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Home My WebLink AboutC-579 - Lease Tidelands & Frontage (also refer to City Manager Property files)i TO: FROM: BY: SUBJECT: 0 DISCUSSION Newport Beach City Council C 1 AGENDA ITEM 14 October 26, 1998 Council Meeting MAYOR AND CITY COUNCIL fit;; l L DENNIS DANNER, ACTING CITY MANAGER it DAVE KIFF, ASSISTANT TO THE CITY MANAGERI kk,,c l �� ? �..... LEASE DISCUSSIONS -- LIDO ISLE STREET END PARKS, BEACH S AND MARINA��.�� ISSUE: A request for direction from the City Council regarding a request from the Lido Isle Community Association (LICA) to extend or renew the lease of street end parks, beaches, and marina. BACKGROUND AND DISCUSSION: As a part of its income property inventory, the City holds title to the street end parks, beaches, and marina of Lido Isle (see Attachment A for a map of the parcels and Attachment B for a chronology of City actions relating to the lease). These parcels, which total 219,004 square feet, include: • Walkways (23,062 square feet) • Passive Landscaped "Street End" Parks (37,344 square feet) • Beach Areas and Waterways (113,738 square feet) • Marina Areas (12,673 square feet) • Dry Boat Storage Areas (32,142 square feet) In April 1975, the City leased these properties to the Lido Isle Community Association (LICA) for $3,700 per year (with an inflation adjustment). The lease payment is now $7,880 per year. The 1975 Lease expires on April 14, 2000. For planning purposes (especially relating to the capital expenses that LICA expects to incur to upgrade the marina), LICA wants to negotiate a new lease prior to the termination of the current lease. The City Council's Policy F -7 (Income Properties) directs the City to "continually evaluate the potential of all City -owned property to produce revenue. This may include leasing unused land, renting vacant space, establishing concessions in recreation areas or other similar techniques." The Policy further directs the City that "whenever possible the City shall conduct an open bid or proposal process to insure the highest financial return..." in order to help "...determine the highest and best use of the property." In late 1997, the City contracted with Mr. William Hansen of Fuller and Hansen to conduct an appraisal of the value of the Lido Isle street end parks, beaches, and marina. Hansen submitted the completed appraisal in March 1998. In his appraisal, Hansen assigned a yearly rental value of $54,300. Newport Beach City Council 0 • Agenda Item Given the difference between what LICA pays today to lease the parcels ($7,880 per • year) and the proposed lease value assigned by Mr. Hansen ($54,300 per year), City staff and two members of the City Council (Mayor pro Tem O'Neil and Council Member Hedges) have met with LICA representatives to attempt to resolve various issues. Several aspects of the new lease will require both continued discussion with LICA and additional direction by the City Council. RECOMMENDED ACTION: Offer direction to City Staff on the following issues: (1) What members of the City Council and Staff should continue to meet with LICA representatives on the proposed lease; and (2) What the appropriate mechanism (bi- monthly report, memorandum, other) should be to report back to the City Council on Lease discussion points such as term, rental value, public access to beaches and waterways, and tidelands issues. ATTACHMENTS: Attachment A — Map of Leased Parcels Attachment B — Chronology of Lido Isle Lease Activities 0 L J Agenda Item Attachment A Map of Leased Parcels PARCEL �LOTJ V i, : =p LOT I (I & PARCEL 8 LOT A (1 5) LOTH , ye, LOT P LOT G LOT C & PARCEL C LOT F LOT D LOT • • • Agenda Item Page 4 Attachment B Chronology of Lido Isle Lease Actions October 1897 Portion of Lido Isle (swamplands) conveyed by State of California to James McFadden. July 1919 State grants City of Newport Beach "all of the right, title, and interest" of the State to tidelands and submerged lands within the 1919 boundaries of the City. Includes most of Newport Harbor. Referred to as the "Tidelands Trust" 1923 W.K. Parkinson acquires Lido Isle, begins filling island with attempt to create residential and commercial development 1927 Parkinson sells to William Crittenden. Crittenden and John Elsbach prepare plans for island that would pattern development after Venice, Italy. As a part of sale, Title Insurance and Trust Company holds legal title to Lido Isle. July 29, 1927 State adds tide and submerged lands within Newport Harbor to the Tidelands Trust. May 25, 1928 Superior Court sets "line of ordinary high tide" as decree line around Lido. Properties bayward of decree line are City's tidelands and landward of the decree line are owned by Title Insurance and Trust. August 1928 City Council discusses subdivision map for Lido Isle. On August 23, 1928, Newport News reports that the City Council "insists that at least six street ends be dedicated to the public' and that "the public should not be denied the beaches, which, they say, are being all too rapidly absorbed by private interests." September 7, 1928 City Council approves subdivision map. Map includes "lots at the end of each street" deeded to City. "In return for deeded property, the City agrees to lease the Isle to the developers (Crittenden and Elsbach) over a period of 50 years at a rental of 51002 per year." (Newport News, September 13, 1928). Map includes 16 lettered lots (A through P), most with a 4' easement for City utilities and storm drains. September 14, 1928 City and Title Insurance finalize Agreement to grant and convey lots A through P to City. In same agreement, City agrees to lease lots back to LICA for 25 years with an option to extend for an additional 25 years. December 10, 1928 Declaration of Protective Restrictions recorded with County. Declaration provides that "no structures shall be erected (on the lettered lots) ... except bandstands, comfort stations, recreational structures or other structures for the use, welfare, and benefit of the community and the public, and on all such lots ... having Bay frontage the structure must be so erected and maintained that free access to the waters of the Bay and the Beach shall at all times be available to the residents of the community or the public." March 4, 1929 City and LICA enter into 16 leases for lettered lots A through P. Rent for Lot A (clubhouse area) was $200.00 per year. Others set at $1 per year per lot. June 10, 1929 LICA quitclaims various 10' wide corridors through each lettered lot and along US Bulkhead line (along Lido's North side) to City "for the purpose of constructing public improvements under 1911 Street Improvement Act. 10' strip not coterminous with 4' easements. August 14, 1929 Tide and submerged lands in Pacific Ocean added to Tidelands Trust. July 1930 - May 1931 Correspondence between City, Title Insurance, and Orange Title over deeds to lettered lots. On May 25, 1931, City accepts lettered lot deed a second time. June 5, 1933 City Council adopts resolution finding that LICA "has wholly failed to pay any of the rents (associated with the Lease)" and that LICA "has offered to release to the City all of (LICA's) right, title and interest in" the lease property to terminate the lease. October 29, 1934 City accepts title to "parcels" A. E. and F on north side of Lido in connection with harbor improvement project. • • 0 i • • Agenda Item _ Page 5 November— December 1938 LICA writes to City, requests new lease. City and LICA enter into lease on December 5, 1938. Lease splits lots into five lettered "parcels." Parcel A is 10' bayward of US Bulkhead line, Parcel 8 is uplands to Parcel A (a 50' wide strip running along north side of Lido), Parcel C is tidelands between lots B and D along south side of Lido, Parcel D is uplands of Parcel C, Parcel E is strip of land adjacent to Peninsula on east side of Lido Bridge. Lease declares that "industrial uses' not appropriate for parcels. Parcels must be kept for "park, recreational, residential, and educational purposes." Lease also notes that City Council finds that "the uplands ... cannot be used without the tidelands (and vice- versa) ... and that the leasing of the whole of said lands - -- is necessary for the proper development and use of said lands, water frontage, and tidelands..," Term of lease is 25 years with a rental rate of $750 per year. Lease also declares that LICA may "at all times have the right to quietly and peaceably hold, possess, use, occupy, and enjoy said leased land and premises." April 1, 1940 City Council "closes and abandons' certain 10' wide strips of land through lettered lots A -J (see earlier action, June 10, 1929 regarding these strips). May 31, 1951 LICA asks City to cancel 1938 lease and to enter into another lease for 25 -year term. June 11, 1951 City and LICA enter into new lease with same lands and term as 1938 Lease with expiration date of June 10, 1976. March 22, 1954 City and LICA agree to delete Parcel E (land not on Lido Isle) from 1951 Lease. Same action adds property south and adjacent to Lido Isle Bridge (now the site of the marina). March 23, 1959 City and LICA amend 1951 Lease to allow LICA to build and maintain a marina. March 19, 1973 LICA requests that City renew 1951 lease for additional 25 years. Memorandum proposes that rent be set at $3,566.18 per year adjusted every five years by a factor relating to the assessed value of all Lido Isle property. July 3, 1974 Mr. Robert Krueger of Nossaman, Waters, Scott, Krueger, and Riordan writes letter to City Attorney Dennis O'Neil noting that (among other things): (1) the City can enter into a renewal consistent with Tidelands Trust; (2) lease must provide for reasonable access routes for public; (3) lease should reflect current fair rental value without deduction for LICA's maintenance expenses; and (4) the California Coastal Zone Conservation Act may apply and the California Environmental Quality Act does apply to the lease. February 4, 1998 City staff first meets with LICA representative John Polovina regarding new lease. March 18, 1998 William Hansen transmits copies of appraisal to City. April 15, 1998 LICA president J. Jeffrey Pence writes to City, notes LICA's "strong opposition" to methodology used by Hansen to value lease. • Agenda Item 12 CITY OF NEWPORT BEACH OFFICE OF THE CITY MANAGER I : 1991 DATE: August 11, 1997 TO: Honorable Mayor and Councilmembers APR"' FROM: Peggy Ducey, Assistant to the City Manager K SUBJECT: Lido Isle Community Association Lease Appraisal BACKGROUND The City has held a lease with the Lido Isle Community Association since 1929 for various beaches, harbor frontage, and street ends throughout Lido Island (see attached map). The current lease, approved in 1975, expires in the year 2000. The annual lease payment is currently $7,797. The lease provides that these parcels be open to the public and used for recreational, boating and fishing activities. The Association is responsible for all upkeep and • maintenance of the parcels. DISCUSSION The Association has requested that the City begin re- negotiation of the current lease. Based on the City's Income Property Policy, the City first needs to obtain an appraisal for the fair market lease value. William Hansen, MAI has submitted a proposal for the appraisal at a cost of $9,500. The City has requested that the Association share in 50% of the appraisal's cost. They have agreed, provided that once the new lease is re- negotiated, the City credit their appraisal expense against their first lease payment. RECOMMENDATION 1. Authorize staff to retain professional appraisal services for the Lido Isle Community Association lease not to exceed $9,500, 50% of which will be paid by the Lido Isle Community Association; and 2. Upon renewal of the lease, the Association's appraisal contribution will be credited on the first lease payment of the new lease. n �J 0 a w a d W q w m �) w Fdv� I�� a 6 O d W W' q •� q a x Q • 3� p, p. r\ A ',le VA i' U CITY OF NEWPORT BEACH � n c 9<! P (714) 644 -3000 FO RN November 25, 1992 Mr. John Polovina Lido Isle Community Association 701 Via Lido Soud Newport Beach, CA 92663 Dear John: Recently in a conversation with Council Member John Hedges he indicated your interest in pursuing an extension of your current lease agreement with the City concerning various beach ends. Council Member Hedges and I discussed your request and jointly concluded that the City's plate is currently full with lease negotiations, and we acknowledge your request and will consider your lease renewal after taking action on the lease renewals for Beacon Bay, American Legion and Marinapark. I recognize that this may be perceived as a "put off'; however, the City is actively working to resolve the Beacon Bay issue and hopes to commence the other two negotiations in the very near future. Given all the priorities currently facing the City I hope you will understand that we will do our best to begin your lease negotiations as soon as reasonably possible. If you have any questions, please feel free to contact me or Ken Delino, Deputy City Manager. Sincerely, Kev J. Murphy City Manager X131M cc: uncil Member Hedges eputy City Manager Delino City Hall • 3300 Newport Boulevard • P.O. Box 1768 • Newport Beach, California 92659 -1768 SUITXARY OF CITy'S LIDO ISLE CCti- !.IUNITY ASSOCIATION LEASE I. CENE'RAL INFORMATION Parties to Lease Date of Current Lease Lease Duration City Council A� royal Land Location Source of City's Title Approximate Area City of Newport Beach, Lessor Lido Isle Com:run Uy Association, Lessee June 11, 1951 No. of years: 25 From: April 15, 1975 To: April 14, 2000 Original Lease: 1929 Subsequent Lease: 1938 Subsequent Lease: June 11, 1951 Amended: March 22, 1954 Current Lease: April 15, 1975 Parcels A, B, C, D and additions, Lido Island Lots..deeded,to City by owner— developer of Lido at .time of original subdivision in 1928. 12.75 acres Frontage Uater Street 12,129.00' 1,150' Parcel E was included until 195; at t ;hick time it was deleted. Current and Prior Lease Description The original lease between the City and Lido Isle Community Association was entered into in 1929. A new lease teas consumated 'in 1938. The current lease was entered into in 1951 and extends to 1976. The latter 25 years lease conforms to the requirements under Section 1402 of the City Charter which restricts leasing of waterfront property to a maximum of 25 years. The leased parcels were originally privately owned. To insure access from the interior, lots to bay beaches, land was deeded to the City and leased to the Lido Island Comiainity Association. Adjustment of Annual Re�utal , conan:>nc in�� '! L iuh file 15th day of April, 1950 and every five years thereafter. Adjust.mE:nt till solely dcpc.nd on assessed valuation of properties held. Parcel llo. Legal__Description li. LEASi: fROVISIO;S Purpose As ar:ended larch 23, 1959, "For sole purl -se of using said lands for recret;t.ional, educ,ticnal told civil purposes. Association agrees til:!t at. all times dining the perio<I of this lr:asr: it shall keep said prol el-ty in a clean and and mBly, but 'Is not required t.o (10 So, el"LCt u{'-)!I Silld de-IllSed pre(:!ISes at it.,, o'r!n 0X;)(2,11.Q ;ln_f boi!'t land1nyS, pl�!ygrouII.L flea -:s, 0=' :,.I I"u SU,,..`,rr Oi Cfl /' <, I_IBO I'LL Al CITY Di7 f.i_,iPORf BEACH OFFICE OF 'WE CITY MANAGER SUITXARY OF CITy'S LIDO ISLE CCti- !.IUNITY ASSOCIATION LEASE I. CENE'RAL INFORMATION Parties to Lease Date of Current Lease Lease Duration City Council A� royal Land Location Source of City's Title Approximate Area City of Newport Beach, Lessor Lido Isle Com:run Uy Association, Lessee June 11, 1951 No. of years: 25 From: April 15, 1975 To: April 14, 2000 Original Lease: 1929 Subsequent Lease: 1938 Subsequent Lease: June 11, 1951 Amended: March 22, 1954 Current Lease: April 15, 1975 Parcels A, B, C, D and additions, Lido Island Lots..deeded,to City by owner— developer of Lido at .time of original subdivision in 1928. 12.75 acres Frontage Uater Street 12,129.00' 1,150' Parcel E was included until 195; at t ;hick time it was deleted. Current and Prior Lease Description The original lease between the City and Lido Isle Community Association was entered into in 1929. A new lease teas consumated 'in 1938. The current lease was entered into in 1951 and extends to 1976. The latter 25 years lease conforms to the requirements under Section 1402 of the City Charter which restricts leasing of waterfront property to a maximum of 25 years. The leased parcels were originally privately owned. To insure access from the interior, lots to bay beaches, land was deeded to the City and leased to the Lido Island Comiainity Association. Adjustment of Annual Re�utal , conan:>nc in�� '! L iuh file 15th day of April, 1950 and every five years thereafter. Adjust.mE:nt till solely dcpc.nd on assessed valuation of properties held. Parcel llo. Legal__Description li. LEASi: fROVISIO;S Purpose As ar:ended larch 23, 1959, "For sole purl -se of using said lands for recret;t.ional, educ,ticnal told civil purposes. Association agrees til:!t at. all times dining the perio<I of this lr:asr: it shall keep said prol el-ty in a clean and and mBly, but 'Is not required t.o (10 So, el"LCt u{'-)!I Silld de-IllSed pre(:!ISes at it.,, o'r!n 0X;)(2,11.Q ;ln_f boi!'t land1nyS, pl�!ygrouII.L flea -:s, 0=' :,.I I"u SU,,..`,rr Oi Cfl /' <, I_IBO I'LL ft - CITY OF NEWPORT BEACH CALIFORNIA DATE May 1, 1975 TO: FINANCE DIRECMR FROM: City Clerk SUBJECT: Contract No. Description of Contract Lidn Isle Co>rcr>Ln;ty Association Lease Authorized by Resolution No. 8492 , adopted on aril 14, ':975 Effective date of Contract April 15, 1975 Contract with Lido Isle Comunity Association Address 701 Via Lido Scud Newport Bead-1, CA 92660 Amount of Contract See lease agreement V5 C2-ty e < Attachments (2) City Hall 3300 W. Newport H;,d Area Code 714 673 -2110 i 30 IR May 1, 1975 Lido Isle Comunity Association 701 Via Lido Soud Newport Beach, California 92660 Subject: Lido Isle Beach Lease Agreement Contract No. `-79 Enclosed is a fully executed copy of sut'ect lease. The City Council of the City of Vf -aP tTt Beach authorized this lease agreement on April 14, 1975 by the adoption of Resolution No. 3462. Laura Lagios, CMC City Clerk LL: <!m Enclosure C -sly _L_E A_S_E_ THIS LEA E, made and entered into this 1 S day e of 1975, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter referred to as "Lessor ", and the LIDO ISLE COMMUNITY ASSOCIATION, a California non - profit corporation, hereinafter referred to as "Lessee ": R E C I T A L S: A. Lessor holds title and is the owner of certain harbor frontage and tidelands, together with certain uplands abutting thereon located on Lido Isle, City of Newport Beach, County of Orange, State of California, hereinafter more particularly described. B. Lessee has leased said property from the Lessor and has improved and maintained said property pursuant to a lease agreement between Lessor and Lessee dated June 11, 1951. The term of the said existing lease expires on June 10, 1976. Lessee has requested Lessor to extend the term of said lease for an additional period of twenty -five (25) years under the following terms and conditions. C. It is the judgment of the City Council of the City of Newport Beach that it is for the best interests and welfare of said City and the residents thereof, to lease said lands hereinafter described to Lessee for the purposes hereinafter set forth, for the consideration hereinafter maintained, and under the terms and condi- tions of this Lease. D. It is the judgment of the City Council of the City of Newport Beach that the uplands cannot be used without the tidelands, nor can said tidelands be used without the uplands abutting thereon; and it is further the judgment of Lessor that the leasing of the whole of said lands hereinafter described as one parcel is necessary for the proper development and use of said lands, water frontage and tidelands for recreational, beaches, commerce, navigation and fishery purposes. -1- E. It is the judgment of the City Council of the City of Newport Beach that the leasing of said lands hereinafter described, to Lessee, upon the conditions in this lease agreement specified, is not inconsistent with the trust purposes imposed upon such portions of the lands hereinafter described which may constitute tidelands, nor is the leasing of said adjoining uplands hereinafter described in violation of the gift clause of the Constitution of the State of California; it is further the judgment of the City Council of the City of Newport Beach that this Lease complies with the Charter of the City of Newport Beach, all local ordinances and the General Laws of the State of California. F. It is the judgment of the City Council of the City of Newport Beach that said leased lands cannot feasibly and practically be used by the general beach -going public because of limited vehicular and pedestrian access, lack of parking facilities and other support accommodations for the public. G. It is the desire of Lessor and Lessee to substantially reduce the area of leased lands from that described in the existing lease agreement between Lessor and Lessee and in addition, Lessor and Lessee desire to reserve for the public certain access easements over portions of said leased lands and to reserve a right of access to the State of California to all tidelands which may be a part of and which adjoin said leased lands. H. Lessor and Lessee have retained the professional services of an independent appraiser for the purpose of determining the fair rental value of said leased lands in order to comply with the General Laws and the Constitution of the State of California. I. It is the intention that said leased lands shall be used only for park, recreation, beaches, commerce, navigation and fishery purposes. J. Lessor proposes to lease to Lessee the property described hereinafter, and Lessee is willing to accept said lease on the terms and conditions hereinafter set forth. The City Council of the City of Newport Beach finds and determines that this lease does not violate -2- Section 1402 of the Newport Beach City Charter in that this lease constitutes a releasing of property under lease on the effective date of said City Charter. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, Lessor and Lessee hereby agree as follows: I. DESCRIPTION OF LEASED PREMISES Lessor hereby leases, and Lessee does hereby accept a lease of the property located on Lido Isle, in the City of Newport Beach, County of Orange, State of California, as more particularly described and depicted in that certain appraisal report covering beach properties on Lido Isle leased by the City of Newport Beach to the Lido Isle Community Association, prepared by Mawhinney and Associates, Inc., real estate appraisers, and dated January 31, 1975, which has been marked Exhibit "A" and attached hereto and made a part herein by this reference. II. TERM The term of this lease shall be for a period of twenty- five (25) years, commencing on the 15th day of April, 1975, and expiring on the 14th day of April, 2000. III. RENTAL Lessee covenants and agrees to pay to Lessor the sum of Three Thousand Seven Hundred Dollars ($3,700.00) per year for the use and occupancy of said leased lands, payable on the 15th day of April of each year so long as this lease remains in effect, commenc- ing on April 15, 1975. The rental payable for the first year shall be subject to proration by the remainder of the amount of any rents paid under the existing lease. Said rental payment is deemed to be the fair rental value for said demised property. IV. ADJUSTMENT OF ANNUAL RENTAL Commencing with the 15th day of April, 1980, and every five (5) years thereafter, until the expiration or termination of -3- this Lease, whichever occurs first, the minimum rental sum as set forth in Paragraph III of this lease shall be subject to increase or decrease in proportion to changes in the assessed valuation. Said increase or decrease in the assessed valuation shall be based on a random selection of at least twenty (20) parcels of property located on Lido Isle to be chosen by the City Manger but which shall be representative of all property classifications on the island. In no event, however, shall the rent be reduced below Three Thousand Seven Hundred Dollars ($3,700.00) per year. V. USE Lessee shall use the demised lands, together with any improvements located thereon, exclusively for recreation, beach, park, commerce, navigation, fishery and water and marine oriented purposes only. Lessee agrees that it will not erect or construct any building or other structure upon any portion of said demised premises without prior approval of the City Council of the City of Newport Beach. VI. MAINTENANCE Lessee covenants and agrees that during the term of this lease it will, at its own cost and expense, maintain the grounds, landscaping, piers, floats and any other improvement of any kind in existence or nature constructed or installed in the future on the demised property by the Lessee, at a high standard of maintenance and repair. If in the judgment of Lessor, such standards of maintenance and repair are not being maintained, Lessor may, at its option, after written notice thereof to the Lessee and Lessee's failure to commence in good faith to remedy the same within a reasonable time, to diligently prosecute the same to completion, elect to correct any deficiency and Lessee covenants and agrees to pay to the Lessor on demand any and all sums expended by it in correcting any such deficiency. VII. INSURANCE - HOLD HARMLESS Lessee shall save and keep Lessor, its officers, agents and employees free and harmless from any and all claims or demands of any name or nature whatsoever arising out of, or incident to, the use and occupancy of the property herein described in this Lease. In partial performance of this obligation by Lessee, Lessee shall procure and at all times during the term of this lease maintain in full force and effect a policy, or policies, of public liability and property damage insurance protecting the City of Newport Beach, its officers, agents and employees from all claims or demands for damages. The policy, or policies, shall provide for not less than Two Hundred Thousand Dollars ($200,000.00) for injury or death of one person; Five Hundred Thousand 'Dollars ($500,000.00) for injury or death of two or more persons; and Fifty Thousand Dollars ($50,000.00) for damages to property. The City Manager may require an increase in the amount of insurance from time to time in accordance with changes in economic conditions. Attached to said policy shall be an endorsement which shall provide as follows: "Within the limits set forth in this policy, to indemnify and save the City of Newport Beach, its officers, agents and employees, free and harmless from all damage, claim, loss or liability of any name or nature whatsoever which the City of Newport Beach, its officers, agents or employees may hereafter sustain or incur, or may be imposed upon them, arising out of, or in any way connected with, the use or occupancy by the insured, its servants, agents and employees, of the premises described in a lease granted to insured by the City of Newport Beach." Lessee shall furnish, and maintain with the Lessor, either the original policy, or policies, or a certified copy, or copies, thereof. The policy, or policies, shall be approved as to sufficiency by the City Manager and as to form by the City Attorney. VIII. PUBLIC ACCESS There is hereby reserved over said lease properties at those points as designated in Exhibit "A ", public access easements -5- four (4) feet in width running from the adjacent dedicated streets to the adjoining tidelands. Further, there is hereby reserved to the people of the State of California the right to fish in the waters on or adjoining said demised lands and the right of convenient access to said water over said access easements for said purpose. IX. LESSOR'S RIGHT OF INSPECTION Lessor reserves the right by its authorized agents, employees or representatives to enter the leased premises to inspect the same or any part thereof at any time and to attend to or protect the Lessor's interest under this lease. X. COMPLIANCE WITH LAWS Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California, County of Orange, the City of Newport Beach or any other governmental body or agency having lawful jurisdiction over the leased property. XI. ASSIGNMENT Lessee shall not assign, transfer, sublease or give any grant of control of this lease or demised premises, or any part thereof, either voluntarily or involuntarily, unless first approved by the City Council. XII. NON- COMPLIANCE If the Lessee fails to comply with any of the terms and conditions of this lease, the Lessor may give to the Lessee a notice in writing of such failure and specify therein the particu- lars in which Lessee has failed to comply with the provisions of this lease. If the Lessee fails for a period of thirty (30) days after the giving of such notice to comply with the provisions of this lease, the Lessor may, at its option, terminate this lease, and all rights of the Lessee therein shall cease and terminate and the Lessee shall immediately thereafter deliver possession of the premises to the Lessor. XIII. DEFAULT AND TERMINATION OF LEASE Time and each of the terms, covenants and conditions hereof are expressly made the essence of this lease. -6-- If the Lessee shall fail to comply with any of the terms, covenants, or conditions of this lease, including the payment of rental herein reserved, at the time and in the amount herein required, and shall fail to remedy such default within thirty (30) days after service of a written notice from Lessor so to do if the defult may be cured by the payment of money, or to commence in good faith to remedy any other default within thirty (30)days and thereafter diligently prosecute the same to completion, or if Lessee shall abandon or vacate the leased premises, Lessor may, at its option, and without further notice or demand, terminate this lease and enter upon the leased premises and take possession thereof, and remove any and all persons therefrom with or without process of law. XIV. SURRENDER OF POSSESSION UPON EXPIRATION OR TERMINATION Upon the expiration of the term of this lease or sooner termination thereof as herein provided, Lessee shall peaceably deliver possession of said demised property to Lessor with all improvements located thereon in the same condition as delivered to Lessee, reasonable use and wear thereof, and damage by fire, Act of God, or by the elements excepted. Any imporvements or additions built, constructed or placed upon the leased property by Lessee shall remain on the leased premises and become the property of the Lessor without any cost to Lessor upon the expiration or termination of the lease. XV. REMEDIES CUMULATIVE The rights, powers, elections and remedies of the Lessor contained in this lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's right to exercise any other. XVI. NO WAIVER No delay or omission of the Lessor to exercise any right or power arising from any omission, neglect or default of the -7- E Lessee shall impair any such right or power or shall be construed as a waiver of any such omission, neglect or default on the part of the Lessee or any acquiescence therein. