$1,298
0
0%
n/a
Lido Village North 1452
1
$1,368,587
$17,848
$49,014
$54,089
$0
$1,301,961
($1,893)
$0
($52,432)
$0
3,191
51%
6,229
Lido Village South 1453
2
$78,307
$14,384
$12,832
$41,972
$0
$0
$6,958
$0
$2,161
$0
1,655
28%
5,989
Mariner's Mile
2
$74,836
($53,171)
($26,400)
$11,662
$132
$142,488
$0
$4,983
$0
($4,858)
7,710
15%
49,783
McFadden Square East
Ext GP
$483,565
$20,724
($34,509)
$17,422
$4,999
$483,568
$0
$7,169
$0
($15,808)
0
0%
3,955
McFadden Square West
1
$1,045,853
$229
$888
$32,123
$0
$1,052,526
$0
$1,361
$0
($41,274)
1,705
40%
4,221
Newport Center/Fashion
1
$3,931,206
$51,529
($118,438)
$264,749
$0
$3,839,177
$0
$68,599
($51,672)
($122,738)
22,734
21%
109,174
Old Newport Blvd.
Ext GP
$84,552
($53,171)
($26,400)
$11,662
$132
$142,488
$0
$4,983
$0
$4,858
0
0%
8,980
W. Newport Hwy. A
3,4
$2,406
$3,080
$0
$0
$0
$0
$0
($492)
($182)
8,241
W. Newport Hwy. C
4
$342,926
$352
$0
$1,189
$0
$357,562
$0
($1,485)
$0
($14,692)
West Newport Industrial
3
($1,159,336)
($69,027)
($214,337)
$0
$78,644
$0
$0
$26,795
($1,063,733)
$82,322
563
-1%
8,241
Grand Total All Subareas
$9,931,851
$335,396
($611,695)
$697,282
$1,895
$10,793,513
$5,065
$189,546
($1,288,052)
($191,099)
50,756
12%
417,070
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Fiscal Analysis
Of The
General Plan Alternatives
May 12, 2005
Prepared for
City of Newport Beach
Prepared by
Applied Development Economics
2029 University Avenue • Berkeley, California 94704 • (510) 548-5912
1029J Street, Suite 310 • Sacramento, California 95814 • (916) 441-0323
www.adeusa.com
CONTENTS
Introduction And Summary
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Fiscal Impact Of The Alternatives
Citywide Alternatives
Fiscal Impact Of Subarea Options
Airport Business Area
Balboa Village
Banning Ranch
Cannery Village
Corona Del Mar
T : -I - T-1-
Lido
,.1`.
Lido Village
Mariners Mile
Mcfadden Square
Newport Center/Fashion Island
Old Newport Blvd.
West Newport Highway And Adjoining Residential
West Newport Industrial
A Note On Residential Assessed Values
TABLES
1 Fiscal Impact
of General Plan Alternatives
2 Detailed Alternatives Anal
3 Fiscal Impact
For Airport Business Area
4 Fiscal Impact
For Balboa Village
5 Fiscal Impact
For Banning Ranch
6 Estimated Land and Development Values at Banning Ranch
7 Fiscal Impact
For Cannery Village
8 Fiscal Impact
For Corona Del Mar
9 Fiscal Impact For Lido Isle
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10 Fiscal Impact For Lido Village
11 Fiscal Impact For Mariners Mile
12 Fiscal Impact For McFadden Square
13 Fiscal Impact For Newport Center/Fashion Island
14 Fiscal Impact For Old Newport Boulevard
15 Fiscal Impact For West Newport Highway and Adjoining Residential
16 Fiscal Impact For West Newport Industrial
Figures
1 Economic and Fiscal Relationships in Newport Beach.......... 2
2 Overall Cost Revenue Impact of Existing Land Uses ($Millions) 3
3 Impact of Existing Visitors ($Millions) .................................. 3
4 GPAC Alternatives by Landuse............................................ 4
INTRODUCTION AND SUMMARY
The fiscal analysis of the General Plan Alternatives is based on the model described in the report entitled Fiscal
ImpactAnalysis and Model, dated January 2004. The report described the methodology used to develop the fiscal model
and presents a fiscal analysis of existing land uses in Newport Beach, as well as analyses of future growth both at
Newport Coast and for the city as a whole based on the existing General Plan.
The present report analyzes several citywide alternatives identified through analysis of trip generation rates for
each development option identified by the GPAC in geographic subareas of the City. The analysis evaluates the
new development that would occur in each General Plan alternative. The report also presents a fiscal analysis of
every option for each study area. However, from a fiscal perspective, the planning goal is to achieve a positive fiscal
result citywide, not necessarily in each subarea. This requires a balance of land uses across the city, and each
neighborhood or commercial district will provide only a piece of the total land use mix. Therefore, the results from
the individual subareas should be viewed as "building blocks", for use in creating citywide development alternatives
that make fiscal sense.
The City would not likely want all future growth to be concentrated in one type of land use or another, because
individual land uses depend on each other from an economic standpoint, as illustrated in Figure 1 below. For example,
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by themselves, residential and office uses sometimes create a negative fiscal impact, yet they provide the income and
living environment necessary to support the retail uses that provide more of the fiscal benefit for the City.
In general, the individual land uses generate similar impacts as demonstrated in the earlier analysis of general plan
buildout for the City (Figure
Figure 1
Economic and Fiscal Relationships in Newport Beach
k+ozFv�` �'id 9r : Y.rS
............................
. ' fdYH'.". . f 9q1 Ix. .. .
.'.Pot'Fl"WM'.
Hospitality .........
Marine Indus"
Households
1'Fl"17 iRTht..
Service.R"MMEP.9ROk2 Alft
Conwnercial!axriu�I3Qt�i
Office and industrial uses typically do not generate enough property tax to offset the cost of services for those
uses. However, retail, lodging and service commercial uses show a positive fiscal benefit, primarily due to sales taxes
they generate as well as Transient Occupancy Tax (TOT) revenues from overnight stays. Public uses tend to require
more in service costs than they generate in tax revenues. Figure 3 shows the net benefit of land uses serving
primarily visitors.
Average -priced housing creates a negative fiscal impact while higher -priced units tend to pay for themselves in terms
W
of their cost/revenue balance for the City. As shown in Figure 2, the total existing residential housing stock in
Newport Beach is estimated to create a negative fiscal impact of $7.7 million annually, due in part to the fact that
assessed values tend to degrade in relation to market values over time. The types of housing included in the General
Plan Alternatives, combined with current market trends, result in higher property tax revenues than is typically
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generated by the current housing stock. This leads to a positive fiscal outcome for most of the residential
scenarios analyzed in this report (see Figure 4) (more discussion of residential values is provided at the end of this report).