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this lease shall be construed as a waiver of any succeeding breach of the same or of any of the terms, covenants, agreements, restrictions or conditions of this lease. XVII. HOLDING OVER It is mutually agreed that if the Lessee shall hold over after the expiration of this lease for any cause, such holding over shall be deemed a tenancy from month -to -month only, upon the same terms, conditions and provisions of this lease, subject to payment by Lessee to Lessor of the sum of Five Hundred Dollars ($500.00) per month. The provisions of this clause shall not be held as a waiver by Lessor of any right of re- entry, nor shall receipt of said rent or any part thereof, or any other act in apparent affirmance of the tenancy, operate as a waiver of the rights to forfeit this lease and the term hereby granted for the period as herein provided. XVIII. NOTICES It is mutually agreed that any notice or notices provided for by this lease or by law, to be given or served upon Lessee, may be given or served by mail, registered or certified, with postage prepaid, and if intended for the City of Newport Beach addressed to the City Manager, 3300 Newport Boulevard, Newport Beach, California 92660, or at such other address as may be hereafter furnished to the Lessee in writing, and if intended for Lessee, addressed to its Administrator, Lido Isle Community Association, 701 Via Lido Soud, Newport Beach, California 92660, or at such other address as may be hereafter furnished to the Lessor in writing, or it may be served personally upon any corporate officer of Lessee or person charged with general management responsibilities in connection with the leased property; and that any notice or notices provided by this lease or by law to be served upon Lessor may be served personally upon the Mayor of the City of Newport Beach or the City Clerk of said City. Such service shall be deemed complete at the expiration of forty -eight (48) hours from and after the deposit in the United States mail of such notice, demand or communication. XIX. MISCELLANEOUS A. Inurement Each and all of the covenants, conditions and agreements herein contained shall, in accordance with the context, inure to the benefit of Lessor and apply to and bind Lessee, its respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said premises or any part thereof in any manner whatsoever. Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting or the granting of licenses or concessions. B. Captions The captions of paragraphs and subparagraphs of this lease are for convenience only and do not in any way limit or amplify the terms and provisions hereof. IN WITNESS WHEREOF, the parties hereto have executed this lease as of the day and year first: above written. CITY OF NEWPORT BEACH -,a m nicipal corporation By: ayor APPROVED IBS TO FORM /,K ATTEST: City Attorney By: C'ty lerk ` LIDO ISLE CO NITY ASSOCIATIO By 7'O� President f OF C . By: Secretary See Contract File for the Map Showing the Area Leased to Lido Isle Association 2 3 0 NEGATIVE ) ECLARATION 4 for RENEWAL of the LIDO ISLE BEACH LEASE prepared by THE CITY OF NEWPORT BEACH PROJECT DESCRIPTION. The project consists of the amendment and renewal of an existing lease between the City of Newport Beach and the Lido Isle Community Association, which grants the Association the right to use certain public tidelands and abutting uplands. The project does not include any alterations to the physical environment. PROJECT LOCATION. The lease, as amended, will pertain to the property described and depicted in the appraisal report prepared by Mawhinney and Associates, Inc., real estate appraisers, dated January 31, 1975, which has been attached to the lease. DISCUSSION OF ENVIRONMENTAL IMPACTS. While this project will not have any impacts on the physical environment, the leasing of this property will preclude the general public from using this property. However, the amount of land to be leased will be reduced from approximately fifteen acres under the existing lease to approximately 5.2 acres under the proposed lease. Further, the amended lease will provide for public access points across the affected property. Finally, the leased lands could not feasibly and practically be used by the general beach -going public because of the limited vehicular access and the lack of parking and other support facilities. 4. BASIS FOR NEGATIVE DECLARATION. This project has been carefully reviewed in conjunction with Sections 15081, 15082, and 15083 of the Guidelines for the Implementation - 2 - of the California Environmental Quality Act of 1970, as amended, contained in Title 14, Division 6, California Administrative Code. In view of the above discussion of Environmental Impacts and the criteria set forth in these sections, it has been determined that the project is not in conflict with the environmental plans and goals of the community, will not have any impact on the physical environment, and will not adversely affect the public's ability to use the shoreline of Newport Harbor. Therefore, it has been determined that this project will not have a significant adverse impact on the environment. WRF /kk 3/31/75 0 % CITY OF NEWPORT BEACH CALIFORNIA City Hall 3300 W. Newport Blvd. Area Code 714 673 -2110 DATE December 16, 1974 TO: FINANCE DIRECTOR IRON: City Clerk SUBJECT: Contract No. C -579A Description of Contract Preparation of appraisal report for the Lido Isle Beach Lease. Authorized by Resolution No. 8385 , adopted on November 25, 1974. EF£ective date of Contract October 24, 1974 Contract with The Lido Isle Community Association and Mawhinney & Associates, Inc. Address (see below) 1,mount of Contract &"z 5,00 U The Lido Isle Community Association 701 Via Lido Soud, Lido Isle Ne *,vpo. -t Beach, CA 92660 Maw:ainney & Associates, Inc. 4630 Campus Drive, Suite 107 — Newport Beach, CA 92660 City Clerk r MAWF-1MEY & ASSOC MES, M. 4630 CAMPUS DRIVE • SU1TE107 • NEWPORT BEACH, CALIFORNIA 92660 • 714 1 5 4 5 -114 4 The City of Newport Bead 3300 Newport Beach t Newport Beach, CA 92660 and The Lido Isle Community Association 701 Via Lido Soud, Lido Isle Newport Beach, CA 92660 t October 24, 1974 AUTHORIZATION FOR APPRAISAL SERVICES n 'r �1 CEG �cc+0. 6 o In consideration of this Employment Agreement between Mawhinney & Associates, Inc., Appraisers, and the Employer comprised of the City of Newport Beach and The Lido Isle Community Association, said parties agree as follows: The Appraisers will make a study and analysis of that certain property as delineated in "Instructions to the Appraiser" and the at- tached map accompanying a letter from the City of Newport Beach dated October 10, 1974, signed by Robert L. Wynn, City Manager (com- prising 11 parcels located on Lido Isle, New- port Beach). The purpose of the Appraisal is to estimate the fair market value of the subject property. In return for said services, the Employer agrees to com- pensate the Appraisers as follows: For preparation of the Appraisal Report $5,000. The Employer will reimburse the Appraisers for necessary expenses incurred for materials such as maps, blueprints, photographs, deed copies and related sales search expenses. The Apprais- ers agree to request authorization before in- curring any unusual item of expense. Payment for services and costs will be as follows: The balance of the fee, plus reimbursement of costs, will be due and payable upon sub- mission of the Report. -1- Real Estate Appraisers - - r a a The City of Newport Beach and The Lido Isle Community Assn. 2 10/24/74 It is further understood and agreed that if any portion of the compensation or costs due the Appraisers becomes delinquent, the Employer agrees to pay interest thereon at the rate of seven per cent (7g) per annum on said account from the date due until paid, and further agrees to pay all costs of collection thereof, including reasonable attorney fees. It is further understood that neither the employment to make the Appraisal nor the compensation therefor is con- tingent upon the amount of valuation as estimated by the Appraisal. APPRAISAL AUTHORIZED: THFiC/�TY OF- }NEWPORT BEACH (to pay 50% of the fee & costs) // � )`(` 1� �� 1. �k By _ City Manager THE LIDO ISLE COMMUNITY ATT ity ler N (to pay 50% of the f -°& _VQsts) By �- vr MAWHINNEY & ASSOCIATES, INC. ; Jy'A ohn R. Mawhinney, Pr sident j RESOLUTION NO 838 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING THE CITY MANAGER 1JOV 1L 1974 TO EXECUTE A LETTER AGREEMENT SUBMITTED BY J MAWHINNEY AND ASSOCIATES, INC. FOR APPRAISAL " C� SERVICES IN CONNECTION WITH THE LIDO ISLE BEACH LEASE Nov 2 5 1974 WHEREAS, the Lido Isle Community Association has requested the City to renew the Lido Isle Beach Lease which will terminate on June 11, 1976; and WHEREAS, in order to negotiate a new lease, it is necessary to have an appraisal of the property subject to the lease in order to compute the fair rental value; and WHEREAS, the firm of Mawhinney and Associates, Inc., Real Estate Appraisers, have submitted a letter proposal to perform said appraisal services; and WHEREAS, the City Council has reviewed said letter agreement and found it to be fair and equitable. NOW, THEREFORE, BE IT RESOLVED that the City Manager is hereby authorized to execute the letter agreement submitted by Mawhinney and Associates, Inc. as described hereinabove. 25th ADOPTED this -i ATTEST: City Clerk day of November , 1974. or DDO /bc 11/5/74 b Policy No. 59AL 7278 CCA Name Insured Lido Isle Community Assn et al This is to certify that the of has issued to City of Newport Beach CERTIFICATE OF INSURANCE FOR LEASE OF CITY PROPERTY .., } _ETNA CASUALTY & SURETY CO. _! (I •[ L` (Name of Company or Organization) ORANGE, CALIF. (Address of Company or Organization) LIDO ISLE COMMUNITY ASSN ET AL (Name of Insured) 7011 VIA LIDO SOLID NEWPORT BEACH, CA. (Address of Insured) The policy of Liability Insurance described herein, which by the attachment of the City Property Endorsement has been changed in accordance with the terms of the Endorsement. Coverages and limits of liability under the policy are not less than: BODILY INJURY PROPERTY DAMAGE $100,000 each person $50,000 each person $300,000 each occurrence $50,000 each occurrence CITY PROPERTY ENDORSEMENT This endorsement is attached to the policy described herein to assure compliance by the named insured with the terms and provisions of the lease, rental or other agreement entered into between the insured as Lessee and the City of Newport Beach as Lessor. The Company or Organization amends the policy described herein as follows: 1. If the policy is cancelled or changed so as to affect the coverages, at least fifteen (15) days prior written notice of such cancellation or change will be sent to the Lessor, City of Newport Beach, cfo City Manager, 3300 Newport Boulevard, Newport Beach, California 92660. 2. The Lessor City of Newport Beach, its officers, and employees are hereby declared to be additional insureds in the policy described insofar as they may be held liable for injuries, deaths, or damage to property occuring in or about the leased premises including negligence of the city and the company waives any right of contribution which it may have against any other insurance carrier by the additional Insureds. INSURANCE REQUIREMENT Lessee shall, at his own expense, take out and keep in force during the within tenancy, public liability insurance, in a company or companies to be approved by the Lessor, to protect the City of Newport Beach, its officers and employees against any liability, including negligence of the City, to any person incident to the use of, or resulting from injury to, or death of, any person occuring in, or about the demised premises, in the amount of not less than $100,000.00 to insure against the claim of one person; in the amount of not less than $300,000.00 against the claims of two or more persons resulting from any one accident; and $50,000.00 for damage to property. Said policies shall obligate the insurance carriers to notify the Newport Beach City Manager in writing, not less than fifteen (15) days prior to the cancellation thereof, or any other changes affecting the coverage of the policies. Lessee shall furnish as proof of public liability insurance, a fully executed copy of City form, "Certificate of Insurance for Lease of City Property" and "City Property Endorsement." Lessee agrees that, if Lessee does not keep such insurance in full force and effect, Lessor may take out insurance and pay the premiums thereon, and the repayment thereof shall be deemed to be additional rental. This endorsement countersigned by an authorized representative of the Company or Organization becomes applicable endorsement number 2 Effective Date of Policy: Dated: FEBRUARY Name of Agent or Broker: Address of Agent or Broker. Countersigned By: 8 -22 -72 hl 19 73 at JAY AND RENFRO NEWPORT BEACH, CA. MICHAEL A. OCCULTO Expiration Date of Policy: ORANGE (City) (Authorized Representative) 7 -6-73 CALIF. (State) IMPORTANT —THIS FORM IS THE ONLY CERTIFICATE OF INSURANCE ACCEPTABLE TO THE CITY OF NEWPORT BEACH OFFICE Or 'rHL MANAGER August 1972 WwC 3/1 /f9 (6) t 1 AMENDMENT TO LASE 2 3 THIS AGREEMENT, being an amendment to a lease, is made 4 and entered into this -LS_ day of jh R„ a , 1959, by and 5 between the CITY OF NEWPORT BEACH, a municipal corporation, party 6 of the first part, hereinafter referred to as "City ", and LIDO y 7, ISLE COMMUNITY ASSOCIATION, a nonprofit corporation, with its I 8j� principal place of business located in the City of Newport Beach, 9II California, party of the second part, hereinafter referred to as i I the "Association "; 1111 WITNESSETH: I, 12 WHEREAS, the City and the Association heretofore, under 13 date of the 11th day of June, 1951, executed a lease covering 14 I certain tidelands and uplands abutting thereon on and around Lido 1511 Isle in the City of Newport Beach; and 1611 WHEREAS, it is the intention of the parties to amend the 17 j paragraph of said lease setting out the purpose of the lease; and 18 Il WHEREAS, it would be convenient to the Association and in 1911 the public interest to amend the lease as hereinafter provided; 2011 NOW, THEREFORE, the parties agree as follows: 2111 1. The paragraph of said lease reading: 22 "PURPOSE: For the sole purpose of using said lands for recrea tonal, educational and civic purposes." 23 2411 is amended to read: 2511 "PURPOSES: For the sole purpose of using said lands for recrea onal, educational and civic purposes. Associa- 26, tion agrees that at all times during the period of this lease it shall keep said property in a clean and sanitary 27 condition, and may, but it is not required to do so, erect upon said demised premises at its own expense any marinas, 28 boat landings, playgrounds and floats, or may abut wharves and piers to said property, and the uses and purposes 29 herein set forth are not to be deemed a limitation of the uses and purposes to which Association may put said prop - 30 erty but are indicative of the character of the improve- ments to be erected, or the uses and purposes to which the 31 1 property may be put." 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 i i 2. The remainder of said lease is not modified by this amendment and shall remain in full force and effect. IN WITNESS WHEREOF the City of Newport Beach has author- ized and directed the execution of this amendment by the Mayor and City Clerk by Resolution No. `&/ , and the Association has executed this amendment by the signature of its President and Secretary and affixing its corporate seal, on the day and year first above written. ito st: y ►�.ti. y leek Party of the First Part LIDO ISLE COMMUNITY ASS"IATION 1 By resident BlT ✓1' %�•t e l �G 1� 9 d2' �ieti ecru ary Party of the Second Part 2. 1 x� a , !' to 17 ""speed 3i9plio►'dt1' d° . 18 ¢1i10YKI �. ` u F 4 .ff � �6ar l3tty � '� 20 lt ail!Qur or yY To: City Clerk From: CITY OF NEWPORT BEACH City Attorney CITY ATTORNEY Date March 16, 1959 Subject: Amendment to the Lido Isle Community Association lease Forwarded are the original and a copy of a proposed amendment to the lease between the City of Newport Beach and Lido Isle Community Association. The amendment substitutes a paragraph setting out the purposes of the lease for that paragraph currently in the lease. The amendment specifically provides that no other modifications are made in the lease and that it remains in full force and effect. This language was suggested by the Lido Isle Community Association and has been reviewed and approved by the City Committee on Lands and Leases. E�``. %' Also forwarded is a resolution which, if adopted by the City Council, will authorize the execution of this amendment by the City. One executed copy of the amendment should be retained by the City and an executed copy should be forwarded to the Community Association. Your file on this matter is returned herewith. - -i'ia. j a r J ramza WWC:mec City Attorney Encs. cc - City Manager 1 2 3 4 5 M 7 8 9 10 11 12 13 14 15 18 17 18 19 20 21 22 23 24 25 26 27 0• AGREEMENT THIS AGREEMENT OF LEASE, made and entered into this day of 1954, by and between the CITY OF NEWPORT BEACH, a municipal corporation of the 6th class, of Orange County California, hereinafter referred to as "City#, and LIDO ISLE COMMUNITY ASSOCIATION, a California non - profit corporation, with its principal place of business located in the City of Newport Beach, Orange County, California, hereinafter referred to as "Association"; WITNESSETH: WHEREAS, the parties hereto did, under an Agreement dated November 21, 1935, enter into a lease covering certain property described therein as Parcel E, being a strip of property 60 feet in width; and WHEREAS, by Resolution No. 2629 of the City Council of the City of Newport Beach, passed and adopted at a meeting on June 1, 1942, the parties hereto agreed that said Parcel E should be deleted from the terms of said Agreement of November 21, 1938, in which Resolution No. 2629 the said Parcel E was des- cribed as a strip of property 10 feet wide; and WHEREAS, the parties hereto did, under an Agreement dated June 11, 1951, enter into a lease covering said Parcel E, In which it was described as a 60 foot strip; and WHEREAS, it was the intent of the parties to said Agreements of November 21, 1938, June 1, 1942 and June 11, 1951 to eliminate Parcel E, the same being a 60 foot strip, from the provisions of the Agreement of November 21, 1938, and it is the Intention of the parties hereto that said Parcel E be eliminated from the Agreement of June 11, 1951, in which it was included by mistake; and I I 28 29 30 31 32 0• AGREEMENT THIS AGREEMENT OF LEASE, made and entered into this day of 1954, by and between the CITY OF NEWPORT BEACH, a municipal corporation of the 6th class, of Orange County California, hereinafter referred to as "City#, and LIDO ISLE COMMUNITY ASSOCIATION, a California non - profit corporation, with its principal place of business located in the City of Newport Beach, Orange County, California, hereinafter referred to as "Association"; WITNESSETH: WHEREAS, the parties hereto did, under an Agreement dated November 21, 1935, enter into a lease covering certain property described therein as Parcel E, being a strip of property 60 feet in width; and WHEREAS, by Resolution No. 2629 of the City Council of the City of Newport Beach, passed and adopted at a meeting on June 1, 1942, the parties hereto agreed that said Parcel E should be deleted from the terms of said Agreement of November 21, 1938, in which Resolution No. 2629 the said Parcel E was des- cribed as a strip of property 10 feet wide; and WHEREAS, the parties hereto did, under an Agreement dated June 11, 1951, enter into a lease covering said Parcel E, In which it was described as a 60 foot strip; and WHEREAS, it was the intent of the parties to said Agreements of November 21, 1938, June 1, 1942 and June 11, 1951 to eliminate Parcel E, the same being a 60 foot strip, from the provisions of the Agreement of November 21, 1938, and it is the Intention of the parties hereto that said Parcel E be eliminated from the Agreement of June 11, 1951, in which it was included by mistake; and I I 1 2 3 4 5 e 7 8 9 10 11 12 13 14 15 Siz 17 18 19 20 21 22 23 24 25 26 27 WHEREAS, the parties hereto desire to add to the terms of the Agreement of June 11, 1951 certain additional real pro- perty owned by the City of Newport Beach, it being the judgment of the City Council of the City of Newport Beach that it 1s for the beat interests and welfare of said City and the residents thereof to lease said additional lands to the Association for the purposes set forth in said Agreement of June 11, 1951 and under all the terms, conditions and recitals therein contained; NOW, THEREFORE, IN CONSIDERATION OF the considerations set out and contained in said Agreement of June 11, 1951, the parties hereto do agree that the following described property be, and it is hereby, added to the Agreement of June 11, 1951 as an additional parcel of the demised property. Said property Is particularly described as follows: NAll of that certain parcel of land in Section 29, Township 6 South, Range 10 West, S.S.B. & M., in the City of Newport Beach, Orange County, California, lying westerly of the U.S. Bulkhead line between Stations 173 - 174, as said Bulkhead line and stations are shown on a map entitled «Harbor Lines, Newport Bay, Californian, approved by the Secretary of the Army, February 15, 1951 and on file in the U.S. District Engineer's Office, Los Angeles, California, and southerly of and adjacent to that certain right of way 100 feet in width, described in a deed to the City of Newport Beach from Title Insurance and Trust Company, recorded February 26, 1930 in Deed Book 361, Page 110, Official Records of said Orange County and more particularly described as follows: "Beginning at the most westerly corner of Lot 885 of Tract 907, as laid out and shown upon a map recorded in Miscel- laneous Maps, Book 29, Pages 25 to 36 inclusive, Records of Orange County, California, said corner also being in the U.S. Bulkhead Line between Stations 173 and 174 as shown upon said ., 28 29 30 31 32 i WHEREAS, the parties hereto desire to add to the terms of the Agreement of June 11, 1951 certain additional real pro- perty owned by the City of Newport Beach, it being the judgment of the City Council of the City of Newport Beach that it 1s for the beat interests and welfare of said City and the residents thereof to lease said additional lands to the Association for the purposes set forth in said Agreement of June 11, 1951 and under all the terms, conditions and recitals therein contained; NOW, THEREFORE, IN CONSIDERATION OF the considerations set out and contained in said Agreement of June 11, 1951, the parties hereto do agree that the following described property be, and it is hereby, added to the Agreement of June 11, 1951 as an additional parcel of the demised property. Said property Is particularly described as follows: NAll of that certain parcel of land in Section 29, Township 6 South, Range 10 West, S.S.B. & M., in the City of Newport Beach, Orange County, California, lying westerly of the U.S. Bulkhead line between Stations 173 - 174, as said Bulkhead line and stations are shown on a map entitled «Harbor Lines, Newport Bay, Californian, approved by the Secretary of the Army, February 15, 1951 and on file in the U.S. District Engineer's Office, Los Angeles, California, and southerly of and adjacent to that certain right of way 100 feet in width, described in a deed to the City of Newport Beach from Title Insurance and Trust Company, recorded February 26, 1930 in Deed Book 361, Page 110, Official Records of said Orange County and more particularly described as follows: "Beginning at the most westerly corner of Lot 885 of Tract 907, as laid out and shown upon a map recorded in Miscel- laneous Maps, Book 29, Pages 25 to 36 inclusive, Records of Orange County, California, said corner also being in the U.S. Bulkhead Line between Stations 173 and 174 as shown upon said ., 1 �I i 2+ 3 4 5' 6 i 7 8! 9, 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 map of Harbor Lines; thence southwesterly along the southwesterly prolongation of the northwesterly line of said Lot 895 a distance of 10.0 feet to the true point of beginning; thence continuing along said southwesterly prolongation to an intersection with a line lying 100 feet southerly of and parallel to the southerly line of the said 100 foot right of way; thence north 75009'40" west and along said parallel line, a distance of 250.00 feet; thence north 30009140" west, to an intersection with the westerly prolongation of the southerly line of the aforementioned 100 foot right of way line; thence easterly along said westerly prlongatio and along said southerly line to an intersection with a line ly- ing 10.0 feet southwesterly of and parallel to the U.S. Bulkhead Line between Stations 173 and 174 as shown upon said map of Harbo Lines; thence southeasterly along said parallel line to the point of beginning.4 It is further agreed between the parties hereto that said Agreement of June 11, 1951, . is hereby amended by striking and deleting therefrom the parcel of property described on page 5 thereof as Parcel "E", a strip of ).and 60 feet in width. All the other terms and conditions of said Agreement of June 112 1951 shall remain In full force and effect. IN WITNESS WHEREOF, the City of Newport Beach has this day caused its corporation name to be signed and its corporate seal to be affixed by its Mayor and City Clerk thereunto duly authorized by Resolution of its City Council dated the ,�a"°p day of 1954 and Lido Isle Community Association has here- unto caused its corporate name to be signed and its corporate seal to be affixed by its President and Secretary thereunto duly authorized by Resolution of its Board of Directors dated the day of E 1954• CITY OF NEWPORT BEACH, 3 1! it 2i 3 4 5 6 7 8 . I 9 10 i 11 12 13 14 j 15 16 I 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 By Mag /or By- y 01 er i LIDO �IBL� OODflUN�TY iiSSOCIATIUN Preal 4 _ u�'ecretary 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 #, RESOLUTION No. 2�2 a WHEREAS, the City of Newport Beach and Lido Isle Com- munity Association did, under an Agreement dated November 21, 1938, enter into a lease covering certain property described therein as Parcel E, being a strip of property 60 feet in width; and WHEREAS) by Resolution No. 2629 of the City Council of the City of Newport Beach, passed and adopted at a meeting held on June 1, 1942, the parties agreed that said Parcel E should be deleted from the terms of said Agreement of November 21, 1938, in which Resolution No. 2629 the said Parcel E was described as a strip of property 10 feet wide; and WHEREAS, the parties did, under an Agreement dated June 11, 1951, enter into a lease covering said Parcel E, in which it was described as a 60 foot strip; and WHEREAS, it was the intent of the parties to said Agreements of November 21, 1938„ June 1, 1942 and June 11, 1951 to eliminate Parcel E, the same being a 60 foot strip, from the provisions of the Agreement of November 21, 1938, and it is the intention of the parties that said Parcel E be eliminated from the Agreement of June 11, 1951, in which it was included by mis- take; and WHEREAS, the parties desire to add to the terms of the Agreement of June 11, 1951 certain additional real property owned by the City of Newport Beach, it being the judgment of the City Council of the City of Newport Beach that it is for the best interests and welfare of said City and the residents there- of to lease said additional lands to the Association for the purposes set forth in said Agreement of June 11, 1951 and under all the terms, conditions and recitals therein contained; and WHEREAS, there has been presented to the City of New- port Beach a certain Agreement dated the oU'.0 day of 1954, wherein and whereby the above corrections in the legal 1 1� 2' 3 4' 5 6 7 8 9 10 ill 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 description are made and wherein and whereby said additional real property is included in said Agreement of June 11, 1951; NOW, THEREFORE, BE IT RESOLVED that the Mayor and the City Clerk be, and they are hereby, authorized and directed to execute said Agreement in behalf of the City of Newport Beach and to deliver an executed copy thereof to the Lido Isle Commun- ity Association. The above and foregoing Resolution was duly and regul- arly passed and adopted by the City Council of the City of New- port Beach, at a regular meeting thereof, held on the o�'= day of March, 1954, by the following vote, to wit: ATTEST: `pity GTler-k AYES, COUNCILMEN: NOES, COUNCILMEN: ABSENT COUNCILMEN:_ b5yor 2 r 1 �I 2 3 4, 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 0 31 32 :I ACRFEMENT I THIS AGREFPIENT OF LEAviE made and entered into this 11th day of June, 1951, by and between the CITY OF NTE'VPORT B-:ACH, a municipal corporation of the sixth class of Urzn.e County, California, party of the first 1.)art, hereinafter referred to Fs the "City", and LIDO ISLE COL'a UNITY ASSOCIATION, a California non - profit corporation, with its principal place of business located in the City of 1`teV,'_-)ort Beach, Oran:;e County, Calif ornia, party of the second part, hereinafter referred to as the "Association "; 'NITN,:SSETH: WHEREAS, the City is the owner of harbor frontage and tide lands in the City of IIev,nort Beach, to:wether with certain uplands abutting thereon, all in the City of Nevroort Beach, County of Orange, State of Colifania, hereinafter more particul- arly d.escribsd; and '.vHERLAS, in the judgment of the City Council of the City of Ne:,r•ort Beach it is for the best interests any_ welfare of said City and the residents t'ierecf, to lease said lands hereinafter e.escribed to the Associr.:tion for the nurposes herein- after set forth, for the consideration hereinafter mentioned, and under the terms and conditions of this lease; and ;WHEREAS, in the judgment of the City Council of the City of Newport '.,,each tie use of the tide lands and uplands abuttin` thereon, i.iereinafter described, for industrial uses, would be inimical to the best i.nter:sts of said City, for the reason that Newport Harbor in sa?id City has been ?1.eveloped., improved and dredged as a pleasu e harbor and not a. harbor to be used for industrial purooses, and there are. no industries o-f any description i;nmediately adjoining said lands to be le�>Ised, 1 III 2' 3 4 5 M 7 A 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 n� and the lands adjoining the lands herein mentioned are zoned for residential purposes only; and i"+HEREAS, it is t_re present intention that the tidelsrrls and unlands abutting, thereon, owned by said City, shall never be used for industrial our_;,oses, and shall be kept for park, re- creational, residential and educational purposes; and. ;HE-- -1ZAS, it is tile. judgment of the City Council of the City of Newport .3each that the leasing of said lands herein- after described, to the Association, upon the conditions in this aEreemnent specified, is not inconsistent with the trust imposed u-oon such Dortion o° the lands hereinafter described, which may constitute tidelands or harbor :frontage under the General Lays and Constitution of the State Of Calif m nia; and V"HEREAS, a portion of the lands hereinafter described constitute tide lands and water frontage and a portion thereof constitute uplands abuttin., thereon; and WHEREAS, it I.- further the judgment of the City Council of the City of Newport reach that the uplands hereinafter des- cribed cannot be used without the tidelands, nor can said tide- lands be used without the uplands abutting thereon, and it is further the judgment of said. City Council that the leasing of the whole of said lands hereinafter described as one parcel is necessary for the p-royoer development and use of said lands, crater frontage and tidelands, for recreational, residential and educa- tional purposes, and. it is furt -er the judgment of the City Council of the City of Ne,:.)crt ..eaci, that the leasing of said lands for said purpose is necessary for the prover development of Nee%mcrt Harbor and the nowt'_: of the City of Neimcort Beach as a residential section; and SJHE':,AS, it is the intention_ of the Association to keep all the lands hereinafter described for p:axk and recreation purposes, and no buildings or other structures shall ever be 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 1.� erected or constructed thereon. 0 NO'1i2 THEREFOaE, THIS AGREEMENT FURTHER I,7ITNESSETH: I That the City, for and in consideration of the rents herein reserved, and. them covenants anc. agreements herein containe3 on the part of the association to be kept and performed, has d.e- � i mired and leased and does by these ;presents demise and lease unto the Association that certain real property situated in the City of Newnort '_each, County of Orange, State of California, and more n.. ^,rticularly described as follovrs, to wit: PARCEL "A° All those certain tide lands, submerged_ lands, swamp and overflow lands in Newport Bay, lying partly within Seeticns 27, 28, 33 and 34, Tov °nshic 6 South, 3anC_e 10 West, S.B.B. & M., described as follows, to wit: A stria of land ten (10) feet in width parallel to and adjacent to and b Trward of the United States Government Bulkhead Lines between U.S. Station Nos. 170 <nd 171, between li.S. Sta- tion Nos. 171 and 172, bets *,een TJ.B. Station Noe. 172 and 17, between U.S. Station Nos. 1.73 and 174, between U.S. Station Nos. 174 and 175, and. betvreen U.S. St,,�.tion Nos. 17 and 170, as said Government Bulkhead. Lines and Stations are laid out and si-own an- on a nap en-i fled "Iia.rbor Lines, Ncv;'r,ort ;=ay Harbor, California" approved by the Actin: -,- Secretary of `Ie:r on lday 2nd, 1036, a copy of said man bein`; on file in the United States Ena- ineers Office, Los An'eles, Carifornia, exceptin?; ti:erefrctil that certain public rin,2a of ',a� 100 feet in as said public right of way is described in Deed of '-'asement for Street Purposes to the City of Ne�'-,:ort reach, recorded February 26th, 1930 in Book 361, page lIU of Official 1- eeords of Orange County, California, sail publie right of `:ati 'weir;; the `,esterly extension cf 'Vla Antibes, as said Via Antibes is laid out an,l sI".own upon a ma» of 'Tract No. 907, as recorded in Liscel.laneo zs Maps, Boo'_; 20, Da.E�es 25 to 3c, in- clusive, Records of sai�. Oranle County-. iARQ .L "B" All those certain uplerd.s abs -t __L on tidelands, sub - mer;ed l-,,rds, swarc and over- floti'v lean -.s, as described in Parcel "A" hereof, descri'?ec. as foli.oe;s, to Wit: Beginninn, at th_e most no_- .eriy corner of Lot 875, as laid- out and. s: ^own u ion a .nap of �re,ct No. 907, <s recorded in Ir'._scella:n.,eas in oc?c 2-- to 3b. inc�usive, Records of Oran. =;e County, C_j form a„ Sal ,x point of iC iliniYl heir in tD the United States Gov:crnment Bulkhn -l. Line 'c,.'U" peen L.S. Station Nos. lo, and 175, a.s la ic and e�:oefin u:ion a ms entitled "Harbor Lires, Ne, -port Ba;: Harbor, California" approved by the Actir.L, Secretary of .;ar on ay 2nd, l9-o, a copy of said_ man be- ins on file in t "rc United. states ;:r.yineers Office, Los Anlleles, California; running t]zenee _,;steely alcn�Z ..aicf. bul?chead line on 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 71 curve concave to e south and having a radius of 150 feet � through an are dist-a, ce of 126.20 feet to said bulkhead Station No. 175; Thence South 61000' east along z,,e United States .;overr:- ment bulkhead line 5,176.30 feet to tl:-e U. S. Station No. 170; Thence South 23000' ` est alonf; the ment bulkhead. line between U.S. Station Nos. feet to the most e- sterly corner of Lot 329, shown uoon said map of '_ wct No. 907; United States Govern+ 170 and 171, 50.28 as laid out and Thence North 610 00' :'lest along the northeasterly boundary line of said 'Tract No, 907, 5,293.40 feet to the point of beginningl; And includin =�. Lots A, E, F, G, H, I and J, as said lots are led out anr. shown upon said map of Tract 1 1o. 907, ex- ceptinc.- therefrom:: all es.seraents for Dublic utilities, street li ;hting, storm drains and- public ways opened or dedicated for public purposes as of recor:'.s. PARCEL "C" All those certain tidel,�.nds, submerged lands swamp and over• -flow lands in llev.�)ort Bay, l;�ing in Section 3� -, Town- ship 6 South, Range 10 'oiest, S.',.B. ci R4., described as follows, to wit: Beginrinl at an angle point In the sour ^.erly bound,:1117 line of Tzlact No. 907, as laid out and s --:own upon a map recorded in Lliscellaneous I:Iaps, cok 28, pales 25 to 36 inclusive, Re- cords of Orange County, California, w'srlch point of beginning; is South 7�j017'4C" 'ast, 1.49 feet from the most westerly corner of Lot j41, as shown upon said map of Tract No. 907; running thence South 75017140" East along the southerly line of said. Tract No. 907, 9110.87 feet to an angle point which is South 750 17i40" East 13.28 feet from the southwesterly corner of Lot 22 of said- Tract No. 507; Thence south 6805214411 Last along the southerly line of said Tract No. 907, 702.59 feet to a point in the United States Government Bulkhead- Line between U.S. Station Nos. 172 and 173, as laid out and shown upon a map entitled "Harbor Lines, Newport Say Harbor, California." approved by the Actin; Secretary of ;lam on P::ay 2nd_, 1936, a co.g:I, of said man being; on file in the United States Pn;;ineers Of "ice, Los Angeles, California, said. mint bears 11.orth 72031' ':'lest, 504.80 feet from said U.S. Station No. 172; Thence North 72031' lest aloe..; said bulkhead line 1,619.97 feet to the point of beginning. PARCEL "D" All those certain ur)land -s a;outting on tidelands, sub- merged lands, swamp and over -floe lands, as described in Parcel "C" hereof, descril:)ed as folloi ^s, to wit: Lots B,C and D, as said lots are ls.id out and shown upon a map of Tract No. 907, as recorded in iA scellaneous I':aps, Boo,; 28, pates 25 to 36 inclusive. Lecords of Orangre County, California, exce_ptinE therefroul all easements for public utiliti 4 1 2 3 4 5 EN 7 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 ft street lighting, storm drains'and public ways opened or dedicated for public purposes as of record. PARCEL "" All those certain tidelands, submerged lends, swami and overflow lands in Newport Bay, lying in Section 28, Township 6 South, Range 10 W., S.E.B. & M., described as follows, to 'Wit. A stria of land 60 feet in width, parallel to and ad- jacent to and ba.yward of U.S, 'Government Bulkhead- Line between U.S. Station No. 124 and U.S. St-tior. No. 125, as said. govern- ment bulkhead line and stations are laid out and shown upon a map entitled "Harbor Lires, Nei,,. -oort '' :.ay Harbor, California" approved by the Acting Secretary of '.iar 1:1ay 2nd, 1936, a copy of said man being on file in the U.S. n-ineers Office, Los An.�eles, California, and ex,.end.in� from the Northeasterly pro- longation of the Northerly line of Lot 1122, as said Lot 1122 Is laid out and shown upon as map of Tract 907, as recorded in Miscellaneous Maps, Boob 28, pages 25 to 36 Inclusive, Records of Orange County, California., and the Northerly line of that cer- tain public right of way 100 feet in width, as said public right of way is described in Deed of Easement for Street purposes to the City of :Newport Beach, recorded February 26, 1930, in Book 361, .)age 110 of Official Records of said County, said public right of way being the easterly extension of Via Lido, as said Via Lido is laid out and shown upon said map of Tract No. 907. Reserving unto -he City of Newport Beach all streets, sidewalks, Ways, and ri .-hts of way of every nature, description or kind, with the full rie;ht of ingress and egress an,: the right to go in and on saidY.)roperty, for the purpose of constructing, reconstructing, repairing and cond tioning of all public pro- perties thereon located, on any part or parcel of tine above des- cribed premises. for PUT1P09 E: For the sole purpose of using said lands recreational, educational and civic nurooses. TERivi: To have and to hold the same with the appurten- ances thereunto belon -ing, for and during the term of twenty- five (25) years, com:encing as of the llti, day of June, 1951, and ending as of the 10th day of June, 1976. CONSIDERATION: The :aid Association agrees and coven- ants to pay for said Lease the sum of ;,18,750.00, payable as follows, to wit: 8413.05 in cash upon the signing of these pre- sents, it being understood and agreed that the balance of the .1; -0.00 payment due for the period from June 11, 1951, through June 10, 1952, shall be constituted by a credit to the Associa- tion from the City in the sum of 1336.95, receipt of which is hereby acknoealed ed, Tile balance of the total swi of rent aue, F 1 2 3 4 5 A 7 [l 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 to wit, t ?15,000.00, shall be payable at the rate of ;;750.00 per year, payable in advance on the llth ^..ay of June each year here- after during the term of the Lease, com.;:encin.g June 11, 1652. FURT_s R CONSIDERATION_ The Associ. -F;ticn agrees and covenants to '-eep said premises in a clean and si dal;: condition, free fror.- Tweeds, rubais'_, papers or other debris. FURTHER CONSIDERATION: Said Association further agrees and covenants that as a part of the considerationfor this le. -,se that it will during the term hereof keep in good condition and repair the viers and floats located u-rDn the above described real property, and further agrees that when said property mentioned . herein under the heading, "Additional Lands to be added to the within Leo,se" shall be addeft to the real property herein describ that it will during the term of this agreement naintain In good condition. and repair the north a),nd south promenades, the bulk- head and sidewalks running to these promenades, ant ?. all other ,,ublic improvements t.e:ceon located, except that the City agrees to continue t:-t-- maintenance of street lights, conduits and storm drains now located on said devised premises. FURTHER CO. ?SIDZRATIO1N.,, In consideration of the fore- going said Association covenants and agrees that it will not er or construct, or attempt to erect or construct any bui'.ding•, buildings or other s �ructure ujY) i sa,10 deiv sed premises, or upon any part or portion thereof, without -ihe prior written consent of said City. TAXES AND A.:B >5 :rr :TS: It is understood and agreed that this lease shall not be taxed by said city, in as much as said demised premises s'_all only be used by said Association for past-, educational, recreational and civic pur °roses as aforesaid. ASSIGN;PENT OF' L AS:11: The dissociation further coven- ants and agrees with ti-e Cit, T tl,aa.t it will not _�•.ssign this le -,se or any iratehest the - i:', or eubl.ease or sublet aid nremises or r II in 2i 3 4 5 6,i 71 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 � 4 any .:part thei,eof, wlthout first obtail ?i.nl the written consent of the City, and further aErees and covenants that it will not mortgage or encumber said le<-.senold intersst, axed vail -, if said Association ceases to exist, pro;n7tly quitclaim all its ri`ht, title and interest in a,nd_ t0 said lease e,nd, every pP„rt and. por- tion thereof. I SIT Y' S J OTE"-A- :LLT OF F :'ACE?_ U-L — EPd J Y.i:i^ "T_ The said City hereby covenants and a; rees that the Association, perform.ino � the covenants, terms and conditions of this lease on its cart to be kept and performed, may and shall have the right at all times (5uring; the term o:P t_^is lease, to quietly and peaceably I :old, possess, use, occupy E:.nd enJoj' said le, -sed Tana and pre - i raises, LI'�,JIDATE.: Diii,:ACIE5: The Association covenalt s and azrees th_..t it will, u,)on tr..e ter::nina.tion of this lease by for - feitu_�e or lapse of time, yield up imlIediate possession of said demised premises, to= ,-ether with all th.e .mprove;eents t Hereon, to said vitzr, or to pay, upon failing so to do, as liquidated daMages for the wncle tine such possession is witrl.�:1el.d, the sum of :,x500.00 per month, but t,:e provisions of this clause shall. not be held as a waiver by said city of any ric-,ht of re -entry as here?..nafter set fo-rtr�, nor shall the receipt of sal.. rent or any part thereof, or any other act in a_7pparent affirmance of the tenancy, overate as a waiver of tt!e rig',-it to forfeit t' ?1s lease, and t' ^.e term ::Hereby ;ranted for the period still unexpired, fcr any breach of the covenants herein. NOTICE: In the event sai=. association shall default in any of the ter -is, conditions or covenants hereof, and said default shall continue for sixty (60) days after notice thereof in writin; to the Association, then and in eiti:er or any Of such evert s, it s hill be lawful for the Citr, at its election, to de- clare said tcr;_: ended, and with or writ: out _,rocess of law, to I I 1� � re- enter, and said Association and every other person in or upon 2 said premises or any part ti..e-`eof, to expel, reiove and -null- out, 3 using such force as may be necessary in so coin.;, and to reposses� 4 and enjo-t said ra =(_,misec wit " -,.)ut crej_lilce to any rights or re- 5 medies whether by statute or com:,cn lr;,v, v; =sic:: ai, nt `oe used. for 6 breach of any term, covenant or stipulation of ti:.is lease. In 7 ti-As connection c,ith i,raives any co::._lencation for the 8 forfeiture of said terra or the possession of said_ de iseo_ pre - 9 raises by the City, in the event of tr_e forfeitui e of this lease 10 i for any of the causes aforesaid, and hereby waives any demand 11 for the possession of the p- em__ses in the event of the forfeiture 12 of this lease, and agrees that any notice that the City may de- 13 sire or is reouired at any time to give or serve upon the Associa- 14 II tion, with reference to the foregoing covenants, or any other one in this lease, May be sent by registered mail, postage prepaid, 15 �f to the Association, at Lia.c Isle, NcT^ -_Dort 'each, California, or 16 17 may be left at such address in the care of an employee of the 18 Association, or the City may roost suc] notice conspicuously for 19 11 ten consecutive days upon the said described premises, and the 20 iving of such notice in eit'ner v;ay above described, shall con- 21 stitute a g::od, sufficient and. lawful notice in all cases where 22 I by the terms of this lease a notice is re4..t:ired to be given by f 23 said. City to t'e Association. COSTS OF LITIGATION;_ The Association further covenant 24 I to and with the City that in the event said city shall wit':-out 25 any fault on its part, be made a party to any litigation com- 26 menced by or aiainst said Association, that the Association will 27 pay all costs and reasonable attorney's fees incurred by or im- 28 _osed upon said City, by or in connection with said litigation, 29 and the Association wrill pay all costs and reasonable attorney's 30 fees which may be incurred or paid by the City ir enforcing; the 31 covenants of this lease, and all such costs and attorney's fees 32 when paid by said City shall be so much additional consideration i ij 1 2 31 41 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 j 31 I! 32 I is for the granting of t:is lei., "e, CITY'S RE EDI S: It :_s further un_'•.erstood and agreed 1 that the various rights and remedies herein: contained and re- served to the City, shall not be considered as exclusive of any i other right or remedy, but the sane shall be construed as cur.:ula- � tive, and shall be in addition to every remedy now or hereafter i existing at law, in equity or by statute. No delay or admission of the City to exercise any right or power arising from any omission, or default of the Association, shall impair any such right or power, or shall be construed as a. waiver of any such default or any acquiescence therein. No waiver of the breach of any of the covenants of this le_.se shall be construed or held to be a. waiver of any o ther brf�ach or waiver or acquiescence in or consent to any furt_ler or succeeding breach of the sane coven- ant. ADDITIOi AL LAIMS TO 3E ADD) =,D To THE '.'1IT }:Ii? L-AS E: It is specifically understood. and agreed. between the -parties hereto that if any ways, streets or rz"hts of way are vacated by said City, and said ways, streets or ri nts of way are located on any of the above: described premises, then and in such an event said streets, ways and rights of ti:'a,r shall aatomaticelly be included within the description of the real r,;.,o?Derty herein demised, and shall become a part and parcel of t7:.is lease, and it is under- stood and aFLreed that it is conte *:plated that certain sidewalks, ways and rights of way on the above described pro?erty shall be vacated in the mariner -provided for by law, and that said Associa- tion shall pay all the expenses of saic. vacation -proceedings, upon demand. RIGHT OF Tiib; AS:CiCIJIOV TO ',UI1'CLAIa!?R; t,'iISjS; Any- thing to the contrary in this lease notwithstanding:, it is spec- ifically understood and aE:reed by and between the parties hereto that the sEac'. Association may at any time durinE; the term hereof, 9 11 2 3 4 5 6 II 7 II 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 ouitclaim the demised pre ^fees, providing it shall quitclaim the v,'cole thereof to the City ard. u.non said quitclaim being made, shall be relieved of all further liability or responsibility hereunder, and shall further be relieved of the -payment of furt'r rentals as herein provided. Itd sJITIdi'SS 'YVHihrOP, the City of Newport Beach has this day caused its corporate nae to %e signed and its corporate seal to be affixed by its 1.1ayor and City Cler!c thereunto duly authorized by Resolution of its City Council dated the 11th day of June, 1951, and the party of t'r_e second part, LIDO ISLE CO,c,j UNI`PY AtSSOCI ", ION, a non - profit corporation, has hereunto caused its corporate name to be signed and its corporate seal to be affixed by its President and. Secretary thereunto duly authorized by Resolution c,° its Hoard. of Directors, dated the d- ay oC -7 19:'1. CITY OF /1v�JP0 By - -� e:ayor BY�� - �^ City Clerk Party of 7Lhe First Part LIIJO ISLU CCl.;.:UP:T�CIATION, By president B ge-(�retary Party of the Second. Part 10 11 2 3 IiI 4 5 6 il 7 8 9 10 10 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 is.:. been ^e to an De june 11, an 0 L j. s j. e Co-nauni'u._ z r c) c L e b V 'co —i U, 'issoc atjo,- of cer- ain irn(15 on Li;-',o Ir,le r02 of twenty-five Y-Exs, CO::- June 11, 0- ju,:'ie 1.,,D, 1�,7J; - ...were Sts of z c n s of lid -. -- into; 110" 2 Cit±- of 1.evl- --�each -C-c ar.i` tie C4-ty Jle f—e el-Y ut o Pi 7, e d is n(.3. c c e, to C!Xec-use o ol- f T" e above f 0:—�C j. 1- C : r J. e lie C o f o rt —,e 11"i-i il— c-f J�-,ne, "cy e fol ow i,.-, vc e, L.- v I _L I � l L luitv 11,0 1 L Llll�: L -:—LA�,,, — r 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 I6 I7 I8 I9 20 21 22 23 24 25 26 27 28 29 30 31 1- G.. 315OLUTICH No, z 6 z7 WMEAS; there has tars day been presented to the City i Council of the City of Newport Beach a certain Agreement dater the i day of June, 1942, wherein t,.e City of Newport Beach to referred to as the 'City' and tt,e Lido Isle Community Association Is referred t as the and WHER:Jw', 5a1' agreement provides that t ::at certain agreement of lease dater November 21, 1932, between the above named parties, be ame ^ded b; striking teerefr�a the real property therein descrtbed op Farce e 1 '1 *, whic`.. sf:i rfl property is more particularly deacribed in the above aenti.ned agreement; and WHLRUS, it is the opinion and judgment of the City Council, of the City of Newport Beach that it is for the best interests of said city that said Agreement of Lease of date November E1, 1938, be amended as above set forth, and that the benefits which the city will receive therefrom tre sufficient consideration for its amendment. NOM, THZYi EFJciE, BE IT RESOLVED: That t ;e Mayor and City Clerk of the city of NewTor't Beach be, and they are hereby directed, authorised and lnetraeted to execute /alt Agreement in the name of and on behalf of the City of New,artBeach, and the City Clerk 1s Snstr.c'ed to deliver a duly execated copy thereof to the Lido Isle Community Association. I hereby certify that the above and foregoing Resolution was duly and regularly rassed and adopted by the City Council of the city of Newport Beach at a regular meeting thereof held op the lot dq of June, 1942, by the following vote, to -wit: AYS9, COUACIUM EST: lity Clerk 1. NOES, COUNCILMEN: ABSENT, COUNCILME!V: `,2 �_ a � �'"y J �- � ;�:��- y�..c� �--/ �r yy�,!�,�� _ __ _ �� /) .. ,; ✓- AGi;LZMENT AND AMENDMENT OF LASE ThI5 .wade end entered into this day of April, 1942, by and between the City of Newport Bench, a Municloal coroor&tion of the sixt'i, c'.ess of Or >.n.e County, C,lifornia, -arty of the first -art, herel.n&-fter referred to r the "City ", and LIDO ISL7 COta!s:UNI'fI ;SSOCIAT;r.a:, a C= lifornie non- profit corpor&.ti n, with its orincical ^lace of business located In t'r.e City of `e•:r: _)rt Be. - -ch, range County, C 11ifarnis:, party a' the second r;art, hereinafter referred to as the "Association ". W I i_ i;, S S L T 1i Mllzlls:AS, the srties hereto did on or about the ?let aay of Nove:bber, 1938, enter into a certain instru;aent in vriting Wr i— in designated "A- reem-nt ", which raid agreement covered and a r_ ffected certain real �ronerty belonrting to t'' ^e city of ",e,, -ort Bey: ch; and "WHEREAS, the said oarties desire to change and &.;:end th<:t certain descri ^tion designated :arcel "E" in said agreement, t.; read as follows: All thet certain real oro -erty situsted in the City of New ort Beach, County of Oranj,e, State of Califon la, and more - articulErly described as follows, to -ult: ;?ARCLL E All those certain tidelands, eub-?erged lands, .nd overflow lands in e° ort Bay, lyin, in Section 28, 'lownehlr. 