Public
-7.5
TOTAL = $4.7 Million
Institutional $0
S ervic e Commercial $0.1
Marine $0.2
Industrial $0
Retail $3.1
Office $0
Residential %7
01
Lodging $7.8
Public -$6.9
TOTAL = $0.1 Milion
Industrial -$1.6 =
Office -$5.4
Residential -
-$7.7
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Institutional $0.07
Service Commercial $1.9
_ Marine $2.4
Lodging $7.8
Retail $6.7
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FISCAL IMPACT OF THE ALTERNATIVES
Citywide alternatives
The fiscal performance of the alternatives and the various options for the sub -areas is a function largely of their land
use combination and the amount of new development of each type. Three citywide alternatives were
assembled, representing low and high levels of traffic generation. These same alternatives have been evaluated here from
a fiscal standpoint; but perhaps not surprisingly, the results are the reverse of the traffic analysis. The maximum
trip generation alternative generates the best fiscal benefit. While the two minimum traffic generation alternatives
still generate positive fiscal results, they have lower net revenues (Table 1).
The outcome for the minimum alternatives could be significantly affected by the cost of purchasing Banning Ranch
for open space, if the cost were borne by the City of Newport Beach. As discussed below in the section on Banning
Ranch, the cost of the land could require bond payments as high as $10.3 million annually. This would cause both of
the minimum alternatives to show a negative fiscal impact. However, it is possible this transaction could be undertaken
by other groups or agencies, or perhaps with the aid of state or federal funds. For these reasons, the land purchase has
not been included in the figures in Table 1, but it must be recognized that the cost of the open space option at
Banning Ranch could be substantial.
A number of the individual options for many of the subareas do show a negative fiscal impact, as discussed in more
detail in the next section. Table 2 provides some perspective for this discussion by presenting the individual options
that comprise the citywide alternatives. The table indicates the percent contribution of each area to the grand total for
each alternative, and demonstrates that although some of the areas have negative fiscal impacts, the magnitude of
the impact is minimal.
TABLE 1
Fiscal Impact of General Plan Alternatives
ALTERNATIVES
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Total Residential Office
Retail Industrial Lodging Service
9 9 Marine Commercial
Institutional public
True Minimum $317,104
$21,046 ($520,391) $214,133 $25,670 $1,466,127 $0
$125,968 ($1,076,879) $61,429
Subarea
Only $5,325,466
$232,327 ($834,973) $383,142 $1,762 $5,919,656 $674,832
$174,318 ($1,160,055) ($65,544)
Options
Minimum
Subarea
Only $10,321,718
$985,111 ($726,305) $860,417 $97,038 $9,659,692 $674,832
$179,556 ($1,244,653) ($163,970)
Options
Maximum
34.2%
BALBOA VILLAGE
TABLE 2
GPAC Alternatives Growth
Detailed Alternatives
Analysis
Subarea
True Subarea Only
Minimum Only Options Options
Minimum Maximum
AIRPORT BUSINESS AREA
General Plan Growth
-2.1%
GPAC Alternatives Growth
Option 2
52.8%
Option 3
34.2%
BALBOA VILLAGE
GPAC Alternatives Growth
Option 3
-25.4%
-0.1%
Option 4
-1.8%
BANNING RANCH
GPAC Alternatives Growth
Option 1 --Open Space
-1.0%
0.1%
Option 2 -Taylor Woodrow
6.8%
CANNERY VILLAGE
TAZ 1449/CANNERY VILLAGE WEST
General Plan Growth
-0.2%
GPAC Alternatives Growth
0.8%
0.4%
TAZ 1454/CANNERY VILLAGE EAST
GPAC Alternatives Growth
Option 1
0.6%
Option 2
-26.1%
-1.6%
CORONA DEL MAR
GPAC Alternatives Growth
Option 1
1.5%
Option 2
47.6%
2.8%
LIDO ISLE
General Plan Growth
0.6%
GPAC Alternatives Growth
Option 1 --No change
0.0%
0.0%
LIDO VILLAGE
TAZ 1452
General Plan Growth
0.2%
GPAC Alternatives Growth
Option 2
13.0%
Option 3 -mixed use
1.8%
TAZ 1453
General Plan Growth
-9.0%
GPAC Alternatives Growth
Option 1
0.4%
Option 2
0.8%
MARINERS MILE
TOTAL PLANNING AREA
General Plan Growth
32.8%
GPAC Alternatives Growth
Option 2
17.9%
9.2%
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MCFADDEN SQUARE
TAZ 1450
General Plan Growth 3.4%
GPAC Alternatives Growth
9.1%
4.7%
TAZ 1451
Non -Study Area
General Plan Growth 4.5%
2.1%
1.1%
GPAC Alternatives Growth
19.6%
10.1%
NEWPORT CENTER/FASHION ISLAND
GPAC Alternatives Growth
General Plan Growth 272.6%
Option 2 (total TAZ)
GPAC Alternatives Growth
-15.4%
Option 1
-365.6%
38.1%
Option 2
8.1%
100.00/0
TABLE 2
100.00/0
Detailed Alternatives Analysis (continued)
Subarea
True
Subarea
Only
Minimum
Only Options
Options
Minimum
Maximum
OLD NEWPORT BOULEVARD
TAZ 1432
General Plan Growth 23.6%
GPAC Alternatives Growth
Option 1 1.0%
Option 2 3.0%
WEST NEWPORT HIGHWAY
Block A
Option 2 (spec needs housing) 0.0%
Option 4 (parking lot) 0.9% 0.1%
Block B (no change, est. exist dus) 0.0% 0.0% 0.0%
Block C
Option 1 (vertical mixed use)
-4.9%
Option 4 (limit rd, hsg, & hotel)
108.1%
6.4%
Non -Study Area
35.4%
2.1%
1.1%
WEST NEWPORT INDUSTRIAL
GPAC Alternatives Growth
Option 2 (total TAZ)
-15.4%
Option 3 (total TAZ)
-365.6%
-21.8%
TOTAL*
100.00/0
100.00/0
100.00/0
*Note: Totals do not add due to rounding.