6 S,:!uth, tz:n; e lu =lest, S. B. B & i„ described as follo:,-s, to -wit: A stric of land 60 feet in width, oarFliel to -,.nd aJ4 cent to and bayarsrd of U, Gov= rn..ent Bulkhead line between U.S. Station No.124 nand U, S. StEVt )n No. 125, as said govern!..ent bulkhead line and r.trtions are laid out and s .own upon =: :a &o entitled "'.larbor Lines, Newnort Bay i3trb.;r, Cs,iif! rni & ", ao roved by t e Aetin Secret &ry of + -:r ` ^ ^.y ^nd, 1936, a copy of r:: ?d :s^ bean , on file in the U. S. njTineer's 1. db Office, Loa Angeles, .].ifornia, and extending from the 'North- easterly prolonw� ti -n t:f the Norte erly line of Lot 1122, as a,.--td Lot 1122 is laid out rand shown uoon a map of "Tract 907; e:s recorded in Miecella.neousr naps, Book 28, California, the3Northerly inclusive, Records of Orange County, line of that certain rublic right of way 100 feet in width, as said e.:blic right of Garay is described in Deed of Ease^ent for Street uuroosee to the City of ,ies,ort Beach, recorded February 200 1930, In BoA 381, page 110 of official Records oe said County, s &ld ;,ublic right of way being the easterly eytension of Via Lido, as s:: id Via Lido is lain out s.nd shoe „•n upon s id of Tract Reserving unto *.`e City of New ort Beach all streets, side,..!,.: -lks, ways, rand rights of way of every nature, de cri�tion or yia., with the full right of ingress and egress and the right to o in and on P- id nr•onerty, for the purooee of canetructing, reconstructing, repr:iring en_ c.,nc.iitioning of all public or_nerties t .r =on loonted, or any n&rt al- oarcel of the sbove described cremisee. And WHEREAS, the City Council of the Cit :.f Nea.:a:-rt Bets' cee,ae ti-.at it it for the "per*, interests of s:::id city that the renal c•rc -ert,y uescr =bed F',s ?:reel "E” in Ez id agreement �.,f November 21, 1938, b= ch :,n� ed and ar:,ended to read as heretofore set forth; and WhEREAS, the City Council of the City of `<evr ^ort Beach believes that id f:miendment to s• i.d agreement will rr•otect nubllc >: onerty and more: -oa.rticularly will protect the bridge a-- roeches to Lido l.sle. TN'S AC- 912: ^: , P:T F17RTH it wI'T':'•ie : ETH: Th:t for and in consideration of ti;° ore:eisee anu other valuable conaider:ti.ns it is mutually pureed between s ^id - arties as fall:!'s: That th.t bertr:in _green ,-nt heretofore mentioned be amended and. changed so that the descriotion of the real oroerty described in Farce' `'c:" of ?ts ,1d agree.a°nt of November 21, 1938s ehal.l read rs heretofore set firth S.n thie aaream °.nt. Lxceut as said agreement of November 21, 1038, shall have been emended & +nd chr:nged by this agree ^a==nt, the erne shall 2. remain in full force and effect, the narties hereto agreeing thFt se.id agreement has been fully comnlied with to date ier >of. IN WITNESS ?cwOr, the City of Newiort Beach has this day csused its corporate name to be signed and its corrorate seal to be affixed by its Mayor and City Clerk thereunto duly authorized by resolution of its City Council doted the day of , 19420 , =na the party of the second nart, LIDO ISLE CIATIi_^1, a non - profit cor ^oration, has hereunto c-.ised its corrorate n_me to be signed �..nd its corrorate serl to be sffixed by itr "reeident ane `:ecret:ry thereunto duly auth ^razed by Resol,tin ef' it> 13 ^ard -f Directore dated the asy of _.� , 1942. CITY C +F fdE i ORT BEACH By Mayor By City Clerk Party of the first hart LIDO ISL_ C0M ".'UNITY ;SSJCZ >TIr)<.` By Presl:ent By Part of the second -art 3. Secretar y w % 1 0 RESOLUTI011 WHEREA`.', there h&c t'rtf: day been oreserted to the City Council of the City of L'b';T^ oat Beach a certain agreement r.nu ,rnenda:ent of lease, dated April 1942, by sod between t ^e " ity cf : .!-:.)rt Beach as the ,arty of the first. ^art nd the Lido Isle ComTunity Association as the warty of the ^coot -art-, na :'fF:1F:', said r,.mendment of lease rrovides thf:t the real ^r aerty set forth in thft certain Pgreement betTAeen the ,above mentioned parties and dated November Pl , 1942, and therein aenignated Parcel "E", be chan,r.ed find !.mended to rend Fs follows: All the.t certain real nro •erty situhted in the City of 2:;e:•:nort ,299.ch, Colfnty of S)ry n, e, :mot =,t� of California., and more al-ticularly described ss follows, to -sit: FGrcel " ^" +11 those certain tidelands, submerged lands, sw - -iM and overfl :ter 1: nde, In =r 'Cart Bay, lyinr:- in Section 28, To:,mEhin 6 South, R.nge 10 +'est, S. B. B. & M„ described as fol.ows, to-,,.,It: strip of land 60 feet in width, cs rali.el to e=nd P.cent to sane+. b "y' .,F, r'd of U S. Govcr. ns•ent ^ul char..: line between U. 5. St:,tiu: No. 124 =na U. S. StatiDn No. 125, aF, .7- ermnent 'bulkhead line eanar rtC,t1' ,ns are laid o!zt ^.nd sh ,D;;n a on 1iIF7; ntitled "Hr..rbor Lines, i -.;n rt Bay Yarbor, Cr.iiforiaa ", a -.r�r•oved by the Acting Secretary �f ids r ,y 2nd, 1936, coat' of F' 1(a aan sizing on fiLe in the U. S. 'nvineerIa Office, Los Angeles, C.ulIforr.[e, errs extending. fro.ii the lcrth- easterly crolon ation of the Northerly line of Lot 1122, as sr.id Lot 1122 is laid out and shT n upon, a map cf "Tract 907; as recorded in 'MiEcellaneous Laos, Book 28, pages 25 to 36 inclusive, Records of grange County, California, and the NortterlY line of that certain oubllc right of way 100 feet in width, as s!.id public right of way is described in Deed of EeGement for Street purnoses to the City of ti c.- : -..ort Beach, recorded February 26, 1930, in Book 361, rage 110 of `'.Tficiai Reccrde of said County, senid ublic right of Tray being the east-rly extension of Via Lino, an -z iu Via Lido is laid out and shown upon s.:id cfsn of Tract No. 907. Reserving unto the City of ?',v.-ocrt Beech ell streets, sidew lrs, ways, ann rights of *.• y of every nature, desert -tion or kind., v1th the full right of ingreP67 an e;-rees na V right tr, rro In and on ssic cro erty, for the purnore o`" constructing, reconvzructir;F , rer.siri.T F . n;l con::ltionint of e:li nublic r - :, artiest :,erFOn loc, :ted, ?r sny „art or ^.arcel of the above described - reai'_ser. 1. I* . U And WHEREAS, the City Cou : -Ic11 of the City of Newoort Beech believes th&t it is fcr tare best interests of the City of Ne:,T,00rt Beach that the re_1 -pro -.erty described as Parcel "E" in se.id agreem nt of date November 21, 1938, be changed and a-nended to rPFd t s h.zr-!t.fore set forte:., and tht:t said amendc,ent t said agree.:�nnt --li11 protect public prooerty F.nd more articulsrly will eroteet the bridEe ar_roachee to Lido Isle. h. -",' H ^.SOLHED: That the ;ayor• ana City Cler'- of the City of ? etroort BeFoh be, &nd they are r :ereby directed, instructed and authorized to execute se +id !., ;aendment of lease; to the ~gym? of r_n3 on behi.if of the city of 'e,,: ^ort Beach. i hereby certify that tiie above and foregoin> resolution Tv-- duly and regal. rly -aosed and F:uo ted b =, t e ility Council of the City of i!e. :.oat 3e: =:eh a E. re idler meeting therecf• :geld -.:e a,:y ^f , 1942, by the folliwlni� vote, to -wit: AYi �, CO[J *�1Li :Eti: lib :1 F, &&TEST . City Clerk Mayor . N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 of LAW OFFICES OF ROLANO THOMPSON 210 SPURG90N BUILDIN( SANTA ANA. CALIFORNIA S q AGFtE'Et_ " ".EN T THIS AGREEMENT OF LEASE made and entered into this Fifth, my of Hecember, 1938, by and between the City of Newport Beach, a Municipal CorporatiOn of the sixth class of Orange County, California, party of the first part, hereinafter referred to as the "City", and LI.O ISLE COi-19UNITY ASSOCIATIO a California non - profit corporation, with its principal place of business located in the city of Newport Beach, Orange County, California, party of the second part, hereinafter referred to as the "Association ". -- W I T N E S S E T H - - WHEREAS, the City is the owner of harbor frontage and tide lands in the city of Newport Beach, together with certain uplands abutting thereon, all in the city of Newport Beach, County of Orange,State of California, hereinafter more particularly described; and WHEREAS, in the judgment of the City Council of the City of Newport Beach it is for the best interests and welfare of said City and the residents thereof, to lease said lands hereinafter described to the Association for the purposes herein- after set forth, for the consideration hereinafter mentioned, and under the terns and conditions of this lease; and WHEREAS, in the judgment of the City Council of the City of Newport Beach the use of the tide lends and uplands abutting thereon, hereinafter described, for industrial uses, would be inimical to the best interests of said city, for the reason that Newport Harbor in said city has been developed, improved and dredged as a pleasure harbor and not a harbor to be used for industrial purposes, and there are no industries 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 16' 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 LAW OFFICES OF ROLAND THOMPSON 310 SPURGEON SUILDINI I SANTA ANA. CALIFOFNIA /L2 MA. of any description immediately adjoining said lands to be leased, and the lands adjoining the lands herein mentioned are zoned for residential purposes only; and WHEREAS, it is t:.`present intention that the tidelands and. uplands abutting thereon, owned by said city, shall never be used for industrial purposes, and shall be kept for park, recreational, residential and educational purposes; and WHEREAS, it is the judgment of the City Council of the City of Newport Beach tiat the leasing of said lands herein- after described, to the Associaton, upon the conditions in this agreement specified, is not inconsistent with the trust imposed upon such portion of the lands hereinafter described, which may constitute tidelands or harbor frontage under the General Lars and Constitution of the Sta:e cf California; and WHEREAS, a. portion of the lands hereinafter described constitute tide lands and water frontage and a portion thereof constitute uplands abutting thereon; and WHEREAS, it is further the judgment of the City Council of the City of Newport Beach that the uplands hereinafter described cannot be used without the tidelands, nor c;.n sa.id tidelands be used without the uplands abutting thereon, and it is further the judgment of said City Council that the leasing of the whole of said lands hereinafter described as one parcel is necessary for the proper development and use of said lands, water frontage and tidelands, for recreational, residential and educa- tional purposes, and it is further the judgment of the City Council of the city{ of Newport Beach that the leasing of said lane for said purpose is necessary for the proper development of Yewpoi Harbor and the Frowth of the City of Ne=wport Beach as a residentie section; and 2. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 LAW OFFICES OF ROLAND THOMPSON ]IO SPURGEON BUILDING SANTA ANA, CALIFORNIA 96 s • WHEREAS, it is the intention of the Association to keep all the lands hereinafter described for park and recreational purposes, and no buildings or other structures shall ever be erected or constructed thereon. NOW, THEREFORE, TYIS AGREEIJENT ='URTMER WKNESSETH: That the City, faran,d in consideration of the rents herein reserved, and the covenants and agreements herein contained cn the part of the Association to be kept and performed, has demised and leased and does 17 these presents demise and lease unto the Association that certain real property situated in the City of Newport Beach, County of Orange, State of California, and more particularly described as follows, to -brit: PARCEL "A" All those certain tide lands, submerged lands,swamp and over -flaw lands in Newport Bay,, lying partly within Sections 27, 28, 33 and 34, Township 6 South, Range 10 West, S. B. B. & H., described as follows, to -wit: A strip of land ten (10), feet in width parallel to and adjacent to and baywa.rd of the United States Govern - ment Bulkhead Lines between U. S. Station Nos. 170 and 171, between U. S. Station Nos. 171 and 172, between U. S. Station Nos. 172 and 173, between U. S. Station Nos. 173 and 174, between U. S. Station Nos. 174 and 175, and between U. S. Station Nos. 175 and 170, as said Government Bulkhead Lines and Stations are laid out and shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California" approved by the Acting Secretary of War on May 2nd, 1936, a copy of said map being on file in the United States Engineers office, Los Angeles, California, excepting therefrom that certain public right of way 100 feet in width, as said public right of way is described in Deed of Ensement for Street Purposes to the City of Newport Beach, recorded February 26th, 1930 in Book 361, page 110 of Official Records of Orange County, California, said public right of way being the Westerly extension of Via Antibes, as said Via Antibes is laid out and shown upon a map of Tract No. 907, as recorded in Miscellaneous Maps, Book 2B, pages 25 to 36 inclusive, Records of said Orange County. PARCEL "B" All those certain uplands abutting on tidelands, submerged lands, swamp and over -flow lands, as described in Parcel "A" hereof, described as follows, to -wit: 3. i WHEREAS, it is the intention of the Association to keep all the lands hereinafter described for park and recreational purposes, and no buildings or other structures shall ever be erected or constructed thereon. NOW, THEREFORE, TYIS AGREEIJENT ='URTMER WKNESSETH: That the City, faran,d in consideration of the rents herein reserved, and the covenants and agreements herein contained cn the part of the Association to be kept and performed, has demised and leased and does 17 these presents demise and lease unto the Association that certain real property situated in the City of Newport Beach, County of Orange, State of California, and more particularly described as follows, to -brit: PARCEL "A" All those certain tide lands, submerged lands,swamp and over -flaw lands in Newport Bay,, lying partly within Sections 27, 28, 33 and 34, Township 6 South, Range 10 West, S. B. B. & H., described as follows, to -wit: A strip of land ten (10), feet in width parallel to and adjacent to and baywa.rd of the United States Govern - ment Bulkhead Lines between U. S. Station Nos. 170 and 171, between U. S. Station Nos. 171 and 172, between U. S. Station Nos. 172 and 173, between U. S. Station Nos. 173 and 174, between U. S. Station Nos. 174 and 175, and between U. S. Station Nos. 175 and 170, as said Government Bulkhead Lines and Stations are laid out and shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California" approved by the Acting Secretary of War on May 2nd, 1936, a copy of said map being on file in the United States Engineers office, Los Angeles, California, excepting therefrom that certain public right of way 100 feet in width, as said public right of way is described in Deed of Ensement for Street Purposes to the City of Newport Beach, recorded February 26th, 1930 in Book 361, page 110 of Official Records of Orange County, California, said public right of way being the Westerly extension of Via Antibes, as said Via Antibes is laid out and shown upon a map of Tract No. 907, as recorded in Miscellaneous Maps, Book 2B, pages 25 to 36 inclusive, Records of said Orange County. PARCEL "B" All those certain uplands abutting on tidelands, submerged lands, swamp and over -flow lands, as described in Parcel "A" hereof, described as follows, to -wit: 3. l 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 LAw OFFICES OF ROLAND THOMPSON 210 6FURGEON BU1LDIN SANTA ANA. CALIFORW, • 00 0 • Beginning at tie most northerly corner of Lot 875, as laid out and shown uron a man of Tract No. 907, as recorded in Miscellaneous Maps, in Book 28, pages 25 to 36 inclusive, Records of Orange County, California., said point of beginning being in the United States Government Bulkhead Line between U. S. Station Nos. 174 and 175, as laid out and shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California" approved by the Acting Secretary of War on May 2nd, 1936, a copy of said map being on file in the United States Engineers Office, Los Anmeles, California; running thence Easterly along said bulkhead line on a curve concave to the south and having a radius of 150 feet through an arc distance of 126.20 feet to said bulkhead Station No. 175; thence South 610 00' East alone the United States Government bulkhead line 5,176.30 feet to U. S. Station No.170; thence South 230 001 West along. the United States Government bulkhead line between U. S. Station Nos. 170 and 171, 50.28 feet to the most easterly corner of Lot 329, as laid out and shown upon said man of Tract No. 907; thence North 610 001 ';lest along the northeasterly boundary line of said Tract No. 907, 5,293.40 feet to the point of beginning; and including Lots A, E. F. G. H. I and J, as said lots are laid out and shown upon said map of Tract No. 907, excepting therefrom all easements for public utilities, street lighting, storm drains and public ways opened or dedicated for public purposes as of records. PARCEL "C" All those certain tidelands, submerged lands, swam= and over —flow lands in Newport Bay, lying in Section 34, Township 6 South, Range 10 test, S. B. B. K M., described as follows, to —twit: Beginning at an angle point in the southerly boundary line of Tract No. 907, as laid out and shown upon a map recorded in Miscellaneous Maps, Book 28, pages25 to 36 inclusive, Records of Orange; County, California, which point of beginning. is South 750 17' 40" East, 1.49 feet from the most westerly corner of Lot 441, as shown upon said map of Tract No. 907; running thence South 750 171 40" East along the southerly line of said Tract No. 907, 919.87 feet to an angle point which is South 750 171 40" East 13.28 feet from the southwesterly corner of Lot 22 of said Tract No. 907; thence south 680 52, 44" East along the southerly line of said Tract No. 907, 702.59 feet to a point in the United States Government Bulkhead Line between U. S. Station Nos. 172 and 173, as laid out and shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California" approved by the Acting Secretary of War on May 2nd, 1936, a copy of said map being on file in the United States Engineers Office, Los Angeles, California, said point bears North 720 311 West, 504.80 feet from said U. S. Station No. 172; thence North 720 31' West along said bulkhead line 1,619.97 feet to the point of beginning. 4. 1 PAKEL "D" 2 All those certain uplands abutting on tidelands, 3 submerged lands, swamp and over -flow lands, as described in Parcel "C" hereof, described as follows, to -wit: 4 Lots B, C, and D,as said lots are laid out and 5 shown upon a mar of Tract No. 907, as recorded in Mis- cellaneous Maps, Book 28, pages 25 to 36 inclusive, Records 6 of Orange County, California;, excepting therefrom all easements for public utilities, street lighting, storm drains and public 7 ways opened or dedicated for public purposes as of record.. 8 PARCEL 11711 9 10 All those certain tidelands, submerged lands, swamp and overflow lands in Newport Bay, lying in Section 11 28, lownship 6 South, Ranre 10 W., S. B. B. & V., described as follows, to -wit: 12 A strip of lane. 10 feet in width, parallel to anci 13 adjacent to and bayward of U. S. Government Bulkhead line between U. S. Station No. 124 and U. S. Station No. 125, as 14 said government bulkhead line and stations are laid out and shown upon a man entitled "Harbor Lines, Newport Bay Harbor, 15 California" approved by the Acting Secretary of War May 2nd, 1936, a copy of said map being on file in the U. S. Engineers 16 Office, Los Angeles, California, and extending from the North- easterly prolongation of the Northerly line of Lot 1122, as 17 said Lot 1122 is laid out and shown upon a man of Tract 90 ?, as recorded in Miscellaneous Maps, Book 28, pages 25 to 36 18 inclusive, Records of Orange County, California, and the Northerly line of that certain public right of way 100 feet 19 in width, as said public right of way is described in Deed of Easement for Street purposes to the City of Newport Beach, 20 recorded February 26, 1930, in Book 361, page 110 of official Records of said County, said public right of way being the 21 easterly extension of Via Lido, as said Via Lido is laid out and shown upon said man of ".Tact No. 907. 22 23 Reserving unto the Cite of Newport Beach all 24 streets, sidewalks, ways, and rights of way of every n,;ture, description or kind, with the full right of ingress and egress 25 and the right to go in and on said property, for the purpose of constructing, reconstruction, repairing and conditioning 26 of all public properties thereon located, on any part or parcel of the above described premises. 27 28 PURPOSE: For the sole purpose of using said 29 lands for recreational, educational and civic purposes. 30 TERM: To have and to hold the same with the 31 appurtenances thereunto belonging, for and during the term of I 32 twenty —five (25) years, commencing as of the 21st day of November, LAW OFFICES OF 1938, and ending as of the 2lat day of November, 1963. ROLAND THOMPSON 210 SPURGEON BUILDING SANTA ANA. CALIFORNIA 5. �9 1 2 3 4 7 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 LAW OF Qw OF RO"NO THOMPSM 'M SPUME= Dul"A SANTA ANA, CALIF1 wel - 00 00 I CONSIDERATION. The said Association agrees and covenants to pay for said lease the sum of Eighteen Thousand Seven Hundred fifty Dollars (818,750.00), payable as follows, to -Wit; 55750.00 upon fte signinx of these Presents, the receipt of which is hereby ncknowledred V i� e City, and inn balance of said saw, to-wit, 4!2,000.00, at the rave of 0720.00 a Year, payable in advance on t 31st day of November of each year hereafter during the term of this lease. TERTHER C?7V`TDTFAT1n7. The Association agrees and 2ove- nants to keep oaiV -Mmisys in " clean and sightly condition, free from weeds, Tqbbish, papers or other debris. FTIRTHER CATSMEWT100'. FURTHER Said Association further arrees nnc covenants that as a part of the c-nsiNeration for this lease that it will dnriny the term hereof keep in land condition a repair the piers and floats jocvted upon the above described real property, and further agrees that when said property mentioned �herein under the heading, "Additilnul Lands to be added t? the wi. in Lease" shall be added to the rcal property herein described, that it will during the term of this agreement matntain in wood Flonndition and repair the north and south promenades, the bulkhead and sidewalks xonniny io these promenades, and all other public improvements thereon located, excent that the City agrees to continue the maintenance of street lights, conduits and storm drains now locateu on said demised premises. ,,,,truct, or attempt to erect or cnnptrnct any building, build, .i.nvs or other structnre unnn said demised premises, or unon any nart or I01tinn thereof, without the nrioT written consent of said City. TAXE5.�;�:..7 ��SSESF-77T& it is understood W arreM that j_ this leasp shall not EFTExed—W s0d MY, in as much as said denised premises shall only be used b" said Association for nark, educational, recreational RnS civic purposes as aforesaid. ASSIGNEENT OF LEASE. The Association further covenants and apees with TTe City that it will not assign this lease or any inierest therein, or sublease or sublet said premises or any part thereof, without first obtaining the 6. FURTHER ST.P1_10L17_ In consideration of the forepoing said Association covenants and. agrees that it will not erect Or ,,,,truct, or attempt to erect or cnnptrnct any building, build, .i.nvs or other structnre unnn said demised premises, or unon any nart or I01tinn thereof, without the nrioT written consent of said City. TAXE5.�;�:..7 ��SSESF-77T& it is understood W arreM that j_ this leasp shall not EFTExed—W s0d MY, in as much as said denised premises shall only be used b" said Association for nark, educational, recreational RnS civic purposes as aforesaid. ASSIGNEENT OF LEASE. The Association further covenants and apees with TTe City that it will not assign this lease or any inierest therein, or sublease or sublet said premises or any part thereof, without first obtaining the 6. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 LAW OFFICE$ OP ROLAND THOMPSON 210 SAURI.QN BUILDING $/.NTT ANw. G1lIF OP NIA written consent of_,the city, and further agrees and covenants that it will not mortgage or er.o7mber said leasehold interest, will if said Association ceases to exist, promptly quitclaim 11 its right, title and interest in and to said lease and every Dart a5d portion thereof. CITY'S COVENAHT ^_- ;_- %I L ENJOYMENT, The saza City hereby and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 LAW OFFICE$ OP ROLAND THOMPSON 210 SAURI.QN BUILDING $/.NTT ANw. G1lIF OP NIA written consent of_,the city, and further agrees and covenants that it will not mortgage or er.o7mber said leasehold interest, will if said Association ceases to exist, promptly quitclaim 11 its right, title and interest in and to said lease and every Dart a5d portion thereof. CITY'S COVENAHT ^_- ;_- %I L ENJOYMENT, The saza City hereby and upTccs that the Association, performing the covenants, teT- n Pnr c-nri.tions of this lease on its Part to it Yert and Performed, may andshall have the right at all times durinp me term of this lease, to quietly and peaceably hold, possess, use, occupy and enjoy said leased land and premises. LIWIDATED DAMAGES: The Association covenants and agrees that it rill, upon the termination of this lease, by forfeiture or lapse of time, yield up immediate possession of said demised premises, together with all the improvements thereon, to said City, or to pay, upon failing so to do, as liquidated dama.Fes for the whole tile such possession is withheld, the sum of "500.00 per month, but the provisions of this clause shall not be held as a waiver by said city of any right of re -entry as hereinafter set forth, nor shall the receipt of said rent or any part thereof, or any other act in apparent affirmance of the tenancy, operate as a waiver of the right to forfeit this lease, and the term hereby granted for the period still unexpired, for any breach of the covenants herein. NOTICE.: In the event said Association shall default in any of the terms, conditions or covenants hereof, and said default shall continue for sixty (80) days after notice thereof in writing to the Association, then and in either or any o_ such events, it shall be lawful for the City, at its election, to declare said term ended, and with or without process of law, to re- enter, and said Association and every other person in or upon 7. i� N • 1 said premises or any part thereof, to expel, remove and put out, 2 using such force as may be necessary in so doing, and to 3 repossess and enjoy said. premises wit'_,out prejudice to any 4 rights or remedies whether by statute or cocron law, which mii7ht 5 be used. for breach of any term, covenant or stipul,.tinn cf this 6 lease. In t1.is connection the .,5sociation waives any conipens¢a,tion 7 for the forfeiture of said term o' the possession of said deei`.sed 8 prepises b,* t:1- Cit_:r, in the event o the forfeiture of this 9 lease for any of the causes aforesaid, and hereby waives any 10 demand for the posses inn of the premises in the event of the 11 forfeiture of this lease, and a ,gees teat any notice that the City 12 may desire or is rec1u4_red at any time to give or serve upon the 13 Association, 1°ith reference to "-he. foregoing covenants, or any 14 other one in this lease, r ^ay be sent ov rer:istered mail, po�!taf,-e 15 prepaid, to the Association, at Lido Isle, Newport Reach, 16 California, or may be left at such address in the care of an 17 employee of the Association, or the City May post .,:,ch notices 18 conspicuously for ten consecutive days upon the said described 19 premises, and the givinv of such notice in either ti ^ray above 20 lesori.bed, shall constitute a good, sufficient and lawful notice 21 in all cases where by the tere;s or this lease a notice is 22 required to be given by, said City to the Assoc4.Ltion. 23 COSTS OF LITIGATION. The Assocition further 24 covenants to and with the City that in the event said city shall 25 without any fivolt on its part, be rude a party tc any li.ti.:•.,ation 26 cors:nenced by or a4 ,in ,t a,i.d. Association, that the association 27 will pay all cosh and reasonable attorney' fees incurred by or 28 imposed upon said city, br or in connection erith said litic- ati.on, 29 an,� the Association viii pay all. costs and reasonable attorney's 30 fees which may be incurred ^.. *_ paid by the City in enforcing^ the 31 covenants o:P this lease, and all such costs and attorney's fees 32 when paid by sp;id City shall be so much additional consideration LAW OFFICES OF ROLAND THOMPSON for the granting of this lease. 210 SPURGEON BUILDING SANTA ANA. CALIFORNIA g. ,o 60 1 CITY'_° REMEDIES. It is further understood. and. 2 agreed that the various rights and remedies herein contained and 3 reserved to the city, shca._ -1 no7 be considered as exclusive of 4 any other right or remedy, but the same shall be construed as 5 cumulative, and shall be in addition to every remedy now or 6 hereafter existing at law, in equity or by statute. No delay 7 or admission of the city to exercise any right or power arising 8 from any omission, or default of the association, shall impair 9 any such right or power, or shall be construed as a waiver of 10 any such default or any acr;_uiesence therein. No waiver of the 11 breach of any of the covenants of this lease shall be construed 12 or held to be a waiver of any other breach or waiver or 13 acquiesence in or consent to anv further or succeeding breach 14 of the same covenant. 15 ADDITI?NAL LANDS W BE ADDED TO TFE "I THIN LEASE. 16 It is specifically understood and agreed between the parties 17 hereto that if any ways, streets or rights of way are vacated 18 by said city, and said ways, streets or rights of way are 19 located on any of the above described premises, then and in 20 such an event said streets, ways and rights of way shall 21 automatically be included within the description of the real 22 property herein demised, and. shall become a part and parcel 23 of this lease, and it is understood and agreed that it is 24 contemplated that certain :sidewalks, ways and rights of way 25 on the above described real property shall be vacated in the 26 manner provided for bv law, and that said Association shall pay 27 all the expenses of said vacation proceedings, upon demand. 28 RIGHT 07 THE ASSOCIATION TO 7UITCLAIM PREMISES. 29 Anything to the c ntrary in this lease notwithstanding, it is 30 specifically understood and agreed b-r ani between the parties 31 hereto that the said Association may at any time during the LAW OHIO O32 ROLAND THOMPSON 310 SPURGEON BUILDING SANTA ANA. CALIFORNIA e .n terry, hereof, quitclaim the demised premises, providing it shall 9. ,t 5 6 7 8' 7 10 11 12 13 14 15 16 1 17 18 19 20 21 22 23 24 25 26 27 28 29 Y 30 31 32 I. GOFFICE$ OF ROLAND THOMPSON 210 SPURGEON BUILDING SANTA1 ANA. CALIFORNIA .l ! quitclaim the whole t_:ereof tc 'I- City, and upon said quitclaim being made, shall be relieved of all further liability or responsibility hereunder, and shall further be relieved of the payment of f.,rther rentals as herein provided. IN '.'MNESS ',VFEEREOF, the City of Nev;nort Beach has this day caused its corporate Name to be signed and its corporate seal to be cfffixed by its M:avor and City Clerk thereunto duly authorized by resol•.ztion of* its Citt Council dated the Fifth day o: December, 1938, and the party of the second part, LIDO ISLE CO' ^: "UNITY = LSSOCIATION, a. non - profit corporation, has hereunto caused it.5z corporate name to be sip..•ned and its corporate Assistant seal to be affixed by its President and /Secretary thereunto duly authorized by Resolution of its Board of Directors, dated the Firth day of December, 1;;38• CITY 07 `IE'7PORT BENCH, Party of the first Part Mayor City Clerk LIDO ISLE COT IMITITY ASSOCIATION, 7 By `� ✓i` -- Pre sid.ent y / Assistant Bccretary Party of the second part 19. 1 2 3 4 ,t 5 6 7 8' 7 10 11 12 13 14 15 16 1 17 18 19 20 21 22 23 24 25 26 27 28 29 Y 30 31 32 I. GOFFICE$ OF ROLAND THOMPSON 210 SPURGEON BUILDING SANTA1 ANA. CALIFORNIA .l ! quitclaim the whole t_:ereof tc 'I- City, and upon said quitclaim being made, shall be relieved of all further liability or responsibility hereunder, and shall further be relieved of the payment of f.,rther rentals as herein provided. IN '.'MNESS ',VFEEREOF, the City of Nev;nort Beach has this day caused its corporate Name to be signed and its corporate seal to be cfffixed by its M:avor and City Clerk thereunto duly authorized by resol•.ztion of* its Citt Council dated the Fifth day o: December, 1938, and the party of the second part, LIDO ISLE CO' ^: "UNITY = LSSOCIATION, a. non - profit corporation, has hereunto caused it.5z corporate name to be sip..•ned and its corporate Assistant seal to be affixed by its President and /Secretary thereunto duly authorized by Resolution of its Board of Directors, dated the Firth day of December, 1;;38• CITY 07 `IE'7PORT BENCH, Party of the first Part Mayor City Clerk LIDO ISLE COT IMITITY ASSOCIATION, 7 By `� ✓i` -- Pre sid.ent y / Assistant Bccretary Party of the second part 19. 40 SI'A)[ 01= CALIFORNIA, "S. CourrV of .... ... I ON TFiis 7th___..__. day of Becenb r A.D., 19. 3, before me, --------------------------- -- a Notary Public in and for said County and State, personally appeared r, - e",r ;__, I - 3 -:if 1s: � ant L J_ -2- E"Lu_ --und. L�t a, known to me, - - --------- ------ ----------- ------------------ to be the person ~_.whose name ---- -- -Subscribed to the within Instrument, and acknowledged to me that.. _they__ executed the same. IN WITNESS WiirRE(,F, I have hercunlo set my hand and affixed my ofiiceat seat the day and year in this certificate first above written. '"unary Public in and for said cnanty and State. i J —ury—rO —19 --IQ r. I ��jdre� at FL ACKNOWLE�GMENT— GENKRA�—WOLCOTTG FORM 2�3 M1 �! 1 RESOLITTION NO. 2 3 WHEREAS, trere hits this day been presented to the C t')' 4 Council of the Cit.•r of Newr:^•rt Beach a certain. Af-reom,Cnt )' Lease 5 dated the Fifth .'r v " December 1938, wherein the City of Yei*,1nort 6 Beach is desiE:xated a7 -,,..rtv of the First part, Md Lido Isle 7 Com.-unity As.- ociation, is referred t) a.s Par.tY of the second ,.art; 8 an 6. 9 i,FERFAS, said Agreei.ie t -,-F provides for the leasing 10 t.^ ..' -_e l:arty of the second i)art cent n harbor frc,ntac -e and tide - 11 l +.nds in t.ite City of i? °'`! ?`'rt Beach, together ',ti'_ti. certain • „l..nd:. 12 ab.:tting- thereon, -for the s.:rn of zu'1E,750.00 for a twenty -five 13 year period, payr:.cle at the rate of u11 ?E0.00 per year, said lands 14 tc be used exclusively for recreational, educaticlnal, park and 15 civic curposes, said le %use to cor�.mer.ce as o.'' December Fifth 1`3.,N > 16 an^ to end as of December Fifth 1963; and. 17 YlHEHEAS, thc. Ci_ +s- Ce,:noi 1 0:`' the Cjtv of Newport Beach 18 deems the consid.eraticn for s«id lease is fair, just and a,ce:nua.te 19 and that it is for thr, best i:terests of said City that said 20 Aoreement of Lease be entered into with tle party of the second 21 part, and that the lands therein de:cribec be leased to sa.S.d 22 hart^ of the second r.:art upon the ter!na and conditions, and for 23 the con?lderationS therein me.nti -ed. 24 NO',," THE°ETFORE, BE 171 RE30LVED: That the Mayor and City 25 Clerk the City cf Ner✓::,rt Bea.ch re, am t ^.ey are hereby direct - 26 ed, authorized and instructed to execute said Agreement of Lease 27 in the name of and on l.ehalc o'' t'-,e City of Newncrt Beach, and the 28 City Clerc is instructed to deliver a duly executed copy thereof 29 to the party of the second part therein named. 30 31 I hereby certify that the above an,- foregoing ReFolutinn 32 irvas dt1ly and rep:alarly passed and adopted by. the City Council of LAW OFFICES OF ROLAND THOMPSON 310 SPURGEON BUILDING 1 SANTA ANA. CALIFORNIA t ti 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16' 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 LAW OFFICES OF ROLAND THOMPSON 110 SPURGEON BUILDIN< SANTA ANA, CALIFORNIA !0 00 T . . the C`:tv of N:wport Beach at ar <:d.jnurned reg.lar meeting thereof held ^_n the P3fth dap o` December, 193?, b,,r the fo110 ink vote, to —wit: AYE c7J174CTL2,2N: \ kI NOES , COUNC TLYEN ABS _�'T, COITNCILMEN: i avor c_' the city of Nowrcrt BF.aco Beach 2. 0 ;•2ai ^ : me c 2/6/59 CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY SUMMARY OF CITY'S LIDC ISLE COMMUNITY LEASE I. GENERAL INFORMATION Parties to Lease City of Newport Beach, Lessor Lido Isle Community Association, Lessee Date of Lease June 11, 1991 City Council approval Original Land Location See ;lap Source of City's Title Approximate Area 12.' ?5 ac lease 3894 June 11, 1951 Res. No. Date adopted Tidelands Frontage res 6,fater Street 12,129.00' 1,150.00" Includes Anchorage Area II. LEASE DURATION No. years: 25 From: June 11, '.951, to June 10, 1976. III. LEASE PROVISIONS Rental: $18,750 total; $750 payment for first year by $413.05 in cash on execution of agreement and $336.85 credit to Lessee from Lessor; commencing June 11, 1952, $750 per year, payable in advance on June 11 of each year. Purpose: Solely for recreational, educational and civic purposes. Repairs: Lessee to keep premises in a clean and sightly condi- tion, free from weeds, rubbish, papers or other debris; to keep in good condition and repair the piers and floats, north and sough promenades, and all other pub- lic improvements; and not to erect buildings thereon without prior written consent of Lessor. Lessor to maintain street lights, conduits and storm drains. Assignability: Lessee not to assign or sublet without prior written consent of Lessor, and not to mortgage or encumber leasehold interest. Renewal: No provision. Terms of default: Upon default by Lessee, continuing for 60 days after written notice to Lessee, Lessor may declare term ended and re -enter premises; Lessee waives compensa- tion for forfeiture or possession; Lessee to pay all costs and fees of Lessor in connection with litigation against Lessee by others, or in enforcing Lease. Taxes: Lease not to be taxed by Lessor, in view of use of premises for park, educational, etc., purposes. Insurance: No provision. '1 1 1 1 '1 1 1 1 1 1 1 1 1 1 1 1 I� A P P R A I S A L R E P O R T Covering Beach Properties on Lido Isle Leased by the City of Newport Beach to The Lido Isle Community Association DATE OF VALUE: January 31, 1975 DATE OF REPORT: January 31, 1975 SUBMITTED TO: City of Newport Beach 3300 Newport Boulevard Newport Beach, California and Lido Isle Community Association 701 Via Lido Soud, Lido Isle Newport Beach, California SUBMITTED BY: Mawhinney & Associates, Inc. Real Estate Appraisers 4630 Campus Drive Newport Beach, California MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers I MAWH \NNEY & ASSOC MUM, NC. 4630 CAMPUS DRNE • SU1SE 107 • NEWPORZ 9EACH, CALIFORNIA 92660 • 7141545 -1144 ' January 31, 1975 City of Newport Beach 3300 Newport Boulevard Newport Beach, California and Lido Isle Community Association 701 Via Lido Soud, Lido Isle Newport Beach, California ' Re: Beach Properties on Lido Isle Leased by the City of Newport Beach to Lido Isle Community Association Gentlemen: Pursuant to your request and authorization, herewith is submitted the Appraisal Report covering Lots A, B, C, D, E, F, G, H, I and J and Parcels B, C and E, all in Tract 907, the subject of a Lease Agreement between the Lido Isle Community Association and the City of Newport Beach. ' The purpose of the Appraisal is to estimate the annual fair rental to be paid to the City of Newport Beach by the Lido Isle Community Association. In my opinion, the annual fair rental is in the amount of Three Thousand Seven Hundred Dollars ($3,700.). ' Following is the Report, which includes a compilation of factual data, descriptive material, pictures and analysis. ' This is to certify that the undersigned has no personal interest in the subject properties, nor have I in the ' past; and that the fee for the Appraisal is in no way contingent upon the value conclusions derived. Respectfully submitted, MAWHINNEY &nASSOCIATES, INC. 1` h/ JRM:FR ohn R. MawVhv`i! /nney, Pre ent Real Estate Appraisers 1 b0i 11 L� + 07 l4 P lit 1 b0i 11 L� P JUN 3 e d � 0 9 �F ai t J Y4�5 4: e "tf"i h� qq !i ^ .. { �. h� ? $ Id1 } y.- r' 1 MN TABLE OF CONTENTS PAGE AERIAL VIEWS OF SUBJECT PROPERTIES Frontispiece PREFACE 1 Purpose of the Appraisal 2 Definition of Fair Rental 2 Contingent & Limiting Conditions 3 -5 NEIGHBORHOOD DATA 6 Map of Lido Isle 7 General Comment 8 Development History 6 Demographic Data 9 Principal Streets 9 Utilities & Sewer 9 -10 Zoning 10 SUBJECT PROPERTIES 11 General Comment 12 Use Restrictions 12 -13 Description of Subject Properties 13 -14 Lot A Plot Plan 15 Lot A -1 Description 16 Lot A -2 Description 16 -17 Lot A -3 Description 17 Lot A -4 Description 17 -19 Lot A -5 Description 18 Lot C & Parcel C Plot Plans 19 Lot C & Parcel C Descriptions 20 Lots B & D Plot Plans 21 Lots B, D & E Descriptions 22 -23 Lots E & F Plot Plans 24 Lots F & G Descriptions 25 Lots G, H & J Plot Plans 26 Lot H Description 27 Lot J Description 28 Lot 1 & Parcel B Plot Plans 29 Lot I -1 Description 30 Lot I -2 Description 30 -31 Lot 1 -3 Description 31 Parcel B Description 32 Parcel E Plot Plan 33 Parcel E Description 34 Highest & Best Use 35 -37 Continued MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers TABLE OF CONTENTS (Cont'd.) MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers PAGE VALUATION ANALYSIS 38 Market Data Approach 39 Dry Boat Storage 39 -40 Anchorage 41 Parks & Beaches 41 -42 Offsets 42 -43 Conclusion 43 -44 ADDENDA 45 MARKET DATA 46 Dry Boat Storage Comparison 47 Dry Boat Storage &Anchorage Rates 48 Dana Point Marina 49 Dana Point Marina Parcels 50 Redondo Beach Marina 51 Marina Del Rey Marina 52 -53 Dept. of Small Craft Harbors - Los Angeles County 54 -55 QUALIFICATIONS 56 -58 MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers P R E F A C E MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers i PURPOSE OF THE APPRAISAL: P R E F A C The purpose of this Appraisal is to estimate the fair rents to be paid for the subject parcels as of January 31, 1975. DEFINITION OF The typical or normal rent that FAIR RENTAL: should be paid for a property on the basis of comparable rents currently being paid for competi- tive properties which have simi- lar adaptability and capabilities for use. MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 2 PREFACE Continued CONTINGENT The legal descriptions furnished & LIMITING us are assumed to be correct. CONDITIONS: We assume no responsibility for matters legal in character, nor do we render any opinion as to the title, which is assumed to be good. All existing liens and encumbrances have been disregard- ed, and the property is Appraised as though free and clear, under responsible ownership and'compe- tent management. The sketches in this Report are included to asist the reader in visualizing the property. We have made no survey of the prop- erty and assume no responsibility in connection with such matters. We believe to be reliable the in- formation which was furnished to us by others, but we assume no responsibility for its accuracy. Use Restrictions; In the Lido Isle Declaration of Protective Restrictions, all lots on Lido Isle were given zoning which de- fined restrictions of building, setbacks, uses, etc.. The sub- ject lettered lots were given a zoning "0 ", which was defined as follows: Lots Included: "This zone shall include Lots numbered 'A' to 'P' both inclusive, heretofore deeded to the City of Newport Beach." Uses: "No structures shall be erected in this zone except band stands, comfort stations, recrea- tional structures, or other struc- tures for the use, welfare and benefit of the community and the public, and on all such lots or MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 3 ;1 PREFACE Continued CONTINGENT building sites having Bay frontage & LIMITING the structures must be so erected ' CONDITIONS: and maintained that free access to Cont'd. the waters of the Bay and the ' Beach shall at all times be avail- able to the residents of the com- munity or the public." Setbacks: "No structures shall be erected over any easements, re- served to the City of Newport Beach in the map of record." In addition to deed restrictions which must be taken into considera- tion in the determination of values and rents of the subject proper- ties, the Appraiser has also been instructed by the Employers to take ' the following instructions into consideration: "The following are appraisal instructions agreed to by representatives of the City of Newport Beach (City) and the Lido Isle Community Association (LICA): ' 1. Property to be Appraised: a. Please refer to the attached map. ' (See Map of Lido Isle, page 7 of this Report) b. Include LotsA through J inclusive. C. Include that portion of parcel B which is seaward of Lot I (i.e. between Strada Cordoba and Via Koran). d. Include that portion of parcel C which is seaward of Lot C and seaward of Lots 20 through 25 inclusive. e. Include parcel E. f. Do not include any of the tidelands (parcel ' A), the remainder of parcel B or the remain- der of parcel C. 2. Assume that LICA will have granted easements to the general public 4 feet in width from dedicated streets to the tidelands as follows: a. Westerly 4 feet of lot A; ' b. Easterly 4 feet of lot A; C. Present path on lot D; d. To be designated on lot E; ' e. To be designated on lot G; f. Existing walk on lot H; g. Existing walk on lot J. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 0 I :1 PREFACE Continued 1 ++ ' MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 13 3. Assume the existence of existing easements as set CONTINGENT ' & LIMITING CONDITIONS: Cont'd 1 ++ ' MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 13 3. Assume the existence of existing easements as set ' forth in the opinion letter of Nossaman, Waters, Scott, Krieger & Riordan dated July 3, 1974 and any other easements you may ascertain. ' 4. Accept as valid the Declaration of Protective Re- strictions which limit the use of lots A through J for an indefinite period unless terminated ' within 6 months at 20 -year intervals. 5. Assume the zoning as advised by the City. ' 6. Do not consider the value of existing improvements since they were 'installed by LICA. 7. You are instructed to ascertain fair market value ' in accordance with standard appraisal standards. Please evaluate separately each lot described in l.b above and each parcel or portion of parcel ' described in I.e., l.d. and I.e. above." Possession of this Report, or a copy thereof, does not. carry with ' it the right- of publication, nor may it be used for any purpose by ' am✓ but the client, and then only with proper qualification. We area not required to give test- imony or to appear in court by reason of this Appraisal, with reference to the properties in question, unless arrangements ' have been previously made there - fo:. 1 ++ ' MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 13 NEIGHBORHOOD DATA MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 6 See Contract File for the Map of Lido Isle I ' NEIGHBORHOOD DATA DEVELOPMENT Most of the homes were built in GENERAL Lido Isle is an island in Newport COMMENT: Bay, accessible only by a bridge from the Newport peninsula. Part of the City of Newport Beach, it was initially developed in the ' late 1920s and early 1930s with ' the specific objective of an ex- clusive community of high quality residences, separated and apart from the areas frequented by the t general beach -going public. True to this objective, Lido Isle has become a neighborhood of very ' fine beach homes, populated by upper -class families in a quiet residential atmosphere, and with ' ready access to the bay waterfront. Lido Isle is divided into 1,094 numbered lots, plus the letter- ' designated lots which comprise the subject property owned by the City of Newport Beach, and leased to the Lido Isle Community Associa- tion. The great majority of the numbered lots are occupied with residences. The island contains ' approximately 115 acres. It has 12,000 lineal feet of shoreline. DEVELOPMENT Most of the homes were built in ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers P HISTORY: the 1940s and 1950s, with approx- imately 88% constructed before 1960. According to the 1970 cen- sus, there were 877 housing units on Lido Isle, of which 596 were ' owner occupied, 165 rented year - round, and the remainder vacant or rented for a part of the year. Of the total population of 2,229, t more than half (1,195) had been in the same house for five years or longer. So the population is ' basically stable rather than shifting or transient. ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers P NEIGHBORHOOD DATA Continued DEMOGRAPHIC DATA: In 1970 there were 1,556 adults and 673 persons under 18 years old. Approximately 40% of the adults had a four -year college education, and 88% were high school graduates. Of the 62C families receiving income, the mean income level was $25,592, without. about 70% earning over $15,000 per year, and nearly 20% with incomes in excess of $50,000 per year. Of the 896 employable persons, most were engaged in professional, tech- nical, management or administrative work, with others in sales, clerical and miscellaneous types of occupa- tions. PRINCIPAL STREETS: In physical make -up, Lido Isle has a circulating main traffic artery in Via Lido Nord and Via Lido Soud. Several main cross streets trans- verse the island, with numerous small streets, nearly all of which provide direct access to Via Lido Nord and Via Lido Soud. The major- ity of the households on the island maintain two or more cars, and it is estima' :ed that there are approxi- mately 1,500 autos. Traffic flow is generally light. Parking on the street is sometimes available, since there is very little traffic from the general pub- lic. S traffic count in late 1974 showed 7,500 cars per day entering and leaving Lido Isle via the bridge. UTILITIES All utilities and sewer are avail- & SEWER: able on the island and are supplied by the following: MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 9 I NEIGHBORHOOD DATA Continued ' UTILITIES WATER: City of Newport Beach. & SEWER: Cont'd. GAS: Southern California Gas Co. ' ELECTRICITY: Southern California Edison Co. I ,TELEPHONE: Pacific Telephone Co. SEWER: City of Newport Beach. ZONING: Lido Isle is zoned in conformity with the existing development t thereon. The vast bulk of the island is zoned for single family residential. The exception to this consists of three small segments of the island zoned for multiple fam- ily residential, one of which is located on the north side of Via ' Lido Nord between Via Koron and Via Dijon. The other two are located ' at the westerly end of the island of Via Antibes. on either side 1 1 + +4 1 If] Iu Iu ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 10 I SUBJECT PROPERTY MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 11 SUBJECT PROPERTY GENERAL The subject property consists of a COMMENT: number of separate properties on Lido Isle. The lots A through J are identified as lots designated on the original subdivision map of !Tact 907, approved by the Newport Beach City Council September 7, 1928. The parcels B, C and D (or portions thereof) refer to parcels designat- ed by the Agreement of Lease with the Lido Isle Community Association dated December 5, 1938. This property was deeded to the City of Newport Beach in 1928, when the subdivision map was filed, and has been leased throughout the in- tervening years to the Lido Isle Community Association (LICA). The leased property has been improved and maintained by LICA for the use of Lido Isle residents. From the tabulated Subject Property Summary, it is noted that the total usable area is 223,049 square feet or about 5.12 acres, which can be divided into the following categor- ies of usage: Dry boat: storage 32,688 sq.ft. Anchorage, Water Area80,032 sq.ft. Parks 43,997 sq.ft. Beach 50,903 sq.ft. Walkways 15,429 sq.ft. Total 223,049 sq.ft. USE RESTRICTIONS: In the Lido Isle Declaration of Pro- tective Restrictions, all lots on Lido Isle were given zoning, which defined restrictions of building, setbacks, uses, etc.. The subject lettered lots were given a zoning "0 ", which was defined as follows: MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 12 SUB.;ECT PROPERTY Continued USE RESTRICTIONS: Lots included Cont'd. _ "This zone snail include lots num- bered 'A' to 'P' both inclusive, heretofore deeded to the City of Newport Beach. Uses "No structures shall be erected in this zone except band stands, com- fort stations, recreational struc- tures, or other structures for the use, welfare and benefit of the community and the public, and on all such lots or building sites having Bay frontage the structures must be so erected and maintained that free access to the waters of the Bay and the Beach shall at all tames be available to the residents of the community or the public. Setbacks "No structures shall be erected over any easements, reserved to the City of Newport Beach in the map of record." DESCRIPTION OF The following paSes include a des - THE SUBJECT cription of each lot or parcel PROPERTIES: under consideration. For analysis purposes, some of the lots have been divided into sub -lot designa- tions because cf multiple uses. In any legal descriptions herein, the reference to the Subdivision Map shall mean the Subdivision Map of Tract No, 907 recorded in Book 28, Pages 25 to 30' of Miscellaneous Maps, Records of Orange County. Reference to Parcels lettered A through F, shall identify those par- cels (or portions thereof) set forth in the Agreement of Lease dated December 5, 1938 between the City of Newport Beach and the Lido Isle Community Association. MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 1 I 1 1 i I MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 14 Dry Par.E Storage Water Park Beach Walkways Total LOT A 18,000 7,200 12,258 6,129 43,587 sq.ft. sq.ft. sq.ft. sq.ft. sq.ft. B 3,911 3,911 sq.ft. sq.ft. " C 3,600 3,600 sq.ft. sq.ft. Par.0 4,800 5,334 10,134 sq.ft. sq.ft. sq.ft. Lot D 4,085 4,085 sq.ft. sq.ft. " E 3,600 3,600 sq.ft. esq. ft. " F 3,600 3,600 sq.ft. sq.ft. " G 3,600 3,600 sq.ft. sq.ft. " H 3,600 3,600 sq.ft. sq.ft. 1 22,200 9,300 31,500 sq.ft. sq.ft. sq.ft. Par.B 66,000 66,000 sq.ft. sq.ft. Lot J 5,400 5,400 sq.ft. sq.ft. Par.E 14,688 9,232 16,512 40,432 sq.ft. sq.ft. sq.ft. sq.ft. 32,688 80,032 43,997 50,903 15,429 223,049 sq.ft. sq.ft. sq.ft. sq.ft. sq.ft. sq.ft. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 14 See Contract File for Map of Lot "A" LOT A Lot A of the Subdivision Map is tions, or sub -lots, as shown on Each portion of Lot A is descri LOT A -1 LOCATION: Between Via West of Via comprised of several sec - the accompanying diagram. Ded separately as follows: Lido Soud and the beachfront, Genoa. LEGAL: Portion of Lot A of Subdivision Map. SIZE & SHAPE: 40' x 90' = 3,600 sq.ft. - rectangular. FRONTAGE & ACCESS: Fronts on Via Lido Soud. Provides access to beach. A 4' easement is to provide public access across the property to the beach. UTILITIES: A 4' easement for utilities & storm drain runs along street and extends down the center of the property. ZONING: "0 '. PRESENT USE: Park area for use of Lido Isle residents. IMPROVEMENTS: Low facing of Palos Verde stone along street. Cement walkway leads to beach area. Landscaping includes grass, shrubs and several trees. LOT A -2 LOCATION: Between Via Lido Soud and the beach, opposite Via Genoa. LEGAL: Portion of Lot A of Subdivision Map. SIZE & SHAPE: 90' x 1.00' = 9,000 sq.ft. - rectangular. FRONTAGE & ACCESS: Fronts on Via Lido Soud, easily access- ible. UTILITIES: A 4' easement for storm drains and util- ities runs along street and extends down the center of the property. ZONING: "0 ". PRESENT USE: Dry Boat Storage. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 16 LOT A -2 Continued IMPROVEMENTS: Black Verde Rough stand small -top over area. Some small Palos stone planters. Palm trees. wood pigeon hold lockers. Wooden for upper level storage of a few dinghies. LOT A -4 LOCATION: Between. Via Lido Soud and the beach. Opposite Via Koron. LEGAL: Portion of Lot A of Subdivision Map. SIZE & SHAPE: 40' x 90' = 3,600 sq.ft. - rectangular. FRONTAGE & ACCESS: Fronts on Via Lido Soud. Provides access to beach. A 4' easement is to provide public access across the property to the beach. UTILITIES: A 4' easement for storm drains and util- ities runs along street and extends down the center of the property. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 17 LOT A -3 LOCATION: Between Via Lido Soud and the beach. Slightly East of Via Genos. LEGAL: Portion of Lot A of Subdivision Map. SIZE & SHAPE: 90' x .100' = 9,000 sq.ft.- rectangulat. FRONTAGE & ACCESS: Fronts on Via Lido Soud. Easily access- ible. UTILITIES: A 4' easement for storm drains and util - ities runs along street and extends down the center of the property. ZONING: "0". PRESENT USE: Dry Boat Storage. IMPROVEMENTS: Black -top over area. Small. Palos Verde stone planters. Palm trees. Pier & float. LOT A -4 LOCATION: Between. Via Lido Soud and the beach. Opposite Via Koron. LEGAL: Portion of Lot A of Subdivision Map. SIZE & SHAPE: 40' x 90' = 3,600 sq.ft. - rectangular. FRONTAGE & ACCESS: Fronts on Via Lido Soud. Provides access to beach. A 4' easement is to provide public access across the property to the beach. UTILITIES: A 4' easement for storm drains and util- ities runs along street and extends down the center of the property. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 17 LOT A -4 Continued ZONING: PRESENT USE: IMPROVEMENTS: LOCATION: LEGAL: SIZE & SHAPE: FRONTAGE & ACCESS UTILITIES: ZONING: PRESENT USE: IMPROVEMENTS: 0 Park area for use of Lido Isle residents. A low Palos Verde stone abuttment and wall marker faces the street, and a cement walkway leads to the beach. Land- scaping includes grass, shrubs and a number of trees. Along beach front, South side of Lido Isle, from Lots A -1 to A -4. Portion of Lot A of Subdivision Map. 15' wide strip of walkway and beach- front 1,2213.77' long. 6,128 sq.ft. walkway 12,258 sq.ft. beachfront sand 18,386 sq.ft. 1,225.77 feet of beachfront. Accessible from Via Lido Soud through Lots A -1 or A -4. None. 11011 Beach walkways and access to waterfront.. Cement walkway the entire length of strip. Palm trees along walkway. Street lights. MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 18 �r.s i r- 0 n 0 0 a D 0 m r n LOT C LOCATION: Between Via Lido Soud and beachfront, opposite Via Sam Remo. LEGAL: Lot C of Subdivision Map. SIZE & SHAPE: 40' x 90' = 3,600 sq.ft.- rectangular. FRONTAGE & ACCESS: Fronts on Via Lido Soud, runs through to beachfront (represented by adjoin- ing Parcel C). UTILITIES: A 4' easement for utilities and storm drains runs along street and extends down the center of the property. ZONING: "0 ". PRESENT USE: Park area for use of Lido Isle residents. IMPROVEMENTS: Low facing of Palos Verde stone along street. Cement walkway from street to beachfront area. Flagpole and small railing. Some cement decking. Pier and float, extending out over Parcel B area into water. Landscaping, includ- ing grass, shrubs and trees. nAOrnr. r LOCATION: Along the beach, adjoining Lot C, south side of Lido Isle. LEGAL: That portion of Parcel C which is sea- ward of Lot. C and seaward of Lots 20 through 25 inclusive. SIZE & SHAPE: Approximately 10,134 sq.ft. - irregular. (Portion usable for boat moorings approximately 4,800 sq.ft.). FRONTAGE & ACCESS: Fronts across Lot C and Lots 20 through 25. Accessible through Lot C. UTILITIES: None. ZONING: Not applicable. PRESENT USE: Beach entry. Large portion of area is in the water, supporting float from pier extending from Lot C. Usable as boat moorings. IMPROVEMENTS: Pier and float from Lot C. Cement decking borders front of Lido Isle Yacht Club, LICA. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 20 a o � 0 v Z N n 0 n � � N � � O 1 - .67' N v �? y VIII 102.62 or co 6n N A_ to to y 0 r 0 v MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 22 LOT B LOCATION: Between Via Lido Soud and beachfront, opposite Via Orvieto. LEGAL: Lot B of Subdivision Map. SIZE & SHAPE: 40' wide x 97.79' = 3,911 sq.ft., Trapezoidal. FRONTAGE & ACCESS: Fronts on Via Lido Soud, runs through to beachfront. UTILITIES: A 4' easement for storm drains and utilities runs along street and ex- tends down the center of the property. ZONING: "O". PRESENT USE: Park area for use of Lido Isle residents. IMPROVEMENTS: Palos Verde stone abutment facing street. Some small shrubs and trees. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 22 I ' LOCATION: 1 LEGAL: SIZE & SHAPE: LOT D Between Via Lido Soud and beachfront, opposite Via Waziers. Lot D of Subdivision Map. 40' wide x 102.14 = 4,085 sq.ft., approximately rectangular. FRONTAGE & ACCESS: Fronts on Via Lido Soud, runs through to beachfront.. A 4' easement is to provide public access across the property to the beach. ' UTILITIES: ' ZONING: PRESENT USE: A 4' easement for utilities and storm drains runs along street and extends down the center of the property. M Park area for use of Lido Isle residents. 23 IMPROVEMENTS: Low facing of Palos Verde stone. Cement walkway leads to beachfront. Landscap- ' ing with shrubs and trees. LOT E LOCATION Between Via Lido Nord and beachfront. ' Slightly East of Via Zurich. LEGAL: Lot E of Subdivision Map. ' SIZE & SHAPE: 40' x 90' = 3,600 sq.ft. - rectangular. FRONTAGE & ACCESS: Fronts on 'Via Lido Nord, runs through ' to beachfront. A 4' easement is to provide public access across the prop- , erty to the beach. ' UTILITIES: A 4' easement for utilities and storm drains runs along street and extends ' down the center of the property. ZONING: "0 ". ' PRESENT USE: Beach park area for Lido Isle residents. IMPROVEMENTS: Low facing of Palos Verde stone along street. Cement walkway leads to beach- ' front. Beach sand. Some shrubs and one good sized tree. ' MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 23 i 1 _ y u o N O A �s C ^o v�= �e 3 3 0 z O m 5 � 3 II n o� C r LOT F LOCATION: Between Via Lido Nord and beachfront, opposite Via Waziers. LEGAL: Lot F of Subdivision Map. SIZE & SHAPE: 40' x 90' = 3,600 sq.ft.- rectangular. FRONTAGE & ACCESS: Fronts on Via Lido Nord, runs through to beachfront. UTILITIES: A 4' easement for utilities and storm drains runs along street and extends down the center of the property. ZONING: 110 ". PRESENT USE: Beach park for Lido Isle residents. IMPROVEMENTS: Low facing of Palos Verde stone along street. Cement walkway leads to beach. Beach sand, and a park bench. Some shrubbery. Pier and float extends out into water. LOT G LOCATION: Between Via Lido Nord and beachfront, opposite Via San Remo. LEGAL: Lot G of Subdivision Map. SIZE & SHAPE: 40' x 90' = 3,600 sq.ft. - rectangular. FRONTAGE & ACCESS: Fronts on 'Via Lido Nord, runs through to beachfront. A 4' easement is to provide public access across the property to the beach. UTILITIES: A 4' easement for utilities and storm drains runs along street and extends down the center of the property. ZONING: "0 ". PRESENT USE: Beach park for Lido Isle residents. IMPROVEMENTS: Low facing of Palos Verde stone along street. Some small brick planters. Landscaped with grass, shrubs and several trees. Cement walkway leads to beachfront. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 25 i m ' O 1 A O A O_ g -- m is v s �o O 0 a 0 0 N O 0 a VIAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 27 LOT H LOCATION: Between Via Lido Nord and beachfront, opposite Via Orvieto. LEGAL: Lot H of Sibdivision Map. SIZE & SHAPE: 40' x 90' == 3,600 sq.ft. - trctangular. FRONTAGE & ACCESS: Fronts on Via Lido Nord, runs through to beachfront. A 4' easement is to provide public access across the prop- erty to the beach. UTILITIES: A 4' easement for utilities and storm drains runs along street and extends down the center of the property. ZONING: "011. PRESENT USE: Park area for use of Lido Isle residents. IMPROVEMENTS: Marker of Palso Verde stone. Cement walkway leads to beachfront. Pier and float extending out into water. Land- scaped with grsss, shrubs & small trees. VIAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 27 MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 2g LOT J LOCATION: Between Via Lido Nord and beachfront, opposite Via Antibes. LEGAL: Lot J of Subdivision Map. SIZE & SHAPE: 60' x 90' _= 5,400 sq.ft.- rectangular. FRONTAGE & ACCESS: Fronts on Via Lido Nord, runs through to beachfront. A 4' easement is to provide pu'olic access across the prop- erty to the beach. UTILITIES: A 4' easement for utilities and storm drains runs along street and extends down the cRnter of the property. ZONING: "O". PRESENT USE: Park area for use of Lido Isle residents IMPROVEMENTS: Low facing and planters of Palos Verde stone. Cement walkway leads to beach- front. Pier and Float extends into water. Landscaping with some grass, shrubs and small trees. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 2g See Contract File for Map of Lot "I" and Parcel "B" i Iu .1 I I 1 1 LOT :I LOT I is separated for analysis purpcses into sub -lots. LOT I -1 LOCAT.IC'N: Between Via Lido Nord and beachfront, opposite 'Zia Genoa. LEGAL: Portion of Lot. T of Subdivision Map. SIZE & SIIAPI:: 100' x 90" 9,000 sq.ft. - rectangular. FRONTAGE & ?,CCESS: Fronts on Vii: Lido Nord, runs through to beachfront. UTILITIES: A 4' easement for utilities and storm drains runs along street and extends down the center of the property. ZONING: 110.�. PRESENT USE: Playground': area for small children of Lido Isle residents. IMPROVEMENTS: Low far.inq of Palos Verde stone. Cem- ent walkway leads to beachfront. Pier and float extend into water. Beach sand, and Playground equipment. Some grass, shrubs, one large tree and sev- eral small trees_ LOT I -2 LOCATION: Between Via Lido Nord and beachfront. Four walkways opposite Via Koren, Via Ithaca, Via Eboli and Strada Cordova. LEGAL: Portion of Lot I of Subdivision Map. SIZE & SHAPE: Four walkways each 90' long. Two are 10' wide; two are 5' wide. Total of 2,700 sq.ft. FRONTAGE & ACCESS: Frontage on Via Lido Nord. Provide access to :Oeachfront. UTILITIES: A 4' easement for utilities runs across the walkways next to the street. ZONING: 11011, MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 30 1I LOT I -2 Continued PRESENT USE: Access walkways leading to the beach- front walkway of Lot I. IMPROVEMENT": Cement walkways leading to beachfront. Landscaping with brick planters and shrubs. LOCATION: Along the beachfront on the North side of Lido Isle, between Via Koron and Strada Cordova. LEGAL: Portion of Lot I of Subdivision Map. SIZE & SHAPE: Strip along the beach 15' x 1320': 5'x1320' = 6,600 sq.ft. walkway 10'x1320' = 13,200 sq.ft. beach frontage Total 19,800 sq.ft. FRONTAGE & ACCESS: Beach frontage across all lots between Strada Cordova and Via Koron. Access is by means of the walkways of Lot 22. UTILITIES: None. ZONING: "O". PRESENT USE: Beach walkway and access to waterfront. Bathing beach. IMPROVEMENTS: Cement walkway along beachfront. Beach sand. A pier and float extends into water from the I2 walkway opposite Strada Cordova. (Another pier and float are installed opposite Lot I -1 playground.) MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 31 II I ' PARCEL B LOCATION: Water area long beach front on North side of Lido Isle, adjoining Lot I. LEGAL: Portion of Parcel B, as identified in Lease Agreement of December 5, 1938, which is seaward of Lot I (between ' + Strada Cordova and Via Koron). SIZE & SHAPE: Water area 50' x 1320' = 66,000 sq.ft. FRONTAGE & ACCESS: Fronts on beach. Access through Lot I from Via Lido Nord. ZONING: Not applicable. PRESENT USE: 30 small boat moorings. Piers and ' floats of Lot I extend into the water covered by this parcel. ' IMPROVEMENTS: None. (Except for the 2 piers and floats attached to Lot I). Also some small mooring buoys are anchored off- shore opposite some of the residential properties. 11 .1 .1 11 MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 32 l It] PARCEL E LOCATOON: Near bridge leading to Lido Isle. ' LEGAL: Parcel E as identified in Lease Agreement of December 5, 1938. SIZE & SHAPE: Irregular shaped parcel, generally trapezoidal, with approximately 40,432 sq.ft. gross area. This may ' be separated into the following areas: 14,688 sq.ft. usable as dry boat storage 9,232 sq.ft. usable for boat slips 16,512 sq.ft. banks and abutments 40,432 sq.ft. J I MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 34 FRONTAGE & ACCESS: The property adjoins the bridge road of ' Via Lido, and access is down the bank from this road. Boats stored in this area must be brought by water, as they ' cannot be transported down the bank. UTILITIES: Electricity, water and sewer are all available to this property. ' ZONING: Not applicable. ' PRESENT USE: Dry boat storage, and boat slips. IMPROVEMENTS: Concrete abutments have been sunk in the water to provide a secure level boat storage area. Hoist facilities with crane, and electric winch are pro- vided. Boat slips and floats are in ' place for 11 slips of 26' and 5 slips of 36'. Also 109' of side -tie space is available. ' A small comfort station constructed of concrete block is located adjacent to ' the dry beat storage. J I MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 34 I 1 1 1 1 1 SUBJECT PROPERTY Continued HIGHEST & General Comment: Before coming to con - BEST USE: clusions about the highest and best use, there are a number of very special considerations that must be first taken into account. Each of these matters in some degree inhibits the value of some or all of the subject parcels. The special matters which must be taken into consideration are these: 1. The Declaration of Protective Re- strictions limiting the use of Lots A through J, and which reads as follows: "No structures shall be erected in this zone except band stands, comfort sta- tions, recreational structures, or other structures for the use, welfare and benefit of the community and the public, and on all such lots or building sites having Bay frontage the structures must be so erected and maintained that free access to the waters of the Bay and the Beach shall at all times be available to the residents of the community or the public." 2. The assumption that the Lido Isle Community Association will grant easements to the general public 4' in width from dedicated streets to the tideland, as follows: a. Westerly 4' of Lot A. b. Easterly 4' of Lot A. C. Present path on Lot D. d. To be designated on Lot E. e. To be designated on Lot G. f. Existing walk on Lot H. g. Existing walk on Lot J. 3. The City of Newport Beach harbor policy limits the use of that par- cel known as Parcel B, a water area 50' x 1320', lying on the north side of Lido Isle between the extension of Via MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 35 f ' SUBJECT PROPERTY Continued MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 36 HIGHEST & Koron and Via Dijon. The City policy BEST USE: prohibits the construction or mainten- Cont'd. ance of boat slips and piers in the ' water area and limits such activities to merely mooring boats at 40' inter- vals (Section 23, Municipal Code). ' In addition to the foregoing legal restrictions and assumptions, there is also the matter of limitation of use imposed by the fact that several ' of the parcels have been improved for park use. Portions of Lots A, C, D, G, H, J and Parcel E have been ex- ' tensively improved with landscaping, rock planters, sprinkler systems, etc In addition, portions of Lot A and I have been improved with public walks. It should also be pointed out that 9,000 sq.ft. of Parcel I have been improved with children's play equip- ' ment and has been set aside for a play park use. Such a large capital improvement having been made, it is unlikely that the parcels indicated above will be soon used for anything other than the park purposes for which they were intended. Altogether, approximately 1.5 acres of the leased area has been improved and set aside for park purposes or public walkways. This constitutes less than 1.5% of the land area com- prising Lido Isle. In view of the number of housing units and the total population of the Island, the 1.5 acres of park use is inadequate by ' every modern standard. Therefore, it might be concluded from a review of ' the total acreage on Lido Isle de- voted to park use, both private and public, that the demand created by nearly a thousand housing units is ' so great on the available park space that the "general public" is for all practical purposes limited to the f ' population of Lido Isle. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 36 SUBJECT PROPERTY Continued HIGHEST & Dry Storage: At the present time, por- BEST USE: tions of Lot A and Parcel Cont'd. E are being utilized for dry boat stor- age. The total area involved is 32,688 square feet. For purposes of valuation it might be argued that all of the dry land areas on each of the parcels is physically suitable as well as avail- able for dry boat storage use. Such an assumption provides the basis for a ' comparison of land rents of other dry storage areas in marinas up and down the Southern California coast. ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 37 Anchorage Use: A portion of Parcel C and Parcel E as well as all of Parcel B are water areas to be ' leased. These areas comprise a total of 60,032 square feet. All but 9,232 sq.ft. in Parcel E are subject to a policy restriction which limits the use of the water areas to buoy moorings. Such restrictions have an overwhelming impact upon the income production po- tential of such a water parcel. As an example, at the prevailing rates of $2.50 per lineal foot per month for the rental of boat slips, the water area on ' Parcel E is capable of generating $1.51 per sq.ft. per year of growth income. Contrasted with this, the 66,000 sq.ft. ' of water area comprising Parcel B is limited at prevailing rates of $80.00 ' per year per mooring to a gross income equivalent to 3.64 per sq.ft. per year. In other words, the unrestricted water area is capable of producing 42 times as much income per year as Parcel B ' under the harbor policy restrictions. ' Conclusion:, It. h,':s been concluded that all but those areas devoted to public walkways (15,429 sq. ft.) is available and adaptable for dry boat; storage or water anchorage, subject to the restrictions imposed by zoning ordinances, deed restrictions ' and governmental policies. ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 37 1 I 1 t 1 I , VALUATION ANALYSIS MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers m 11 u VALUATION ANALYSIS MARKET DATA The property being Appraised falls APPROACH: into four broad use categories; 1. Dry Boat Storage 2. Anchorage (water). 3. Park areas. 4. Beach areas. A fifth minor category of use is the 15,429 square feet of area de- voted to public walks. In view of the permanent nature of the improvements, and the public use, the value of the underlying fee has been considered nominal and the rents to be allocated for this use at zero. In order to evaluate property us- able for dry boat storage and an- chorage, a survey of local marinas for the purpose of investigating lease provisions at each of them was undertaken. In particular, Marina Del Rey, Redondo, and Dana Point were examined in some detail. In addition, .included in the Re- port is a summary of data accumu- lated concerning other marinas in Southern California. In general, these marinas lease property to private operators for relatively long terms (30 -66 yrs.) with a minimum rental rate speci- fied and a percentage rental based upon gross sales. Usually, the minimum rental rate will apply during the early years of the mar- ina development, and the percent- age rental rates come into play as the marina matures. DRY BOAT STORAGE Dry boat storage facilities on the (32,688 sq.ft.): various subject parcels make pro- vision for storage of a variety of small boats and dinghies as well as mast storage. MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 39 P ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 40 VALUATION ANALYSIS Continued DRY BOAT STORAGE The survey of dry boat storage at (32,688 sq.ft.): other Southern California marinas Cont'd. reveals that the competitive mini- mum rental ranges from 4fi to 6.5� per sq.ft.. The bulk of the space ' rented today is at the rate of 6� per sq.ft.. This is the figure which will be adopted as the mini- mum for purpose of this Appraisal. It was also found from the invest - 1 igation that percentage rates range from 10`? to 25 %. For pur- pose of this Appraisal the upper ' end of the rate, 25 %, is adopted. If one were to assume competitive ' rates for the dry storage facili- ties on the subject property, and to that gross income figure apply a percentage rental of 25 %, then a fair rental could be imputed to that portion of the subject prop- erty devoted to dry boat storage by direct comparison. Such an ap- ' proach eliminates the necessity for establishing a value for the property and then applying an arb- itrary interest or capitalization rate in order to determine the fair rent. ' Following is a summary of the sources of income of the dry stor- age areas based upon competitive rates. Gross Annual Dry Storage Spaces Rate Income ' Mast storage 52 @ $5 /yr $ 260 Upper dinghy 10 @ $18 1yr 180 Lower dinghy 84 @ $24 /yr 2,016 ' Small boat 1.53 @ $84 /yr 12,852 $15,308 ' Rent .. 25% s $15,308 = $3,827. ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 40 PARKS At the present time, a substantial (43,997 sq.ft.) portion of the subject property is BEACHES improved with extensive landscap- ' (50,903 sq.ft.): ing, stone planters and irrigation systems. As a practical matter, i ' MAWHINNEY & ASSOCIATES, INC. J Real Estate Appraisers coo VALUATION ANALYSIS Continued ' • ANCHORAGE The previously mentioned survey of (80,032 sq.ft.): Southern California marinas also ' provided data as to the actual rents both minimum and percentage being paid by operators and users of nearby competitive facilities. Minimum rentals range from 8fi to 12C per sq.ft. per year. Percent- ' age rates are from 15% to 30 %. The great bulk of the leases currently call for a percentage rate of 25%. For purposes of this Appraisal, a minimum rent of 12C per sq.ft. per year has been adopted and a per- centage rate of the gross income , of 25 %. ' Income on the subject parcels de- voted to water storage, i.e., an- chorage, is generated by 16 slips, 109 lineal feet of side ties and 47 shore moorings. Application of competitive rates to the subject property facilities indicates a reasonably expected gross income ' against which the 25% percentage • rate may be applied. ' Following is a summary of the est- imated gross income from the sub- ject property facilities in the ' water. areas. Slips 26 LF. 11 @ $2.50 /LF /mo. = $8,580 36 LF. 5 @ $2.50 /LF /mo. = 5,400 $13,980 Side Ties 109 LF. @ $1.50 /LF /mo. _ $ 1,962 ' Shore Moorings 47 @ $60 /yr = $ 2,820 $18,762 Rent - 25% x $18,762 = $4,691. PARKS At the present time, a substantial (43,997 sq.ft.) portion of the subject property is BEACHES improved with extensive landscap- ' (50,903 sq.ft.): ing, stone planters and irrigation systems. As a practical matter, i ' MAWHINNEY & ASSOCIATES, INC. J Real Estate Appraisers coo ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 42 VALUATION ANALYSIS Continued PARKS the planted areas are in reality (43,997 sq.ft.) mini - parks, available for the ' BEACHES enjoyment of the public. How - (50,903 sq.ft.) ever, for purposes of valuation, Cont'd. i.e., determination of the fair ' rental, it has been assumed that those areas devoted to parks and beaches are available and adapt- , able (whether there is an immed- iate demand or not) for dry boat storage. In view of the fact that they are not presently be- t ing used for that purpose, it is not feasible to project an in- ' come against which a percentage rental can be applied. On the other hand, it is feasible to apply the 6C per sq.ft. per year ' minimum rental found in the com- petitive market. Following is a computation of ' the fair rentals to be applied to park and beach areas. Parks 43,997 sq.ft. @ 6C /sq.ft. = $2,640 /year Beaches ' 50,903 sq.ft. @ 6fi /sq.ft. = 3,054 /year Total $5,694 /year ' OFFSETS: One important consideration is the fact that the Lido Isle Com- munity Association provides free of charge to the City of Newport Beach gardening services. ' Inqui.ry with the City Department of Parks reveals that the salary range (including fringe benefits) ' for gardening personnel is from $10,500 per year to $14,000 per year. Therefore, for purposes of ' this Appraisal, a portion of the fair rental value will be offset by an. amount equal to the minimum ' salary of $10,500. ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 42 I ' VALUATION ANALYSIS Continued OFFSETS: Such offset may be justified if the ' Cont'd. alternative is kept in mind, namely that: the City will have to provide the necessary personnel for garden- ' ing and beach maintenance. These two functions should more than oc- cupy the services of one man. There are other services and im- provements which have been rendered by LICA which should, it might be argued,_ also be taken into consid- eration as offsets. All of the landscaping, stone planters, and ' irrigation systems have been in- stalled at the expense of the Asso- ciation. It should also be pointed out that 3 lifeguards, at an estim- ' ated cost of approximately $4,900 per year, are supplied by the Asso- ciation during the summer months. Amortization of improvements and reimbursement for salaries of life - guards as well as amortization of ' marina structures such as docks, Piers, etc. have not been used as an offset in this Appraisal, on ' the assumption that each of these goods and services was for the ex- clusive use of members of the Association. The offset of the parks and beach - cs maintenance man is considered ' reasonable because the City would have to lay out at least that much in salary to provide the ordinary ' services for the 2200 plus resi- dents of Lido Isle. ' CONCLUSION: It has been concluded that the fair :rent to be paid for the 5.12 acres contained within the parcels previously described is $3,700 per year. Following is a summary breakdown of the calculations: ' ' MAWHINNEY & ASSOCIATES, INC. Rea! Estate Appraisers 43 1 1 1 1 1 I i VALUATION ANALYSIS Continued CONCLUSION: Dry boat storage $3,827 Cont'd. Anchorage 4,691 Park areas 2,640 Beach areas 3,054 $14,212 Less: Park /Beach Maintenance offset 10,500 Fair rental $3,712 Rounded $3,700 MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 44 I ,, .1 .1 ' A D D E N D A 11 i 1 11 ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 45 P I 11 S CJ MARKET DATA I ' I j' MAWHINNEY & ASSOCIATES. INC. I Real Estate Appraisers M. I 11 I MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 47 UI N ,a r7 a m c v\ p r) O N E O 'p H W 't$ O O O 'H U] l0 tC C, C Url H N N O 00 N U O z i G ro \n in C. N D 1r m w u v o .'� 'D U U N - . r . o \o to M M M N u l G q O O +h O L N Ln Ln �- O IT ri H .. ro m m z VT N d' UT O (N {l U O N M W �I a i4 t H C' r O 1 O da -ru J N da to O O M O N C A NM O Crl O U •ri m�� , O IJ d) O ro C) iS ro `vi r7 H O V} O m C r tf1 N N O 11 x a VT to n N K O 0 O N d' O U) �rl U) V} I 1 I � Ln N O C) O C' ro o U - - '•i 4-1 '0 0 m U) rn (D c ❑ a s-1 N .-a o O m ,c -P 'f4 r M U7 .1 l) M - ro I m x O a) :1 O rn O m O m p m 4^ ^ u in Ln Ln �n +. c +i w M U' L1 N .7.' O 01 0 O MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 47 UI N ,a r7 a m c v\ O N E O N 4� 't$ O O O O +J C Url H N N O 00 N U O z i G ro \n in C. N -4 ,S 1r m w u v o .'� 'D U U N - . r . o \o to . ri ri M N u l G q O O c O L N Ln Ln .. N IT ri H .. ro m m z VT N d' UT In (N �I a i4 t H C' r O ,C U) 1) ' 0 ..� -ru J N da to O O l0 O N r-1 Q m U' H Ln \D U •ri m�� , O r O G N ri —1 ri O \9 V} 0 m a 00 O a N C-) CD O m U) rn (D c o u in 'f4 r M U7 .1 l) M - 14 O N is H r \o m p m 4^ ^ u in Ln Ln �n +. c +i w M U' L1 N .7.' O 01 0 O .--7 4j m \n H OI '� Q a) W yr rH vt rn ID v> I'D v-k MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 47 UI N ,a r7 a m c E N 4� Kc +J U f-- O >, o -4 ,S rn o 0 0 pj ro a) C O m LI trt ro 114 N O O {} i} O L V1 G a' E C' m O 1.{ a' Q- m 7 C 0 0 W N O In (N i4 t H C' r O ,C U) 1) ' 0 ..