FISCAL IMPACT OF SUBAREA OPTIONS
An analysis was run for every land use option in each subarea in the General Plan alternatives analysis. The
analysis addresses only the incremental land use change, and does not account for existing land uses that would remain
in place for each alternative. While the options within each subarea may be mutually exclusive, the fiscal results for
the options may be added to those for options in other subareas to create results for any combination of
subareas throughout the City. A brief discussion of each subarea is provided below.
AIRPORT BUSINESS AREA
According to the existing General Plan Growth Scenario, the Airport Business area would add primarily commercial
and office development, with little change in the number of hotel rooms. This scenario produces a negative fiscal
effect, primarily due to the amount of office space in relation to other land uses (Table 3).
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Under the GPAC alternatives, Option 1 would see substantially more office development, but also significant growth
in lodging. New retail development would be similar to the existing General Plan. This option produces a very strong
$3.2 million in annual net revenues.
Option 2 introduces mixed use residential and commercial development, with less office space and lodging than in
Option 1. It performs very well, with $2.8 million in annual net revenue. Option 3 expands the mixed use
development over Option 2, and provides much less office space, but the same amount of hotel development as in
Option 2. It has the best fiscal impact of the GPAC options in this area, with $3.5 million in annual net revenues.
BALBOA VILLAGE
There are five options in this area in addition to the existing General Plan (Table 4). Under the General Plan
Growth Scenario, the area would see growth in condominiums and single-family units in lieu of some existing single
family units. There would also be a small amount of new retail and office development. Overall, this scenario creates
a negative fiscal impact of about $93,000 per year.
The first three GPAC alternatives show very similar residential development patterns as the General Plan alternative,
but with slightly varying amounts of commercial or office space. Their fiscal effects are very similar to the General
Plan, ranging from negative $80,000 to negative $93,500. Options 4 and 5 include mixed use development,
featuring residential over retail space. Option 5 also includes new hotel space, not included in any of the other options.
The hotel development creates a positive fiscal impact for Option 5, while Option 4 remains slightly negative.
BANNING RANCH
In the General Plan Growth Scenario, the Banning Ranch Area is slated to have 2,496 multi -family units, in addition to
225 single-family units. There would be commercial development to support the residential uses, as well as industrial
and office uses in portions of the site adjacent to the existing West Newport industrial area. It is anticipated that this
site would support higher than average residential values, and the General Plan scenario produces a modest positive
fiscal impact of about $27,000 per year.
The GPAC options range from devoting the entire site to open space (Option 1) to various levels of residential
and commercial uses substantially below the amount allowed by the existing General Plan (Options 2 and 3), with no
office or industrial space. These middle option are variations on the previously proposed Taylor Woodrow project,
and both create a healthy fiscal benefit of nearly $600,000 to $700,000 per year (Table 5). Option 4 would include a
resort on a smaller portion of the site, with relatively little housing and no industrial or office space. However, the
lodging development would create a $1.7 million net fiscal benefit, which is the best result of all the scenarios for
Banning Ranch.
The open space option would entail significant cost to purchase and maintain the land at Banning Ranch. The value of
the land is dependent upon the development options available to it. For this analysis, we have taken the approach
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of estimating the total value of the various land use options included in the alternatives analysis and then setting the
land value at 25 percent of total value for each option (Table 6).
The development permitted under the existing General Plan is the most intensive of the options, and would result in a
total development value of over $1.7 billion. Options 2 and 3 reduce this value somewhat. Option 4, a small scale
resort development, represents the lowest overall value project, primarily because it uses only a small portion of the
site. We have taken the average of these alternatives to represent the potential value of a project at Banning Ranch.
This results in a potential land value of $226 million. If the community were to approve a 30 -year bond measure to
finance this purchase, the annual debt service would be about $10.3 million.
TABLE 3
Fiscal Impact For Airport Business Area
AIRPORT BUSINESS AREA Total Housing
Office Retail
Industrial Lodging Marine Comemercial Institutional public
General Plan Growth
($6,656) $0 ($189,853)
$84,777 ($18,959)
$65,292 $0 $45196
$15,835
GPAC Alternatives Growth
Option 1
$3,291,377
$2,809,528
$0 ($700,211) $187,982 ($42,868) $3,832,850
$0 $122,339 ($8,940)($99,776)
mqrmlqw 7"MMM
$80,465 ($233,614) $141,331 ($42,868) $2,984,052
$50,632 ($88,402) ($82,068)
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Option 3
$3,525,627 $340,968 ($39,044) $163,033 $223,432 $2,984,052
$0 $28,616 ($88,402) ($87,029)
TABLE 4
Fiscal Impact For Balboa Villa4e
BALBOA VILLAGE Total
Housing Office
Retail Industrial Lodging Marine Comemercial Institutional public
General Plan Growth
GPAC Alternatives Growth
Option 1
Option 2
Option 3
($93,184) ($71,746) ($36,041) $5,768
($92,186) ($69,212) ($36,041) $4,530
($93,547) ($70,558) ($36,041) $4,530
$0 $0 $0
16.133 M�
$0 $0
$0 $0
$0 $5,880
$0 $5,880
$0 $2,657
$0 $2 6
($80,433) ($71,746) ($20,145) $5,768
$0 $0 $0
$3,948 $0 $1,742
Option
($189,445) ($25,467) $12,452 $28,295
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($221,682) $0 $5,228
$0 $11,730
Option 5
$1,868,324 ($41,132) $12,452 $46,416
$0 $1,928,057 $0 ($1,387)
$0 ($76,082)
TABLE 5
Fiscal Impact For Banning Ranch
BANNING RANCH Total
Housing Office
Retail Industrial Lodgingrvice
Marine Commercial Institutional public
General Plan Growth
$27,147 $163,680 ($124,393) $15,392 ($72,200) $0 $0 X22.770 —
Option 1 --Open Space
($3,124) $0
$702,731 $213,592
Option 3 -Taylor Woodrow Reduced
$591,375 $117,818
$0 $0 $0 $0
$0 $34,389
$0 $22,110
$0 $489,691
$0
$0
($3,346)
$221
$0
$6,457
($33,792)
($7,606)
$0 $489,691 $0 $3,013 ($27,603) ($13,655)
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As discussed in the Introduction, other options may be possible for purchasing the land, some of which may not
require any investment from the City of Newport Beach itself. Therefore, the land purchase has been kept separate
from the fiscal impact of the onsite land uses in Table 5.
TABLE 6
Estimated Land and Development Values at Banning Ranch
LAND USE
DEVELOPMENT OPTIONS
ESTIMATED LAND VALUE $436,891,000 $321,788,942 $136,012,840 $12,269,758
AVERAGE AMONG THE OPTIONS $226,740,635
ANNUAL COST* $10,316,699
*Based on a 30 year bond @ 5%
Source: ADE, Inc.
CANNERY VILLAGE
The east and west villages have been addressed separately in the analysis (Table 7).
Cannery Village West (TAZ 1449)
Under the existing General Plan, this area would see a small amount of condominium development and some
commercial growth. This scenario has a minor negative fiscal impact. The GPAC alternative would include mixed-
use development with residential over commercial space, and increase the intensity of development over the
existing General Plan. All of the land uses in this option are fiscally positive, totaling about $45,000 in net revenue per year.
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General Plan
Option 2
Option 3
Option 4
RESIDENTIAL
Single Family
$202,500,000
$787,500,000
$392,400,000
$0
Multi -Family
$1,388,400,000
$487,275,000
$142,675,000
$26,000,000
Subtotal Residential
$1,590,900,000
$1,274,775,000
$535,075,000
$26,000,000
NON-RESIDENTIAL
Office
$33,431,918
$0
$0
$0
Retail
$1,859,526
$2,789,289
$1,301,668
$929,763
Industrial
$108,976,964
$0
$0
$0
Lodging
$0
$5,997,503
$5,997,503
$20,951,277
Service Commercial
$12,395,592
$3,593,977
$1,677,189
$1,197,992
Subtotal Non -Residential
$156,664,000
$12,380,768
$8,976,360
$23,079,032
TOTAL
$1,747,564,000
$1,287,155,768
$544,051,360
$49,079,032
ESTIMATED LAND VALUE $436,891,000 $321,788,942 $136,012,840 $12,269,758
AVERAGE AMONG THE OPTIONS $226,740,635
ANNUAL COST* $10,316,699
*Based on a 30 year bond @ 5%
Source: ADE, Inc.
CANNERY VILLAGE
The east and west villages have been addressed separately in the analysis (Table 7).
Cannery Village West (TAZ 1449)
Under the existing General Plan, this area would see a small amount of condominium development and some
commercial growth. This scenario has a minor negative fiscal impact. The GPAC alternative would include mixed-
use development with residential over commercial space, and increase the intensity of development over the
existing General Plan. All of the land uses in this option are fiscally positive, totaling about $45,000 in net revenue per year.
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Cannery Village East JAZ 1454)
The existing General Plan would allow additional condominium development along with a small amount of retail,
office and waterfront industrial development in this area. The industrial uses contribute to a negative fiscal
impact, although if the future development includes boat sales along with repair, it could actually be a positive
fiscal benefit.
The GPAC Option 1 would have mixed use development at greater intensities, while Option 2 focuses mainly on
multi -family residential development, in place of some of the existing commercial space in the area. The mixed
use development in Option 1 creates a positive fiscal impact, while the mix of land uses in Option 2 is negative.
CORONA DEL MAR
According to the General Plan Growth Scenario, the Corona del Mar area will add some single family
residential development, with supporting commercial and professional office space. The single family units create a
positive fiscal effect, and the scenario as a whole produces more than $129,000 per year in net revenue (Table 8).
Options 1 and 2 introduce mixed-use space, along with the new single family units. These options have even higher
fiscal benefits due to the higher intensity of residential development.
LIDO ISLE
The existing General Plan would allow additional growth in single family units. In addition to this option, the GPAC
also defined an alternative that would keep development as it currently exists in the area. The existing General
Plan development scenario would increase property values in the area and have a positive fiscal benefit of about
$64,000 per year, which would not be realized with the alternative (Table 9).
TABLE 7
Fiscal Impact For Cai
CANNERY VILLAGE Total
Housing Office
Lodging
Retail Industrial Service
Marine
Commercial Institutional public
TAZ 1449/CANNERY VILLAGE
WEST
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General Plan Growth
($746) ($2,590) $0 $1,427
p $298
$0 $ $0
� $0 $119
Alternatives Growth
$42,519 $20,228 $10,876 $10,153
$0 $p $0
$592 $0 $669
TAZ 1454/CANNERY VILLAGE
EAST
General Plan Growth
MAL ($31,407) $8,756 ($5,531) $2,273 ($39,144) $0 $0 $1,225
$0 $1,014
GPAC Alternatives Growth
Option 1
Wim $66,861 $31,836 $49,612 $26,367 ($39,144) $0 $0 ($1,461)
$p ($348)
Option 2
($82,669) ($8,619) $49,612 ($58,996) ($39,144) $0 $0 ($19,275)
$0 ($6,247)
TABLE 8
Fiscal Impact For Corona Del Mar
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CORONA DEL MAR Total Housing
Office Retail Industrial Service
Lodging Marine
Commercial Institutional
Public
General Plan Growth
GPAC Alternatives Growth
Option 1
Option 2
LIDO ISLE
General Plan Growth
$129,552 $86,603 ($34,302) $54,370
$152,388 $108,866 ($21,622) $46,311
$0 $0 $0 $15,827
$0 $7,054
$0 $0 $0 $12,437
$0 $6,396
$151,051 $103,760 $43,485 $7,767
$0 $0 $0 ($4,483)
$0 $522
TABLE 9
Fiscal Imoact For Lido Isle
Total Housing
Office Retail Industrial Service
Lodging Marine Commercial
Institutional public
$64,569 $63,271 $0
$0 $0 $0 $0
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$0 $0 $1,298
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GPAC Alternatives Growth
Option 1 --No change to existing uses
$0 $0 $0 $0 $0 $0 $0
$0 $p $0
LIDO VILLAGE
The north and south sections of this subarea have been addressed separately in the analysis (Table 9).
Lido Village North (TAZ 1452)
In the northern portion of Lido Village, little growth would occur in the General Plan Scenario and there is little
fiscal effect. Under the GPAC alternatives, both Option 1 and Option 3 would include mixed use development,
with residential over commercial space. Option 2 focuses more on retail and visitor accommodation, although Option
1 also includes new hotel space. Due to the hotel space, Options 1 and 2 return a substantial $1.3 million annual
fiscal benefit, while the Option 3 fiscal impact is a much more modest $95,000 per year (Table 10).
Lido Village South (TAZ 1453)
The existing General Plan for this area would allow some new office development and a small amount of new
commercial space. The office space contributes to an overall negative fiscal impact by this scenario of more than
$28,000 per year.