� -ru J N da to O O l0 O N r-1 Q m U' H Ln \D U •ri m�� , ro :n r O N ri —1 ri O \9 V} lc� x Ca J U m t4 U7 14 4^ ^ 3 +i w 4j CL r-1 a) 07 U) 1J U1 ll m M w C4 LI U1 a1 O — -1 t5'v a) N UI .H +1 Q) w q 42 sa a In a xw+JW a s � t7) c sj m o o 0,44 o a) m 'O m U7 0 O ir'.i 44 ' U) H • H E: 1.1 0 4 (n G4 O m 1-) a) -P (n a) v a) Utr mo c G r4 ati4 0, s4 o C) U) 01 y�O 7 +J '1 4 O O H N a7 In a a; .v a +J a ID a N'0 a ro m 1; 1J N w a b m a N a a a A LOJ +1 me uro rn O cc xo a; Z31 rn 0) a4 �4�4 ao ro Q v m ro m m m o QQ U1 a. oW .'f'. U) d- S4 dP W S4 w .0 (Y O O O O U H H X >1 ri 'H H S4 ri aJ ,--i -u 4J 4J p p o�4 s4 m m m a) ro m m U) U) cn UI U Us+ Qavi 7� c a :+ a ai i4 S4 >1 v i 71 71 1 1 +1 ro ro G, +1 G a G C S4 C N U ro wa < c a a < <m aQ Q Q a MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 47 UI N ,a r7 a m c 1 1 1 i 1 i i i 1 i i �1 1 ' ii >, In > 4 CD o O- o ern vn W o C 0 a o 0 ro V1 O to O r N 0 a co � w >1 ro N M M N r N N y.1 do do a do oW aW CP oW do do do q do I O Ln '-I aW O O N r O a u 0 I-I N 1 U'1 a N N N N rH N H fA O V1 O O N O Ln N O N N ul N tf1 r m O r Ln N N N r r !J N rt7 N N rl N N r-I rl ri N rl ri ri CT �i ro 0 U C ow dP ry' do do CP O O O O N N N do da N oW do M N do do I I do o r I O o I I O tll o u'1 N N [t l N M N O N ri N H Ln Ln b N N O U Ri U7 O 0 w w w ro m w w a O n I a a 1a 1-I vl O O \ N I v} \ \ I 0 fd N O 'T l/T I O O O 4J O I ul O O O O Ln th r1 . yr rl ri '-1 1 iJ >, In > 4 +4 >, ro W C � a o 0 ro (� N a U � � >1 ro H do C U y.1 do do O I do oW aW CP oW do do do q do I O Ln '-I aW O O N r O a u 0 I-I N 1 U'1 a N N N N rH N H O (d L(1 N 'H 4 Tf C >, In > 4 +4 >, ro o4 C a o 0 ro (� N a U � � 4j ro H o U � ro Q) l4 Cl 0 0 4J C o a m ro a u 0 C G a ro 0 c < c H O (d Q4 'H 4 Tf C 3 > V1 z C4 H 0 Z a MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers !-- In +4 ro C o 0 ro (� N N � O H U � ro Q) l4 Cl D d C C N C 4j tr o ro a v > a MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers !-- i 1 ' MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 49 DANA POINT Dana Point Marina is a relatively new development, and consequently is not operating at full capacity. Various par- cels of the marina have been leased on 30 -year leases, with , terms subject to adjustment after the tenth year. The at- tached tabulation summarizes information on the four major parcels. Parcel 3 is the parcel primarily devoted to Dry ' Boat Storage. Parcel 3 is a 2.558 acre (111,426 sq.ft.) parcel with usages of Dry Boat Storage, Boat Rental, Boat Sales, Car Park- ' ing, Ice, Sundries, Vending Machines, etc.. Lessee is Dana Point Marina Co.. Lessor is Orange County. The lease was initiated in 1971, and is currently in its fourth year. ' The minimum rental rate is currently $400 per month, scheduled to increase up to $1,100 per month after the fifth year. This is equivalent to 4.3C per sq. ft. per year, cur- rently, with the increase to 1.1.80 at maturity beyond the t fifth year. The percentage rental rate is based on 5% of the gross receipts from Dry Boat Storage until after the fifth year, ' when it increases to 10 %. However, the Orange County policy on new leases now is to base the percentage rental rate on 25% of the gross for Dry Storage. ' The lessee's gross receipts from boat storage (and in- cluding some vending sales) were $30,294 for the fiscal year 1974, up from $28,754 in 1973. This is equivalent to 27C ' per sq. ft. per year, and with the current 5% percentage would yield only 1.350 per sq. ft. per year percentage rental. Therefore, the minimum rental rage governs at the present time. Of course, since the marina is in a developmental stage, the area is currently operating much below the ultim- ate potential for the land available. ' The lessee has a requirement to provide at least $60,000 worth of improvements to Parcel 3, and $250,000 for Parcel 4. In fact, the lessee has spent in excess of these amounts, to ' the extent of $408,623 for both parcels. Information from Daryl Faulkner ' (714) 834 -4794 Orange Co. Dept of Beaches and Parks t 1901 Bayside Dr. Newport Beach. i 1 ' MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 49 i 1 I 1 1 I ' I ' U) a �a V a LL z H a E+ z H W z q ri v U C 4 ro a ri v U ro 0.i r-1 Q) 4� ro a r-� Q) U N ro D4 U) QI 4 U ro r M N ri u] Q) 4 U ro co Ln Ln QJ V) ro Q) X a N U O N Q Q) Ln a z ra ro # I 4 Q4 4 Ql Q) iJ I N 4 G U 4 Q) O .0 w QJ Q) 1J O oW a 4 ,C w o U) o .c (d U-J H t6 N U) N Lr. -u ro + [ r H G Ln 3 .G OOOO o O\ JJ ro O \O 000 O O o f \D M In U o Ln Ln Ln Ln o . \ 1 4 E 0 , . , ,. 0 r-i N 1-I ro Ln N O N (N % (n N" U) Q) Ln 0 0 r4 r-I N N N O 00 1 1 4 ri ri r4 N V}(? M VT M 0 0 0 0 0 0 OJ 1J 00 O O O Ln O Ln O O U7 Q) Q) ao G `in d! 4 O y( IaT N S4 Q) U7 11 Lr) Ln i N C.) N 4J as U) ao ,G G U Q) E+ (d N H ro G v} ro+ yJ i 0 0 ro o N 3 4j � 0 \00000 0 M u7 U 0 0 0 O O o 4 (o der I 4 00000. o \ lJ ro o \o o\o o \o L1 co I M M U) Q) Ln 00 r-M rl rl -4N m N `-' r-I >� O N V)- N M M M a' V} 4 U) QI 4 U ro r M N ri u] Q) 4 U ro co Ln Ln QJ V) ro Q) X a N U O N Q Q) Ln a z ra ro # I 4 Q4 4 Ql Q) iJ o\o .0 w O a E+ (d ri Lr. -u H G o ro O o f 4J tr E o in \ \ 1 1 4 M 0 0 0 0 0 0 OJ 1J O O Ln O Ln O O U7 Q) Q) ao M M Ln Ln LO Ln N N N y( Lfl U7 V} Lr) Ln G yJ i 4 (o M I dA U O o U 4 N 4 Q \ ao d co QJ 4J ao ao r-I O do {~ 0 F w O O I r1 0 ao ow ,r V' H ro •-1 N r4 I N U) Ln +J 1J V). C T O Q) O + ro E o u 4 j + o I 4 � 0 0 0 0 0 0 0 N .y.) (d cko O op 0 .0 0 O dA \D 000 00 G O UI QJ Ln m N ri O N u� to Ln V? N M d' r♦ 'f'L ID r-� >+ 4 ri •v PQ v < 4 x +J ro v Q) U) ro +J 4 0 yJ rn U v v O Q) O = G ro tT 'H G >+ _ _ _ r-1 4J U v 4 G trL > (n .r1 1 w a O .ri G N 4 J C +J ro 10 x: [� ro JJ .IJ 4 —1 ra U) G 4 4J 4J +J Q) U) = da to U,C ro U) Gfn 4 ro nHNMC LnO 4 G • +J a 4 G ri .k U) G H .r U ro • (d ro Q) N ro O ro' tT z H ::5 • O 14 P7 a (n (o O u) G H G +) a ?,fro roro 4JOJ wrC rl \\ 000 • 4 0 0 0 0 ro 7 U v < 0 0 0 0 0 0 n QCA W ZQ 9l Jl> E- 0 o 0 v) no W da z Ln Ln Ln . . . nLn rN00 cocokc MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers O U O r Q) N r G +j rn rl ro ra s� 4 >v ro �:l 0 4j ro� �4j 4 O 0 G rorU'r+ v� o >, o G G ro M.� ro G I'd V G O Q �, o 1J .. U) ro 4 y Q) o v � ro'14 4 U) N Q) G v Q) naH a(.j s0 Information from'Eric von Goerlitz* ' (213) 372 -1171 701 Diamond Ave. Redondo Beach ' Jim Morrison Prop.Mgr. ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers *City employee -asst. 51 REDONDO BEACH The City of Redondo Beach leases the various portions of their marina. They have only one parcel, known as Parcel 25, utilized for Dry Storage. This is an area of ' 94,525 sq. ft. leased on a short term basis to Port Royal, pending conversion of the land to a different commercial use. Although this is leased on a two -year period, re- ' newable month -to- month, the City of Redondo normal practice is a 66 year lease, the maximum term allowable by the State. Parcel 25 is surrounding the corner of Harbor Drive and Beryl Street, with an empty service station site on the corner itself. The lease rental rate is $350 per month minimum, with a 25`0 of gross receipts override. In 1974 ' the percentage rental has been averaging about $450 per month. This is the equivalent of about 4.5C per sq. ft. per year minimum, and 5.7% percentage rental. ' Although the storage space is fairly full, it is not laid out for maximum effectiveness. So additional revenue ' could probably be extracted with some increased efficiency. There are no expensive improvements on the land, merely blacktop and chain -link fencing. Some thought is ' being given in the future to providing stacking frames, so that boats could be stored in four decks. It is estimated that the frames for such stacking could be constructed for about $450 to $475 per stall, and a fork -lift to handle up ' to 200 boats would involve about $35,000. If a lessee were to invest in such improvements and thus make better usage of the land area, the City of Redondo would probably ' reduce the percentage rental to about 7 -1/2 %. Information from'Eric von Goerlitz* ' (213) 372 -1171 701 Diamond Ave. Redondo Beach ' Jim Morrison Prop.Mgr. ' MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers *City employee -asst. 51 ' MARINA DEL :REY Marina del Rey has been developed by Los Angeles County as a large comprehensive marina with all types of related activities. The County spent approximately $36,250,000 in preparing the area, in- ' cluding dredging the channels, constructing breakwater, installing utilities, etc.. The resulting land -water parcels leased out were not improved with any buildings, fences, slips, floats, blacktop, ' etc.. The lessee had to provide any such improvements. Parcels were leased starting in 1963 on the basis of 60 -year lease with terms reviewed for adjustment at the 21st year, and every ten years thereafter. Required usages as specified, and optional us- ages are set forth in the lease terms. Other related usages may be undertaken with approval. Certain usages are prohibited. The rent schedules specify a minimum rental rate, and percentage rates based on a percentage of the cross receipts for each type of usage. When the percentage rent exceeds the minimum, the percent- , age rent prevails. Different percentages are specified for each type of usage, including the following: Dry Storage 10% Boat Rental 10% Anchorage 20% ' Two major parcels in the Marina del Rey complex are designated as Dry Storage Usage. These parcels are known as Parcel 44T and 77U. For these two parcels, the lessee is "44 Del Rey Properties ". ' Lessor is the County of Los Angeles.. The lessee has invested ap- proximately $1,000,000 in improvements for these parcels. Parcel 44T is a 17.4 acre (757,944 sq.ft.) parcel authorized for ' many uses, including Dry Storage, A:ichorage, Boat Rental, Yacht Sales, Boat Hoist, Vending Machines, etc.. There are 3 yacht clubs and a restaurant on the property. It is estimated that approxi- mately 160,000 sq.ft. are devoted to Dry Storage space, and ap- proximately 300,000 sq.ft. to anchorage. The major portion of Parcel 44T was leased in 1963 on the basis of a minimum rent of 8.1� per sq.ft. per year for land area, and 9.1C for water area. ' A smaller portion of the parcel was added later in 1968 on the basis of 12.14 per sq.ft. per year for both water and land. The total composite minimum rent is now $72,429 per year, or about ' 9.54 per sq.ft.. The Dry Storage area is not nearly utilized to full advantage, with a great deal of the space vacant, so that the percentage rate on Dry Storage does not currently approach the minimum rental. Overall parcel 44T has been averaging re- ' cently a percentage rate of approximately $120,000 per year, or about 15.80 per sq.ft. Parcel 77U is a 3.6 acre (156,816 sq.ft.) parcel used for Dry ' Boat Storage. Parcel 771,1 was leased in 1966 on the basis of a minimum rental rate of 64 per year per sq.ft.. This parcel is entirely devoted to Dry Boat Storage and Boat Rental. It is more ' fully utilized, and during the peal: season produces a percentage rent more than double the minimum. However, the overage is prim- arily due to boat rental activities. So the Dry Storage receipts ' are reasonably commensurate with the minimum rental rate. Information from Richard Landon Prop.Mgr. (213) 823-4571 Co. of L.A. ' 138:37 W. Fiji Way, Marine Del Rey MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers 52 MARINA DEL REY Facilities Tabulation As of July, 1974 Current Status Parcel Planned Acres Capac�it� Ter -Lhe Units Min.Rent (NUC = Now Under Construction) 23,500 Fuel dock open 1S 1.4 12 7 11.1 232 149 43,603 Anchorage + apartments open 8T /9U 15.2 251 293/387t 43,643 Anchorage + 203 apts. open ' 1OR 12.0 201 136 40,234 Anchorage + apts + restr.open 12R 18.0 465 120 85,969 Anchorage + apts + restr.open 13R 12.5 297 1 8 45,390 Anchorage + apts open 15U 17.2 253 2 8 79,986 Anchorage + apts + restr.open ' 1 R 18.0 462 204 108,672 Anchorage + apts + restr.open 20 5.7 157 --- 17,476 Anchorage + related uses open 21 5.8 218 - -- 19,220 Anchorage + related uses open 22R 1.8 24t 12,359 Motel + stores + restr.open 26T 5.8 - -- 164e 20,368 First 64 units open 27R 2.8 - -- 43t 19,032 Motel + restr. + retail open 28T 18.8 407 380 73,818 Anchorage open, apts, NUC 1 30R 11,3 281 33,691 Anchorage + club open ' 33R 2,5 - -- 30,223 Restaurant + coffee shop open 41 5.5 160 - -- 18,237 Anchorage + related uses open 42 -43 15.1 399 162t 52,842 Hotel, 2 restrs., slips open ' 44T 17.4 422/200d 72,429 Hoist,slips,restr.,clubs open 47T 5.6 201 54,570 Anchorage open 48R .5 14 - -- 1,500 Sea Scout Base NUC 50R 10.2 74,898 Shopping center open 51S ,5 - -- - -- 15,200 Service station open 53 7.2 113 -- 26,358 Anchorage + repair yard open 54 6.6 60 - -- 18,424 Repair yard open 55 1.5 23,500 Fuel dock open ' 56S 2.8 - -- - -- 13,594 Fisherman's Village open 61 1.3 - -- - -- 15,090 Restaurant open 64 5, 224 30,927 Apartments open 65R ,8 _ -- 2,688 UCLA Boathouse open 75T/94 2.4 13,761 Medical center open 76T 4,0 - -- - -- 17,042 Hi -Rise off. bldgs. open 77U 3.6 50/200d 9,3S ?2 Dry storage facility open 78U 2.0 40e Unleased site 93R ,2 500 Mobil Oil pipeline 95S 1.7 - -- - -- 1.8,001 Restr.,bank & offices open - -- 23,999 Retail center open -- 100S /IO1S 8.8 - 202 30,788 Apartments open 1023 9.6 - -- 624 37,546 363 Garden apts open; Hi -Rise NUC 103T 11.8 - -- 596 49,512 Apartments open 111T 16.6 271 240 53,401 Anchorage + apartments open ' 112T 25.4 369 606 133,181 Anchorage + apartments open 1135 23.1 --- 981 155,329 Apartments open NUC 125R 30.2 377 674/800t 406,245 338 slips open;Phase 2 hi -rise 129 .6 8,0'70 County Fire Station Restaurant open 130 1.7 132R 11.7 245 - -- 47,310 Anchorage + club open ' 131$/133S/134R 3.1 14458 2.0 =__ __- lilt 15,231 52,640 2 restr.,bank + off.bldg. open Hotel + fast food plaza open 150 .5 2,085 8,100 Savings & Loan office open Power substation 200 .6 - -- - -- ' BB ___ S666e ___ b'S 702 2, 201, 1 2 Loyola Univ.Boathouse open TOTALS e 400d 1525t Summary: 57 4 berths, 4867 apts. + 340 hotel /motel rooms open ' Code: t - transient; e - estimate; d - dry storage 53 MAWHINNEY & ASSOCIATES, INC. Real Estate Appraisers yl Jor IS2 R 18R IKZ /Zm xon 76J 3 wwr zoo Q4r lox fi FCC& 7 EE 1 oc---4,v xcWz e //V FEET ✓wwe ew.4o: ,W-&PloV.4 06L qEM //Xx EIOC c I II DEPARTMENT OF SMALL CRAFT HARBORS County of Los Angeles CHRONOLIGICAL COMPARISON BY USE CATEGORY ORIGINAL BID ANNUAL SQUARE FOOT RENTALS OF LEASED PARCELS Actual bid as a per - Established Actual cent of established Minimums Minimums Minimums Date of Parcel Land Water Land Water Land Water Bid Opening ANCHORAGES ' 8* 60 60 60 60 100% 100% 5/18/61 70 70 116.7% 116.7% 5/18/61 13 -14 6¢ 6¢ 8.50 8.50 141.7% 141.7% 5/18/61 ' 28, 29, 31, 32 60 60 6.1110 6.699¢ 101.9% 111.7% 2/8/62 41 60 60 7.560 7.560 126% 126% 2/8/62 43* 60 60 70 70 116.79 116.7% 2/8 62 11 1/62 20 60 60 7.10 7.10 118.3% 118.3% 6* 60 60 60 60 100% 100% 1 24/63 16 60 60 14.280 70 238% 116.7% 5/26/66 17 60 60 14.980 70 249.7% 116.7% 5/26/66 21 60 60 7.60 7.60 126.6% 126.6% 8/11/66 46s 80 80 12.10 12.10 151.2% 151.2% 5/21/68 ' APARTMENTS 64 8¢ 11¢ 137.5% 4/6/61 -- 810¢ -- 106.3% - - - - -- 3/1/62 24 7.5¢ -- -- 133.3% - - - - -- 3/1/62 ' 8 90 8/9/62 __ 10.25¢ 166.79 __ - - - - -- 1/10/63 APARTMENTS, CLUBS, RESTAURANT, MOTEL AND ANCHORAGE ' 9* 7.5¢ 6¢ 7.53¢ 6¢ loo.49 100% 5/18/61 7 80 6¢ 10.2¢ 8¢ 127.5% 133.3% 2/8/62 10 7.50 60 7.50 80 100% 133.3% 2/8/62 30 7.50 60 7.60 6.10 101.39 101.7% 2/8/62 42 7.50 60 110 70 146.7% 116.7% 2/8/62 15 7.50 60 10.20 10.20 145.79 170% 6/14/62 ' 38 -39 80 60 11.20 8.20 127.5% 136.7% 6/14/62 12 80 60 15.20 11.60 190% 193.3% 11 1/62 14/63 2, 80* 80 60 16.20 60 202.59 100% S 79* 7.50 60 7.50 60 100% 100% 1/24/63 18 -19 7.50 60 17.450 140 232.7% 233.3% 5/23/63 125 11.50 60 420 100 365.3% 166.7% 7/11/68 tFUEL DOCKS 1 300 60 1050 1100 350% 1850% 939.3% 4/6/61 ll 1/62 55 300 60 174.620 56.360 582.1% * Bid in combination with other parcels MAWHINNEY & ASSOCIATES, INC. Revised 7/19/68 RRL Real Estate Appraisers 54 .1 1 ' MAWHINNEY & ASSOCIATES, INC. i Real Estate Appraisers 55 Actual bid as a per - Established Actual cent of established Minimums Minimums Minimums Date of ' Parcel Land Water Land Water Land Water Bid Opening SPORTFISHING ' 56R 12.50 12.50 12.50 12.50 100% 100% 6/29/67 RESTAURANT ' 61 250 80 25.10 80 100.4% 100% 4/6/61 33R 150 60 310 60 207% 100% 2/17/66 ' HOTEL/MOTEL AND COMMERCIAL 76R lo¢ 10.27¢ 102.7% - 3/5/61 ' 95R 170 __ 24.027¢ -- 141.3% - 5/28 /6 5/2/68 97R 20¢ -- 29.819¢ 149.1% - _____ ' BEACH CONCESSION 22 10¢ -- 27 10¢ -- 21.1¢ 15.82¢ -- -- 211% 158.2% - - - - -- - - ---- 4/12/62 11/1/62 ' COMMERCIAL 50R - 1720¢ 170% 11/21/63 8 66 75 lo¢ -- 94 8¢ -- 8¢ __ -- 200% 100% - - - - -- - - - - -- 1 4/27/67 ' AND LAUNCHING MARINE SALES AND SERVICE, DRY STORAGE ' 44 7.50 60 8.10 9.10 108% 151.6% 2/28/63 DRY STORAGE ' 77T 6¢ 6¢ 6¢ 6¢ 100% 100% 6/16/66 BOAT HAULOUT, REPAIR AND ANCHORAGE ' 53 72 60 8.110 8.770 115.9% 146.2% 31PA2 3 54 1.30 4.70 7.50 50 576.9% 106.3% ' GASOLINE STATION 51 15¢ -- 35.9673¢ -- 239.8% - - - --- 8/9/62 ' UNIVERSITY BOATHOUSE S¢ 6¢ g¢ __. 6¢ 100% - -- - 100% 2/8/62 2/3/66 BB -- 1 ' MAWHINNEY & ASSOCIATES, INC. i Real Estate Appraisers 55 QUALIFICATIONS MAWHINNEY & ASSOCIATES. INC. Real Estate Appraisers 56 PROFESSIONAL: MAWHINNEY & ASSOCIATES, INC. QUALIFICATIONS OF JOHN R. MAWHINNEY REAL ESTATE APPRAISER Independent Fee Appraiser since 1957, with experience in the estimation of fair market value of fee title, power line easements, access easements, pipeline easements, avigation easements; the valuation of leasehold interests, possessory interests; and economic feasibility studies; Qualifications for Expert Testimony be -ore the following: Federal Courts, Los Angeles Superior Courts, Monterey County Federal Bankruptcy Court, San Diego Superior Courts, Orange County Federal Claims Court, Los Angeles Superior Courts, Riverside County Superior Courts, Imperial County Superior Courts, Stanislaus County Superior Courts, Kern County Superior Courts, Ventura County Superior Courts, Los Angeles County Los Angeles County Board of Supervisors Instructor: 1962.63 Fullerton Junior College: Adult Education — Appraisal Course No. 2231 Membership in the following professional organization: National Association of Independent Fee Appraisers Senior Member Representative Appraisal Clients include the following: DEVELOPERS: Cameron Land Co. Capistrano Acreage Co. D & E Corporation Deane Bros. Inc. Fait -Nott Galaxy Homes A. L. Gindling Robert H. Grant Co. Greschner Co. George Holstein & Sons Klug Development Co. Larramore Construction Co. Lusk Development Co. NON - PROFIT ORGANIZATIONS: Macco Corporation Metrim Corp. Morgan - Gardner Inc. Olympia Corp. Orr International Rancho California Regis Development Co, Rinker Development Co. Ronal Development Co. S & S Development Co, Santa Fe Engineers R. H. Watt Properties, Inc. ' Bauer Ranch Bresa del Mar Ranch Bolz Ranch Hendrick Ranches t Moulton Ranch Nohl Ranch O'Neill Ranch Rancho California Whiting Ranch ' LENDING INSTITUTIONS: Bank of America N.T. & S.A. Citizens National Bank of Los Angeles ' First Western Bank & Trust Co. Long Beach Federal Savings & Loan Association ition United California Bank 57 First Assembly of God Church ' Girl Scout Council of Orange County Irvine Foundation Orange County Society for Crippled Children & Adults Santa Ana Elks Club Southeastern Calif. Assoc. of Seventh Day Adventists Spanish Traits Girl Scout Council RANCHES: ' Bauer Ranch Bresa del Mar Ranch Bolz Ranch Hendrick Ranches t Moulton Ranch Nohl Ranch O'Neill Ranch Rancho California Whiting Ranch ' LENDING INSTITUTIONS: Bank of America N.T. & S.A. Citizens National Bank of Los Angeles ' First Western Bank & Trust Co. Long Beach Federal Savings & Loan Association ition United California Bank 57 ' Experience includes appraisal of residential properties, both single family and multiple family developments; subdivision acreage; commercial and industrial acreage; and agricultural properties. Industrial properties included such diverse uses as warehousing, manufacturing processes, foundries, machine and cabinet shops, and dairy distribution operations. Commercial appraisals included nurseries, trailer parks, gasoline stations, auto agencies, movie theatres, motels, shopping centers, office buildings, medical centers, restaurants, ' and a golf course. Agricultural properties included several ranches in excess of 5,000 acres, irrigated farm lands, orange groves, lemon groves, truck farms, poultry farms and dairy farms. Miscellaneous: marinas, ski lifts, sand and gravel pits, cemeteries, sanitary land fills, wax museum, churches. EDUCATION: ' Graduated from Los Angeles High School System, 1946 Graduated from University of California at Berkeley PUBLIC AGENCIES: B.A. Degree, 1955 Anaheim Union High School District City of Newport Beach Masters Degree, 1956 California Div. of Highways City of Norwalk City of Anaheim City of Orange University of Southern California, City of Avalon City of San Clemente City of Bakersfield Costa Mesa Union School District ' City of Baldwin Park Fountain Valley School District City of Bellflower L.A. Dept. Water & Power City of Fountain Valley Moulton - Niguel Water District ' City of Fullerton City of Huntington Beach Ocean View School District Orange Unified School District City of Inglewood Pacific Electric Railroad Company City of Los Alamitos Superior Court of Orange County City of Montebello Yorba Linda School District MISCELLANEOUS: 1 Anchor Investment Co. Anderson Desk Co. Metcalf Plaza R. J. Noble Co. BKK Corp. Owens - Illinois Co. Boyle Engineering Pacific Indemnity Co. Buffums' Coastline Provision Co. Property Research Corp. Reeves Rubber Company Colony Kitchens, Inc. Robertson Chevrolet Con Rock Co. Rodeffer Industries Dix Box Co. Rose Hills Memorial Park Dunvegan Corp. Roxford Golf Course Saga Motor Hotels Fairhaven Memorial Park Four Star Investment Co. Standard Brands Paint Co. Georgia Pacific Corp. Greer Industries Sunshine Acres, Inc. Title Insurance and Trust Co. Law Building Corporation Town & County, Inc. Lewis Holding Company Treeland Nursery Mammouth Mountain Ski Lift Tustin Packing House ' Memory Garden Memorial Park Vard Products TYPES OF PROPERTY APPRAISED: ' Experience includes appraisal of residential properties, both single family and multiple family developments; subdivision acreage; commercial and industrial acreage; and agricultural properties. Industrial properties included such diverse uses as warehousing, manufacturing processes, foundries, machine and cabinet shops, and dairy distribution operations. Commercial appraisals included nurseries, trailer parks, gasoline stations, auto agencies, movie theatres, motels, shopping centers, office buildings, medical centers, restaurants, ' and a golf course. Agricultural properties included several ranches in excess of 5,000 acres, irrigated farm lands, orange groves, lemon groves, truck farms, poultry farms and dairy farms. Miscellaneous: marinas, ski lifts, sand and gravel pits, cemeteries, sanitary land fills, wax museum, churches. EDUCATION: ' Graduated from Los Angeles High School System, 1946 Graduated from University of California at Berkeley . B.A. Degree, 1955 Graduated from Tufts University, Boston, Massachusetts, Masters Degree, 1956 Pasadena City College, Real Estate Appraisal, 1957 University of Southern California, ' i American Institute Case Study Courses 1 and 2, 1958 En L.AW OFFICES NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN THIRTIETH FLOOR UNION BANK SQUARE 445 SOUTH FIGUEROA STREET LOS ANCELES, CALIFORNIA 90017 TELEPHONE (2131 628 -5221 July 3, 1974 The I-Ionorablc City Council City of Newport Beach 3330 Newport Boulevard Newport Beach, California 92660 Attention: Dennis O'Neil, Esq. City Attorney Gentlemen: You have asked for our opinion regarding the authority of the City of Newport Beach ( "City ") to enter into the proposed Renewal of Lease Agreement ( "Lease Re- newal"), prepared by the Lido Isle Community Association, an association consisting of the owners of land on Lido Isle ( "Association "), renewing the existing lease ( "1951 Lease ") with the Association covering certain lands in and adjacent to Lido Isle ( "Leased ands ") and the procedure to be followed in any such renewal. The background of the Lease Renewal raises a number of questions that are relevant to the broader issue of tree City's administration of the tide and submerged lands ;ranted to it by the State of California ( "State "). With due regard to the limitations that were imposed upon our scope of inquiry many of these questions could not be re- searched and treated in a comprehensive fashion. Further, we have assumed that the City is able to find and determine that the Leased Lands cannot be used for public purposes. Subject to these qualifications and those which follow and based upon the facts that are set forth herein we are of the o union that: 1. The City ha:`, the authority to enter into the 'Icnewal provided that the Renewal is modified as ['oIi ow: ;: (a) The general u::es set forth in the 1951 Lcaoe are restricted to those specified uses which the City is able to find are consistent with the public truct for commerce, navigation and fishery. We recom- mend that the uses be limited to beaches, recreational XOSi AMA N, WATERS, Sco "CC, KRUEGER & R[O RDA N Dennis O'Neil, Esq. July 3, 1974 Page Two piers and other specified water- oriented recreational purposes. (b) The lands covered by the 1951 Lease are substantially reduced in size and at least delete those lands designated as Parcels A and B in the 1951 Lease, except those portions of Parcels A and B which are accessible and available for use by all members of the Association for park or water- oriented recreational purposes. The size of the area covered by a lease may affect its validity and the Parcel A and B lands should be so reduced because they cover an extensive area, almost completely surround Lido Isle, and, except for certain park and beach areas, are not generally used for the benefit of all the members of the Association. In this regard we note that major portions of such lands are primarily used in connection with private wharves. Such portions should be excluded from the Lease Renewal but can, of course, be the subject of ndividual leases from the City to wharf - owners. The reduction of the Leased Lands will create a reduction in the rental payable by the Association which the City would otherwise be required to impose. 1 (c) The annual rental contained in the Lease Renewal is modified to provide for a reasonable rental return determined by objective standards. We recommend that the leasing procedure of the State Lands Commission for state lands be adopted and that the rental be based on a fixed percentage of the appraised value of the lands covered by the Lease Renewal, subject to periodic adjustments by reappraisal. (d) The quiet enjoyment covenant of the City ' contained in the 1951 Lease is modified by providing that said covenant is subject to the right of the State of California to use the Leased Lands free of charge which was reserved in the 1919 Statutory Grant and any other conditions disclosed by a current title report on lands covered by the Lease Renewal. 1 The Statutory Grant also provided: I I L ' NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Three "The absolute right to fish in the ' waters of said harbor with the right of convenient access to said water over said lands for said purpose is hereby reserved to the people of the State of California." It could be contended that this reservation ap- plies to all of the Leased Lands and should also be included in an exception to the quiet enjoyment covenant. This would, however, create an encumbrance ' that might be inconsistent with certain of the leasehold uses and we believe that the purposes of the reservation can be met by designating a reasonable ' number of specific routes for access across the Leased Lands to the waters of the harbor. These access routes should also satisfy other statutory I restrictions. We recommend that such routes be available for fishery, general public recreational purposes and other uses encompassed within the trust purposes of commerce, navigation and fishery. 