Under the GPAC alternatives, Option 1 would increase the retail development potential and reduce office space,
while Option 2 would have mixed use residential and retail space and no new office space. While both of these options
are positive fiscally, Option 2 performs much better at $78,000 per year in net revenues (Table 10).
MARiners mile
In the General Plan Growth Scenario, the Mariners Mile project area is projected to include additional office space, and
a small amount of hotel development. This scenario would result in a positive fiscal impact of about $103,000 per
year (Table 11).
The GPAC options would add mixed use development, substantially increasing the amount of housing development in
the area, along with the same increase in lodging as in the existing General Plan. In addition, Option 2 would focus
on marine uses in -lieu of some of the other non-residential land uses. This would boost the fiscal benefit of the option
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to more than $950,000 per year, up from $305,000 per year under Option 1.
MCFADDEN SQUARE
The east and west portions of this subarea have been addressed separately in the analysis (Table 12).
McFadden Square East (TAZ 1450)
The existing General Plan would permit some increase in single family attached housing in this area, along with a
small amount of commercial development. This land use mix produces a small fiscal benefit of about $10,000 per year.
The GPAC alternatives would include mixed use development with residential over office space. There would also
be additional lodging development, which substantially increases the fiscal benefit by $483,000 per year (Table 12).
McFadden Square West (TAZ 145 1)
In this area, the existing General Plan would also allow some single-family detached units along with townhouse or
duplex developments. As with the east side of this area, this mix produces a modest positive fiscal benefit ($14,000
per year). The GPAC alternative would focus on lodging development with some supporting commercial space,
creating net positive revenues of over $1 million annually.
TABLE 10
Fiscal Impact For Lido Village
LIDO VILLAGE Total
Housing Office
Retail Industrial Lodging Service
g g Marine Commercial
Institutional public
TAZ 1452
General Plan Grow t
$644 $0
$0
$507
$0
$0
$106
$0
$30 $0
GPAC Alternatives Growth
Option 1
$1,368,586 $17,848
$49,014
$54,089
$0 $1,301,961
($1,893)
$0
($52,432) $0
Option 2
$1,344,576 ($11,800)
$49,014
$59,238
$0 $1,301,961
($819)
$0
($53,018) $0
Option 3 -mixed use
$95,856 $25,259
$49,014
$23,895
$0
$0
($1,893)
$0
($419) $0
TAZ 1453
General Plan Growth
($28,506) $0 ($29,999)
$2,665
$0
$0
$4,668
($8,448)
$2,608 $0
GPAC Alternatives Growth
Option 1
$20,321 ($12,347)
$12,832
$16,993
$0
$0
$1,745
$0
$1,099 $0
Option 2
$78,308 $14,384
$12,832
$41,972
$0
$0
$6,958
$0
$2,161 $0
TABLE 11
Fiscal Impact For Mariners Mile
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MARINERS MILE Total
Housing Office
Retail Industrial Lodging rvice
Marine Commercial Institutional public
General Plan Growth 1 $103,921 $4,448 ($108,611) $3,541 $0 $176,042 $0 $27,801 $682 $18
GPAC Alternatives Growth
$305,988 $71,708 ($52,853) $75,673 $0 $176,042 $0 $32,528 ($472) $3,363
Option 2 $953,229 $71,708 ($61,321) $68,838 $0 $174,718 $674,832 $19,517 ($472) $5,410
TABLE 12
Fiscal Impact For McFadden Sauare
MCFADDEN SQUARE Total Housing
Office Retail
Industrial Lodging Service
g g Marine Commercial
Institutional public
TAZ1450
General Plan Growth
$10,881
$5,160
$0 $392
1 $4,999
$0 1 $82 $0
$248
GPAC Alternatives Growth
$483,564
$20,724
($34,509) $17,422
$4,999 $483,568
$0 $7,169 $0
($15,808)
TAZ1451
General Plan Growth
$14,223
$229
($M=3,499
_ $0
` $11,010
($450)
GPAC Alternatives Growth
$1,045,852
$229
$888 32,123
$0 $1,052,526
$0 $1,361 $0
($41,274)
NEWPORT CENTER/FASHION ISLAND
The existing General Plan would allow some increases in nearly all of the existing land uses including commercial,
office and hotels. There would be no increase in residential development, however. This scenario creates a fiscal benefit
of more than $860,000 per year (Table 13).
The GPAC alternatives would have varying amounts of new development in the non-residential land use categories,
along with potentially substantial increases in multi -family residential development. Option 1 would have
significantly more hotel development than would either the existing General Plan or the other GPAC options, and
would also significantly increase the amount of retail development in the area. This combination of land uses creates
the best fiscal benefit in the area, at $3.9 million per year (Table 13). Option 2 significantly increases the amount of
office space that would be permitted, which reduces the fiscal benefit of this scenario to $428,000. Option 3 has the
same office and hotel growth as the existing general Plan, but increases retail development over Option 2, thus resulting
in a mid-range fiscal benefit for this area of $927,000 per year. Also, this option has more housing than the others,
and given the anticipated market segments for the housing this increases the fiscal benefit of the option.
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OLD NEWPORT BLVD.
The existing General Plan option increases single family attached units along with some commercial and office space.
This scenario would have a positive fiscal impact of about $74,000 per year (Table 14). The GPAC options focus on
mixed use residential and commercial development, along with a small amount of additional lodging. In addition, Option
1 includes increased medical offices in the area. However, with the lodging and an increased component of
retail development, Option 1 has a solid fiscal benefit of about $99,000 per year. Option 2 performs much better
without the office space, despite having slightly less retail development. It produces about $161,000 per year. Option
3 deletes the lodging and has a fiscal benefit of only $18,000 per year.
WEST NEWPORT HIGHWAY AND ADJOINING RESIDENTIAL
The existing General Plan would see very little additional development in this area and a modest fiscal benefit. The
GPAC Option 1 adds mixed use residential and commercial development, with some reduction in the existing
lodging rooms in the area. This results in a negative fiscal impact of more than $500,000 per year. Option 2
concentrates on adding some housing and more lodging to the area, and has the best fiscal benefit, at about $1.2
million annually. Option 3 adds more commercial and open space but also results in a reduction of lodging, and a
resulting negative fiscal impact. Option 4 provides limited additional retail, residential and hotel development, with
a positive fiscal impact of more than $340,000 per year.
WEST NEWPORT INDUSTRIAL
This area features growth in industrial and office uses and expansion of the hospital. The hospital is certainly a
major community resource, and in many ways is likely an economic engine in terms of fostering related medical
office development and possibly medical equipment sales. However, because it is operated by a non-profit religious
group, the City receives very little property tax from the hospital. The available revenues do not cover the estimated
city services costs. This greatly influences the outcome of all the development scenarios in this area. The potential
impact of the hospital expansion is approximately negative $1 million annually.
In addition to the hospital project, the three GPAC options in this area include progressively larger components of
multi -family housing development. Option 1 also includes substantial industrial development along with a
moderate amount of office space, creating a negative $1.3 million annual fiscal impact (Table 16). Option 2 includes
some commercial development and a very large medical office component, but reduces the amount of
industrial development compared to Option 1. Option 2 has the worst fiscal impact of the three, at negative $1.5
million. Option 3 includes the most housing development of the three and actually reduces some of the existing
industrial space to make room for the housing and new office development. This option has the best fiscal result,
at negative $1.1 million.
TABLE 13
Fiscal Impact For Newport Center/Fashion Island
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NEWPORT CENTER/FASHION
ISLAND Total
Housing Office Retail
Industrial LodgingMarine Service
Commercial Institutional public
General Plan Growth
864,583
0 (23,015)
149,635
0 724,743
0 36,082 (4,101) (18,761)
GPAC Alternatives Growth
0 (4,858)
GPAC Alternatives Growth
Option 1
3,931,206
51,529 (118,438)
264,749
0 3,839,177
0 68,591 (51,672) (122,738)
Option 2
428,956
7,184 (489,715)
93,818
0 724,743
0 89,723 (4,101) 7,304
-
927,679
)
149,635
0 724,743
0 (4,101) (14,378)
TABLE 14
Fiscal Impact For Old Newport Boulevard
OLD NEWPORT BOULEVARD Total
Housing Office
Retail Industrial LodgingMarine Commrvice
ercial Institutional public
General Plan Growth
74,836
(53,171)
(26,400)
11,662
132 142,488
0 4,983
0 (4,858)
GPAC Alternatives Growth
Option 1
99,132
(32,708)
(53,592)
39,506
132 142,488
0 3,536
0 (229)
Option 2
161,152
(48,095)
52,330
22,068
132 142,488
0 (675)
0 (7,096)
Option C
18,206
(52,092)
52,330
17,539
132 0
0 (675)
0 972
TABLE 15
Fiscal Impact For West Newport Highway and Adjoining Residential
WEST NEWPORT HIGHWAY AND ADJOINING RESIDENTIAL Total
Housing Office
Retail Industrial Lodging Marine C oemercial Institutional public
General Plan Growth
$7,634 ($51) $0
$6'0 $0 $0
$0 $1,264 $0 $365
I
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GPAC Alternatives Change (estimated)
Block A
Option 1 (multi -family res)
6M($669) ($719) $0 $0
Option 2 (spec needs housing)
($1,481) ($1,591) $0 $0
Option 3 (park, open space)
=M� $2,406 $3,080 $0 $0
Option 4 (parking lot)
$2,866 $3,080 $0 $0
Block B (no change, est. exist dus)
Block C
$0 $0 $0
$0 $0 $50
$0 $0 $0
$0 $0 $111
$0 $0
$0
$0
($492)
($182)
$0 $0
$0
$0
$0
($215)
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Option 1 (vertical mixed use)
Option 2 (dus & hotel)
Option 3 (oml. w/lot consold)
6=
Option 4 (limit rtl, hsg, & hotel)
Non Study Area
($503,762)
$45,396
$0
$7,681
$0
($586,806)
$0
$4,438
$0 $25,528
$1,262,151
$352
$0
$15,610
$0
$1,301,917
$0
($3,043)
$0 ($52,684)
($554,542)
$3,3gg
$0
$1,706
$0
($586,806)
$0
$3,191
$�_
$342,926
$352
$0
$1,189
$0
$357,562
$0
($1,485)
$0 ($14,692)
$112,156 $109,170
101.1i
TABLE 16
Fiscal Impact For West Newport Industrial
WEST NEWPORT INDUSTRIAL Total Housing Office Retail Industrial Lodging Marine Commercial l
Institutional Public
General Plan Growth (1,367,961) (18,930) (167,705) 0 (225,379) 21,389 (1,070,313) 92,978
$0 $0
GPAC Alternatives Growth
ption 1 (1,389,910)8,930) (185,171)
Option 2 (1,587,440) (35,223) (533,119) 19,703 (92,381) $0 $0 16,104 (1,070,313) 107,790
Option 3 Nor -71,159,336) (69,027) (214,337) r 26,795 (1,063,733) 82,322
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A NOTE ON RESIDENTIAL ASSESSED VALUES
W
When we analyzed new home prices for the fiscal impact of Newport Coast in 2002 and 2003, single family prices
averaged $815,000 and townhouses averaged about $600,000. Our analysis of existing land uses in Newport Beach
showed that there was very little new multi family product, and most of the assessed values of existing apartment
units have declined substantially relative to market conditions. Our fiscal analysis indicated that existing residential
units generally did not pay their way for City services because the property taxes on existing assessed values were
not sufficient. However, new homes such as those in Newport Coast were valued high enough to create a positive
fiscal impact. For the alternative analysis in this report, the following assumptions have been made about unit values.
■ Single family: $900,000
■ Condominium: $650,000
■ Mixed Use apartments : $344,000
■ Other apartments: $275,000
The land use alternatives have been defined in terms of broad land use categories. In order to prepare the fiscal analysis,
we have made additional more detailed assumptions about the unit types and values. In the Airport area, Banning
Ranch and Newport Center, 75 percent of the multi -family units would be condominiums. In other areas, the
ownership share would be 50 percent. For mixed use residential, 75 percent would be condominiums ($650,000) and
the other 25 percent are valued at $344,000.
In this context, "average prices" range from the low $400,000's for townhouses to the low $600,000's for single family units, while
"higher prices" range from $600,000 for townhomes to $800,000 for single family units.
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September 10, 2003
I
CITY OF NEWPORT BEACH
HARBOR COMMISSION
Ms. Sharon Wood, Assistant City Manager
CITY OF NEWPORT BEACH
3300 Newport Boulevard
Newport Beach, CA 92658-8915
Dear Ms. Wood:
The Harbor Commission has reviewed the current (May 2003) draft of the "Fiscal Impact
Analysis & Model -Newport Beach General Plan Update" process prepared by the City's
GP update economic consultant, Applied Development Economics, Inc.
As a result of this review,(see Summary sections below), the Harbor Commission has
identified a number of harbor—related land/water-use, economic and financial factors
which it wishes the City, its consultants and GPAC to seriously consider in the
continuing input to, and refinement of, the update process. These factors are covered in
the "Recommendations" section at the end of this letter.
Summary -Marine Industry Land Use, Economic & Fiscal Characteristics &
Trends -2003
As summarized on pages 31 and 32 of the consultant's report, marine uses and
the marine industry "...account for over 1000 jobs and generate nearly $2.7
million in net revenues..." to the City of Newport Beach.
The report summary accurately describes the steadily -evolving reduction in
numbers of Newport Beach Marine Industry uses and their total revenues, as
well as "leakage" to other market locations resulting from general marine industry
attrition, consolidation, environmental regulation, and increasing land and
operations costs.
The implications of the loss to the City of significant positive net revenues by
further unchecked shrinkage and leakage of Marine Uses is noted in the report
and by the Commission.
Finally, the (seeming) inability of the Newport Beach Marine Uses to hold position
or expand/diversify in Newp6rt Beach in the face of these larger forces is also
noted. The potential cooperative roles of private and public sector in creative
solutions to these problems and arresting the trend of decline are described in
the report summary.
Summary- Fiscal Analysis of Existing General Plan Marine Uses -2003
This analysis (Table 13-pp24&25) shows Marine Uses in 5th place (of 9�,
contributing an estimated/allocated $4.6 million of City Revenues, and in 7 h
place in terms of City Expenditures at $1.9 million, with a net positive balance
to the City of $2.67 million, putting it in 3`d place in this category, behind
Lodging (1st0) and Retail (2nd)
This role of Marine Uses is significant in illustrating their importance to the
City and its citizens/taxpayers, since it is one of the very few positive -
balance uses offsetting the negative -balance Residential, Office, Industrial
and Public uses, and enabling the City to show a modest positive balance
overall.
Boat and Marine Equipment Sales Tax Revenues represent 5% of the total sales
tax revenues generated by all of the land use categories , placing Marine Uses in
4th place in the 9 categories , ahead of light industrial and hotels.(p22-Fig 1)
Marine Uses Gross Revenues are also 5% of gross City revenues , tied for 5th
with public uses , and behind lodging, but still ahead of light industrial and service
commercial, etc. (p22 -Fig 2)
Summary- Fiscal Analysis of Potential General Plan Marine Uses at GP Buildout -
2025
The projected General Plan Buildout (pp 41&42) indicates growth by 2025 in all
land use categories and in visitor levels, except for Marine Uses.
The consultant's Fiscal Analysis GP Buildout Marine Uses Development
Summary -2025 (Table 20-pp43&44) shows Marine Uses slipping to 6th place,
with an estimated $4.9 million in City Revenues, reflecting only $0.3 million
increase in 22 years. It shows Marine Uses holding in 7th place in terms of City
Expenditures at $1.9 million, also no change in 22 years. Marine Uses although
not increasing substantially, retain their net positive balance to the City of
approximately $3 million, staying in 3`d place in this category, behind
Lodging (1st0) and Retail (2nd)
2 ��
The report summary states: "We have not assumed, however, a
commensurate increase in the marine industry or the number of boats
moored in Newport Harbor. The general plan buildout projection does not
include additional marina berths, and as discussed earlier, some elements
of the marine industry are tinder pressure from rising real estate prices and
may not be able to expand readily in Newport Beach."
Harbor Commission Recommendations
Recommendation 1 -Analyze Both No -Growth and Growth Alternatives for Marine
Uses
The current GP update projection for Marine Uses, as noted above, assumes
essentially a passive "hold -the -line" position for Marine Uses in the community of
Newport Beach over the next 22 years, which the Harbor Commission believes to be
overly conservative and not a reasonable basis for future planning based upon the
current experience of Newport Beach and other waterfront/marine industry
communities.
The Harbor Commission believes that there are actually two alternative
scenarios/choices which should be analyzed for Newport Beach marine uses in
the General Plan Update process, in order to provide perspective for GPAC/City
decision-making :
A. Passive -No Growth: Experience indicates that a passive, non -proactive
apptoach to a dynamic land use and economic element such as marine uses and
related activities would not maintain the status quo, as permitted in the existing
General Plan. Rather there would be a significant, potentially catastrophic decline
in the role of marine industry uses as a Newport Beach "economic engine',
employment and visitor generator, and as an important image maker over the
next two decades through complacency and inaction and through market forces.
This condition should be unacceptable to the Newport Beach community, but it is
important that its negative implications for City fiscal health, overall economics,
image and heritage should be fully examined in the General Plan update effort, to
serve as a cautionary example of potential decline. The Harbor Commission
feels that this issue requires a more comprehensive discussion of the
potential negative economic impacts on Newport Beach of a decline in
marine uses and revenues, supplementing the existing consultant report
text and financial projections, to serve as a cautionary example for City,
GPAC and consultant analysis, and to lend perspective to an alternate,
preferred approach, described below.
B. Proactive -Sustainable Growth: The Harbor Commission and its predecessor
Harbor Committee have, over several years, had numerous discussions on the
potential evolution of the existing marine uses and activities, as well as their
3
revenue potentials, on the land and water areas of Newport Harbor. These
discussions, also incorporating the experience of other evolving waterfront
communities, project a diversification and consolidation as well as more efficient
grouping of the Newport Beach marine uses and related water -dependent
activities on both land and water. Numbers, types, locations, and combinations of
uses and activities will chant a and evolve, as will their primary and secondary
economic, people, environmental and image benefits. Rather than a "wishful
thinking projection" this positive evolution of marine uses and activities would be
the result of proactive efforts already underway by the Newport Beach private
and public sectors to retain and strengthen this important sector of the
community. Thus this active and developing trend, rather than a simple projection
of existing conditions, should be considered by the General Plan update process.
It is the position of the Harbor Commission that the Proactive -Sustainable
Growth option for marine uses in Newport Beach needs to be analyzed and
discussed in more detail among City Staff, Harbor Commission
representatives, GPAC and the City's consultants during the current GP
update process. It can then be refined and integrated into a updated
General Plan through City, GPAC and consultants as the desirable
choice/basis for General Plan policies, objectives and implementation
strategies for marine uses, using the already -adopted Harbor and Bay
Element, in conjunction with the other elements of a new General Plan.
Recommendation 2- Expand Marine Uses SIC/NAICS Categories, Revenue
Sources
The Commission feels that the sources and amounts of "Marine Industry"
revenues potentially ascribable to this category, need to be reviewed as to the
comprehensiveness of its SIC and NAICS subcategories(see attached list), as
well at, all other related revenue sources, in subsequent GPAC discussions and
in GP consultant/staff analysis.
Recommendation 3- Add Marine Tourism Uses and Revenue Sources to Marine
Uses i
The Harbor Commission believes that the important existing (and potential) roles
of the Marine Uses in the General Plan, and in the economic and fiscal "balance'
of uses in the community are not yet fully addressed in the General Plan update
process to date, and need to be expanded to encompass all harbor -related uses,
both traditional "marine", as well as marine tourism and water -related uses.
Ongoing marine industry data gathering and analysis efforts and results need to
be provided to the City, GPAC and consultants for use in this marine tourism
analysis.
Recommendation 4- Expand Consideration of Tidelands Uses to New Water -
Based Uses
4
The Commission feels that the consultant's analysis of potential economic and
fiscal sources and solutions needs to be extended to the water areas of the City.
General Plan options with additional implementation recommendations should be
considered for City actions and public/private partnerships. These options would
conserve key waterfront locations and important marine uses, enhance user -pay
public access and uses at/on the harbor, sustain and improve the harbor
environment, improve harbor operations and sustain and create uses and
activities providing secondary economic benefits to the City and harbor.
The Harbor Commission sees the potential for a sustained and growing marine user
base to contribute needed revenue for dredging and other harbor quality initiatives of
the Commission. Absent same, the burden will fall solely upon the waterfront residential
users and boaters, or in combination, a further burden on City expenditures.
We stand ready to support the ongoing processes by City staff, consultants, and GPAC.
Respectfully Submitted,
Newport Beach Harbor Commission
Timothy C. Collins, Chairman
Recommendation #2 Attachment
Comments/ Questions Related to Marine Land Use Definitions by SIC/NAICS Codes
(Appendix A of Fiscal Impact Analysis and Model -Newport Beach General Plan Update)
Background
The Harbor Commission acknowledges and is pleased that the Fiscal Impact Study
consultant has provided a very useful distinction between marine and general land uses
by their creation and analysis of a separate category of marine uses in the GP update.
In a harbor -based community such as Newport Beach, with numerous marine services,
berthing, and water-based tourism and transportation uses which are evolving from a past
dominant role, scale and mix to still -important current and future new roles, it is essential
to be able to define and measure this change, see important trends and plan the future
proactively in documents such as the General Plan, Local Coastal Plan, RAMP, etc.
It is understood by the Harbor Commission that the Marine Uses data available to the
consultant for this study may not have been assembled by, or available from, the data
sources in a number of the SIC/NAICS categories and subcategories of "marine uses'.
It is further understood that data for many specialized land use subcategories may have
been aggregated, either at the sources or by the consultant for simplification purposes,
since this is only one of a number of land uses being considered in the broader scope of the
overall General Plan Update process.
Questions
In asking these questions, The Harbor Commission does not propose to extend the
scope, timing or cost of the consultant's work or City Staff effort, or to delay the GP
update process, but rather to seek clarification on:
1. whether certain general categories of data were computed and analyzed
including some key subcategories,
2. if other data sources were consulted to determine revenues and costs and,
3. if allocations of revenues and costs for Tidelands areas were proportionately
allocated between the harbor/bay area and the ocean beaches/related areas.
Question 1- Comprehensiveness of Categories/Subcategories Data Inclusion
a. SIC4493/NAICS713930 Marinas & NAICS713990 Boating Clubs w/o Marinas
Do these categories include data on subcategories: Boating Clubs w/Marinas,
Sailing Clubs w/Marinas, Yacht Basins, Yacht Clubs w/Marinas, Recreational
Kayaking, Recreational Rowing Clubs, Parasailing, Charter Fishing?
W
b. SIC 7997/7999 Beaches, Piers, etc.
Do these categories include data on subcategories: Bathing Beaches, Beaches, Beach
Clubs, Beach Amusement/ Recreation Services, Fishing Piers?
Question 2 - Inclusion of Other Data Sources
Are/ where are the revenue and cost sources listed below included in the analysis?
It is assumed that some are grouped under Tidelands, others under general retail,
etc. Can we get a clarification? If not can these issues/ sources be flagged for future
consideration and analysis by the City, others?
a. Moorings (offshore and shore), including annual and visitor sources, OC costs
b. Private piers and docks (presumed estimated thru permits)
c. Commercial piers and docks ( " I I)
d. Public piers, launch ramps, dry storage of vessels
e. Beach parking, other water -related uses parking (public, lessees)
f. Institutional/non-profit/educational marine uses and activities
g. Waterfront/water-related tourism and retail (boat rentals, restaurants, etc.)
Has there been any research into sources of tourism data other than that from the
annual NB Visitors Bureau estimates which might be able to define the magnitude
of "marine/water-related tourism economic impacts? (universities, private sector?)
Are any of the unique* direct and indirect revenues/ economic benefits to the
community of marine/ waterfront land use -based events and activities included?
(Christmas Boat Parade; Newport to Ensenada Race; major regional, national,
international sailing & rowing regattas; other YC and BBC events; NH Nautical
Museum Events/Tall Ships Visits; OCC Sailing Center events; Scout Sea Base
events; NH Aquatic Center events; Backbay Fireworks, other events; In -Water Boat
Shows, BI Art Walk, etc.
* (It should be noted that most of these activities are unique to a harbor
community like NB with a protected water area and a varied -uses, public -
access waterfront. They are seasonally/ annually cyclical and economically
very significant in their attendance levels, as differentiated from the general
flow/levels of beach -city tourism focused primarily on the ocean beach(es)
and pier(s). In the state, only San Francisco Bay and San Diego Bay have
similar activity diversity/added value from an enclosed harbor/ waterfront
uses. The Newport Beach economy significantly benefits from these water -
uses events, and is/will be increasingly dependent on their economic
benefits, derived from a balanced mix of key waterfront uses and activities.)
Question 3- Tidelands Areas Revenues/Costs Allocation
Is it possible to differentiate or proportionally allocate between those Tidelands
costs and revenues ascribable�to the ocean beaches and related areas and services
and those ascribable to the harbor and bay and their interior beaches, wetlands and
services? This would be helpful in attempting to project and allocate future costs
and services associated with both areas, setting of lease and rental rates, fees, etc. on
appropriate user-pay/balanced-budget approaches. It would also be helpful in
defining and weighing land use, public use planning choice -making for the
Tidelands areas during the GP update process.