2. The Lease Renewal may be subject to the Coastal Zone Conservation Act of 1972 (Proposition 20) if the Lease ' Renewal were characterized as constituting a change in the use of the Leased Lands on the basis that it is akin to a new lease of lands which would otherwise be unencumbered upon the expiration of the 1951 Lease. Because the question of whether the Lease Renewal is subject to said Act cannot be answered without qualification, we recommend that the City file for an exemption from said Act with the South ' Coast Regional Commission which could then request an opin- ion from the Attorney General on this matter. If the opinion were that the Lease Renewal was exempt from the Act, the Regional Commission would probably grant an exemption. If the opinion were that a permit under the Act was required, the City would need to obtain favorable action of the Com- mission (and the State Commission if the matter were appealed) by a two - thirds vote. 3. The Lease Renewal. is subject to the Environ- mental Quality Act of 1970. The City Council in satisfying the requirements of the Act may be able to prepare a Nega- tive Declaration in lieu of an environmental impact state- ' ment, if it is determined that the Lease Renewal will not have a significant effect on the environment. I i ' NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN I Dennis O'Neil, Esq. July 3, 1974 Page Four I No engineering studies or title searches were undertaken to determine the types of lands being leased and this letter is qualified in that regard. The facts upon which this opinion letter is based and our analysis of the issues involved follow in that order. ' FACTS The Association by a letter, dated October 4, ' 1973, addressed to Robert L. Wynn, City Manager, requested that the City renew the existing lease between the City and the Association, dated July 11, 1951, as modified by amend- ' ments dated May 22, 1954, and March 23, 1959 (said lease and the amendments thereto are herein collectively referred to as "1951 Lease "). The Lease Renewal provides for the 1951 Lease to be renewed for a term of 25 years commencing from the date of the Lease Renewal and provides for an annual rental of $3,566.18, which is higher than the rental of $750.00 per year under the 1951 Lease. It is proposed that the annual rental, which is payable in advance, will be ad- justed every five years pursuant to the following formula contained in the Lease Renewal: "Multiply the initial rent hereunder ($3,566.18) times the total assessed value of all property on Lido Isle for the tax year immediately prior to the year in which the adjustment is to take effect and divide that product I by the total assessed value of all property on Lido Isle for the taxable year 1972 - 1973." I I The Lease Renewal further provides that all other provisions of the 1951 Lease are incorporated by reference into the Lease Renewal. Under the provisions of the 1951 Lease, the Associ- ation's use of the Leased Lands is limited to "recreational, educational and civic purposes." The 1951 Lease also con- tains a covenant by the City with respect to the quiet en- joyment of the Leased Lands by the Association. The Leased I I NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Five Lands covered by the 1951 Lease consist of the following five parcels, which are shown on the map appended hereto as Exhibit A ( "Map "): (1) Parcel A: "[a]1.1 those certain tide 1 lands, submerged lands, swamp and overflow lands in Newport Bay," which are ten feet in width surrounding Lido Isle "parallel to and adjacent to and bayward of ' the United States Government Bulkhead Lines." (2) Parcel B: "those certain uplands abutting on tidelands, submerged lands, swamp and over- flow lands, as described in Parcel 'A'." More specif- ically, Parcel B lands consist of (i) a strip extending L along the Lido Channel side of Lido Isle approximately 50 feet in width adjacent to and landward of the Bulk- head Line and (ii) Lettered Lots A, E, F, G, H, I and J. Excepted from Parcel B are "all easements for public utilities, street lighting, storm drains and public ways opened or dedicated for public purposes as of record." (3) Parcel C: 11[a]11 those certain tide- lands, submerged lands, swamp and over -flow lands in ' Newport Bay," which lands are in a triangular shape located between Lettered Lots B and D and are parallel to and landward of the Bulkhead Line. (4) Parcel D: "uplands" consisting of Lettered Lots B, C and D, which abut those lands de- scribed as Parcel C. Excepted from Parcel D are "all ' easements for public utilities, street lighting, storm drains and public ways opened or dedicated for public purposes as of record." I I I I ,1 (5) Fifth Parcel: This parcel contains lands which are adjacent to the Lido Isle bridge. Most of these lands are located bayward of the Bulkhead Line and Pierhead Line. A this letter as Exhibit more extensive summary of the facts relating to is set forth in the Chronology attached hereto B ( "Chronology "). ' NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Six ' ANALYSIS I 1 LEASING A. AUTHORITY OF THE CITY OF NEWPORT BEACH TO LEASE. Because a substantial portion of the Leased Lands are tide and submerged lands which were conveyed to the City by the State pursuant to the 192_9 Statutory Grantl described in the Chronology, the legal restraints upon the leasing of those categories of land necessarily apply. Pursuant to Article XV, Section 3 of the California Constitution, all tide and submerged lands within two miles of an incorporated city are withheld from grant or sale to private parties. It is well established, however, that this constitutional provision does not prohibit leases as a "grant or sale" so long as the same are consistent with the public trust for commerce, navigation and fishery which affects such lands. 1 City of LonE Beach v. Vickers, 55 Cal. 2d 153 (1961); City of Oakland v. Williams, 20 Cal. 315 (1929); San Pedro etc. R.R. Co. v. Hamilton, 161 Cal. 610 (1911); 34 Cal. Ops. ' Atty. Gen. 4 TI-959). Additionally, the City as a matter of general law has only the legal capacity to enter into autho- rized leases. Whether the City has the authority to enter into the Lease Renewal, then, necessarily depends upon its terms and provisions. As to that portion of the Leased Lands which con- ' sists of tide and submerged lands, the City has been specif- ically authorized to lease them pursuant to the 1919 Statu- tory Grant which provides that the City may lease all "tide- lands and submerged lands within the present boundaries of said City, and situated below the line of mean high tide of 1. Such lands appear to have been conveyed by this Statute which conveyed all lands "which border upon or are in front of the upland now owned" by the City. On the other hand, a Superior Court decision indicates that said lands were conveyed by the 1.927 Statutory Grant described in the Chronology. See C of Newport Beach v. Title Insurance it and Trust Coin pany, Case No. 233$9 dated May 25, 192 The two Statutory Grants are very similar, in provision and effect. NOSSAMAN, WATERS, SCOTT, KRU EGER h RIORDAN I ' Dennis O'Neil, Esq. July 3, 1974 Page Seven the Pacific Ocean . . . for a period not exceeding twenty- five years . . . ." By the 1929 Statutory Amendment described in the Chronology, the lease term limitation was extended to fifty years. In addition, the City has the power to lease all of the Leased Lands pursuant to the general authorization ' provided to cities by Government Code Section 37385 and Civil Code Section 718. Section 37385 of the Government Code, which is similar to Civil Code Section 718, provides: ' "A city may lease tide and sub- merged lands, the wharves, docks, piers, and other structures or improvements on these lands, and as much of the uplands abutting upon them as the legislative body deeris necessary for the proper de- ' velopment and use of its waterfront and harbor facilities " Although the Leased Lands are described as consist- ' ing in part of "swamp and overflow lands ", we are of the opinion that there are no special problems in leasing such lands by the City, provided the rec_uirements for leasing 1 tide and submerged lands and uplands have been satisfied. With respect to limitations on the power of the City to lease lands, Section 1402 of the Charter of the City of Newport Beach provides that the City shall not lease "any waterfront or beach property" until the leasing of such lands have been approved by a majority of the electors voting on such proposition at any general or special munic- ipal election. However, this restriction by the terms of said Section does not apply to "the future leasing or re- leasing of such property under lease at the effective date of this Charter." The Charter became effective in 1955 [Chapter 1, California Statutes of 1955] and the property I covered by the Lease Renewal was under lease pursuant to the 1951 Lease on the effective date of the Charter; accordingly, said restriction is not applicable. The term of the Lease Renewal, which is for twenty -five years, and the term of the 1951 Lease, which is I I INOSSA MAN, WATERS, SCOTT, KRUEGER & MORI) AN I Dennis O'Neil, Esq. July 3, 1974 Page Eight for twenty -five years, together do not exceed the fifty year ' Limitation contained in the 1929 Statutory Amendment. Further, while there were leases in 1929 and 1938 to the Association and while the 1929 Lease did provide for an I option to extend for an additional period of time, there was never a period exceeding fifty years where the issue of extending or renewing the lease covering the Leased Lands was not subject to the sole discretion of the City Council. See Epstein v. Zahloute, 99 Cal. App. 2d 738 (1950); Fisher V. Parsons, 213 Cal. App. 2d 829 (1563); 31= Cal. Cps. Atty. Gen. 44,, 16 -19 (1959); see also annotations contained in 17 I A.L.R. 2d 566, 571 (29571 B. USES. Cities are limited in the uses which they may per- mit under leases. 10 McQuillin, The Law of Municipal Corps- rations, 528.42 (1966) states: "The leasing and permitting the I use of municipal property is usually authorized, provided the public inter- est is served, or at least is not de- stroyed or diminished thereby. [Citing Oakland v. Williams, 206 Cal. 315 (1929)•] Unconditional private uses are not favored, especially where specific legis- lative authorization therefor is lacking; however, judicial approval of the use and the conditions thereof' will depend upon ' the grant of power to the municipality and the nature of the particular trans- action considered mainly from the stand- point of public requirements [citing Board of Port Com'rs of City of Oakland v. Williams, 9 Cal. 2d 3 1 (1937 , especially the need for public purposes Iof the involved property." With respect to that portion of the Leased Lands 1 which was conveyed as tide and submerged lands to the City by the 1919 Statutory Chant, the City has a high duty of I I I INO5SAMAN, WATERS, SCOFF, KRULCLR 4 RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Nine responsibility in the management of these lands since the 1 City does not hold them in a mere proprietary capacity but as successor in interest to the State "in trust for public purposes which have traditionally been delineated in terms ' of navigation, commerce and fishery." City of Long Beach v. Mansell, 3 Cal. 3d 462, 482 (1970); City of Long Beach v. Marshall, 11 Cal. 2d 609, 614 (1.938); People V. Monstad, 209 Cal. 657, 661 (1930). This means that the City can make no 1 disposition of such lands which will be prejudicial to the public trust [Ward v. Mulford, 32 Cal. 365, 372 (1867)] and must adopt such lands to the use for public trust purposes. People v. California Fish Co., 3.66 Cal. 576, 597 (1913)• This trust duty is reflected in the 1919 and 1927 Statutory Grants and the 1929 Statutory Amendment. According to the ' 1919 Statutory Grant, the tide and submerged lands are only to be leased "for purposes consistent with the trust upon which said lands are held by the State of California and with the requirements of commerce or navigation at said harbor." Thus, in leasing tide and. submerged lands the City must lease such lands in accordance with the public trust. See City of Lono Beach v. Marshall, 11 Cal. 2d 609 (1938); Ko er v. Miner, 172 Cal. 191 ;; 34 Cal. Atty. Gen. 1, 1 11 1959). in Oakland v. Larue Wharf & Warehouse Co., 179 Cal. 207, 215 (179i T) it was stated in this regard that: "In each of the recent California cases L cited by appellant, viz., San Pedro etc. Co. v. Hamilton, 161 Cal. 10 and Koyer v. Miner, 172 Cal. 448, this court upheld ' the leases in question, and in the former case expressly approved the policy of mak- ing such leases of waterfront lands as would tend to interest private capital in the improvement of harbors, the case of Pacific Coast S.S. Co. v. Kimball, 114 Cal. 1 , being cited as illustrative of the beneficent effects of this policy, although in that case the lease was of lands fronting on Monterey Bay for the 1 construction and operation of a wharf I I 1 NOSSAM AN, WATERS, SCOTT, KRULGER 5 RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Ten for private use, the theory of this lat- ter case as expressed therein being that the lease therein upheld was promotive of commerce and navigation. It is also to be noted that in each of the cases of San Pedro etc. R.R. Co. v. Hamilton, supra, and Koyer v. Miner, supra, the leases in question did not expressly specify or require that the lands so leased must be used for any particular purpose promotive of commerce and nav- igation. Both leases were nevertheless upheld. " Section 37386 of the Government Code defines per- missible leasehold uses of tide and. submerged lands: "A city may lease such [ @;ranted] tide and isubmerged lands and uplands for: (a) Industrial uses. (b) Improvement and development of city harbors. (c) Construction and maintenance of wharves, docks, piers or bulkhead piers. (d) Other public uses consistent with the requirements of commerce or . navigation in city harbors." See also Civil Code Section 718 which is similar to Government Code Section 37386• With respect to uses which are considered to be consistent with the public; trust, it is clear under California law that a wide variety of uses are permitted. Commerical piers and wharves [People v. Monstad, 209 Cal. 658 (1930); 1 Crystal Pier Amusement Co. v. Cannan, 219 Cal. 184, 185 (1933); Pacific Coast S.S. Co. V. Kimball, 114 Cal. 414 (1896)], yacht club facilities Los An Iles Athletic Club v. Board of Harbor Commrs., 130 Cal. App. 37 1933 railroad I i INOS SAMAN, WATERS, SCOTT, KRUEGER - RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Eleven I purposes [Koyer v. Miner, 172 Cal. 448 (1916); San Pedro ' etc. R.R. Co. v. Hamilton, 161 Cal. 610 (1911)], mineral operations LBoone v. Kingsbury, 206 Cal. 148, 183 (1928)], Y.M.C.A. dormitory facilities to serve, in part, merchant seamen [People v. City of Long Beach, 51 Cal. 2d 875, 879 (1959)], warehouse operations [city of Oakland v. Williams, 206 Cal. 31 -5, 330 (1929); Oakland v. Larue Wharf & Warehouse Co., 179 Cal. 207, 209 (191)], and restaurants, cocktail lounge,, and small shops [34 Cal. Ops. Atty. Gen. 4 (1959); Martin v. Smith, 184 Cal.. App. 2d '371 (1960)] have been upheld as permissible leasehold uses of tide and submerged lands which were consistent with the public trust. To determine which lands of the Leased Lands may be subject to the public trust for commerce, navigation and fishery, it would probably be necessary for the City to undertake an extensive engineering study.2 We do not, how- 1 ever, believe that such work will be necessary if the City 2. In City of Newport Beach v. Title Insurance and Trust Company (Superior Ct. Case No. 236d9, 192d) "Decree Line case "), the court set the "line of ordinary high tide of the Pacific Ocean" ( "Decree Line ") and held that the ' lands landward of the Decree Line 'belonged to Title Insur- ance and Trust Company and the lands bayward of the Decree Dine were "tidelands and submerged lands" and belonged to the City pursuant to the 1927 Statutory Grant. By Chapter 172, California Statutes of 1929, the Decree Line was estab- lished and declared to be the line of ordinary high tide. Chapter 172 further stated that the grants to the City in- cluded all tidelands, whether filled or unfilled, bordering said line. Parcel B as described in the 1951 Lease, exclud- inC a portion thereof adjacent to the Lido Isle bridge, :is .Located bayward of the Decree Line and Parcel C as de- scribed in the 1951 Lease is located bayward of the Decree Line. The other three parcels included in the 1951 Lease are generally located landward of the Decree Line. However, the Decree Line case may not be determinative as to owner- ship nor as to the character of the Leased Lands, especially those lands landward of the Decree Line, for two reasons. 1 First, the Decree Line case set; the line of ordinary high tide as it ws i � a n 1928 and not the ordinary high tide line in its last natural condition. According to California I I NOSSAMAN, WATERS, SCOTT, KRUECCR & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twelve complies with the laws rovernin, tide and submerged lands in I leasing; all of the Leased Lands. Moreover, we believe, as will. be discussed below, that any of the Leased Lands which are not tide a.nd submerged lands are of a character which 1 requires a similar responsibility on the part of the City in leasing, lands. Assuminlr. that those lands landward of the ordinary h.ih tide line as set forth in City of New ort v. Title In- surance and Trust Company (Superior Ct., Case No. 23 9, 192 are not subject to the public trust for commerce, navigation and fishery, such lands in our opinion should be treated as potentially being subject to similar restric- tions on use. It is clear that these lands are necessary for access to the navi,;able waters of the bay and, there- fore, are necessarily of the quality deserving of special protection by the City and the State for the benefit of the public. See Cal. Const. Art. 1.5, Sect. 2; Marks v. Whitney, cases, artificially filled tidelands are still considered subject to the public trust for commerce, navigation and fishery. Ciity of Newport Beach v. Fag;er, 39 Cal. App. 2d ' 23, 30 (19x40)0). Because there is evidence that prior to 1928 the lands in and adjacent to Lido Isle were subject to dredge and rill operations [The_ Register, January 25, 19731 it is possible that there could be lands subject to the public trust which are landward of the Decree Line and would not be subject to the decision in the Decree Line case since it was premised on the ordinary high tide line in 1928. ' This conclusion is reinforced by the fact that Chapter 172, California Statutes of 1929 stated the City held tidelands, whether filled or unfilled, which bordered the Decree Line. Second, it seems clear that boundary line agreements which do not reflect a good faith effort to determine the true boundaries of tide and submerged lands may not be conclusive on this issue. Boundary line cases which do not expressly involve the existence or non - existence of the public trust may not adjudicate the existence of the public trust and are thus not res judicata on this issue. See City of Long Beach v. Mansell, 3 Cal. 3d 462, 482. (1970). P NOSSAMAN, WATER S, SCOTT, KRULUER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirteen 6 Cal. 3d 251 (1971). See also Gion V. City of Santa Cruz_, 2 Cal. 3d 29 (1970); 10 McQuillin, The Law of Municipal Cor- porations §28.38 (1966); Hoadlev v. San Francisco, 70 Cal. 320 (1886), aff'd. 1.24 U.S. _3_9_(1857)- It is noteworthy that our factual research has revealed that certain of the above lands, Lettered Lots A to K, were conveyed to the City for beach purposes. In this respect, the 1928 debates in the City Council reflect the concern by the Council that such Lots be subject to beach uses. "Considerable discussion has been indulged over the acceptance of the Lido 1 map by the city council, which insists that at least six street ends be dedi- cated to the public. "The council feels that the public should riot be denied the beaches, which, they say, are being all too rapidly ab- sorbed by private interests." Newport ' News (August 23, 1928). While the history is not free from ambiguity (see the Chro- nology), it is clear that the prudent course is for the City L to administer these Lots as though they were impressed with a trust for this purpose. We suggest that in the light of the current trend to protect and preserve recreational areas reflected by legislation and ,judicial decisions and for the purpose of ' achieving uniformity in approach, the City treat any of the Leased Lands used as beaches or for access thereto as if such lands were subject to a public trust for these pur- poses. It is noteworthy in this regard that Government Code Section 37386 and Civil Code Section 718, supra, authorizing leases of tide and submerged lands are also applicable to uplands abutting such lands. I NO15 AMAN, WATERS, SCOTT, KRULGC:R R RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Fourteen With respect. to determining whether the uses under the Lease Renewal are consistent: with the public trust by which the City holds the Leased Lands, the uses enumerated in the 1951 Lease are limited to "recreational, educational and civic purposes." The 1951 Lease lists uses which are considered indicative of these purposes such as marinas, boat landings, playgrounds, floats, wharves and piers. This list, according to the 1951 Lease, was "not to be deemed a limitation of the uses and purposes." In a recital clause contained in the 1951 Lease, it is stated that in the ' judgment of the City Council such lease uses are not incon- sistent with the trust imposed upon. the Leased Lands which "ma.y constitute tidelands or harbor, frontage " Notwithstanding the 1:1,st of uses, the general purpose clause of the 1951 Lease appears to be overly broad since certain recreational, educational or civic uses may be inconsistent with the public trust under which the City holds the Leased Lands. For example, the construction of a public school or Lido Isle Association civic center cn Lettered Lots A to J would be inconsistent with their use for beach purposes. In order to eliminate this problem, we suggest that the Lease Renewal set forth specific lease uses for designated areas in place of the general purpose clause. Such specific uses must be consistent with the public trust under which the City holds the Leased Lands and the City Council must be able to so find. Further, as will be more fully discussed below with respect to exclusive use, the City, in conjunction with its finding as to specific uses, should also be able to find and determine that the Leased Lands cannot be feasibly used for public purposes. C. EXCLUSIVE USE. A lease of city- owned. tide and submerged lands which results in the exclusive occupancy of such lands by private parties to the exclusion of the general public is generally permitted under California law provided there is no express restriction on the city's authority and provided that the lands subject to lease constitute a relatively small parcel. In 23 Cal. Ops. Atty. Gen. 97, 99 (1954), it was stated: 1 NOSSA AAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Fifteen ". . . it has long been recognized and accepted in this State that the State might lease a portion of its property, as permitted by law, without the necessity of the lessee holding that property open for general public use. This is so obviously the practice as to require no citation of authority, and there is no reason why any different rule should be adopted with reference to minor structure permits -- which permits are in their very nature leases." See People v. Monstad, 209 Cal. 658, 662 (1930), (the power to lease includes the power to :Lease to an individual, firm or corporation for the purpose of erecting a private wharf or pier); Pacific Coast S.S. Co. v. Kimball, 114 Cal. 414, 416 (1896), (no ground for contention that the City of Monterey could not lease any portion of the harbor for a private wharf); San Pedro etc. R. R. Co. v. Hamilton, 161 Cal. 610 (1911); Oakland v. Larue Wharf & Warehouse Co., 179 Cal. 209 (1918); City of Oakland v. Williams, 206 Cal. 315 ' (1929); Los An.eles Athletic Club v. Board of Harbor Commrs., 130 Cal. App. 37 1933 . ' The Lease Renewal incorporates the 1951 Lease which contains the City's covenant to the Association of quiet enjoyment. The 1951 Lease could, therefore, be construed to mean that the Association has the exclusive use of the Leased Lands. This exclusive use may, however, be subject to public rights discussed below which the City has not terminated or may not have the authority to terminate, and appropriate changes in the lease or exceptions to the cove- nant of quiet enjoyment should be made. First, the 1919 Statutory Grant reserves to the public the right of access over and the right to fish on that portion of the Leased Lands conveyed to the City by said Grant in the following languagle: "The absolute right to fish in the waters of said harbor with the right of covenient access to said waters over 1 I� I I L I I I I NOSSAMAN, WATERS, SCOT"I', KRUEGER \ RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Sixteen said lands for said purpose is hereby reserved to the people of the State of California." See Fireman's Fund Insurance Co. v F.2d 148, 153 9th Cir. 1964). rd Oil Co. of Cal., 339 Second, Section 53036 of the Government Code, in providing that cities shrill reserve a right of access or make available an alternative access route in leasing beach front property, states: "No local agency . . . shall sell, lease or otherwise transfer real prop- erty owned by it and lying between the high water line of the Pacific Ocean and the public street or highway nearest the Pacific Ocean without reserving to the public the right of access over such real property, unless such local agency or its grantee shall make available to the public an alternate route which, in the judgment of the local agency, gives equal or greater public access to the Pacific Ocean in the same immediate vicinity." This provision is consistent with and in furtherance of Article XV, Section 2 of the California Constitution which provides: "No individual, partnership, or corporation, claiming or possessing the frontage or tidal lands of a harbor, bay, inlet, estuary, or other navigable water in this State, shall be permitted to exclude the right of ,aay to such water whenever it. is required for any public purpose, nor, to destroy or ob- struct the free navigation of such water; and the Legislature shall enact such laws as will five the most liberal construction to this provision, so that NOSSAMAN, WATERS, SCOTT, KRUEGE.R $, RIORDAN ' Dennis O'Neil, Esq. July 3, 1974 Page Seventeen access to the navigable waters of this State shall be always attainable for the people thereof." The protection of access to beaches and navigable waters is also reflected in Government Code Section 39933, regardi.nf; the protection of free and unobstructed access by the public from public streets to navigable waters, and Government Code Section 54091, regarding free access to beaches regardless of race, religion or national origin. In addition, the decision in Marks v. Whitney, 6 Cal. 3d 251 (1971) . held that the littoral high -tide property owner has a right from his beach frontage to the line of ordinary low tide. The right of access and the right to fish are rights which are reflected in the public trust for commerce, navigation and fishery. Although it could be argued that the right of access and right to fish can be restricted or eliminated [People v. Monstad, 209 Cal. 658 (1930), supra], prudence dictates that the City should provide designated routes of public access through the Leased Lands which are reasonable in number for purposes encompassed within the trust, for commerce, navigation and fishery. ' Third, the 1919 Statutory Grant states in pro - vidin,_r' that the granted lands are to be used for the estab- lishment of a harbor: 1 I �i "Said harbor shall be improved by said city without expense to the state and shall always remain a public harbor for all purposes of commerce and navigation, and the State of California shall have at all times the right to use, without charge, all wharves, docks, piers, slips, quays and other improvements constructed on said lands or any part; thereof for any vessel or other water craft or rail- road owned or operated by the State of California." 1 I �i NOS SAMAN, WATERS, SCOTT, KRUECER � RIORD.AN Dennis O'Neil, Esq. July 3, 1974 Page Eighteen Fourth, in a title report issued by Title Insur- ance and Trust Company, No. 252576 -RD, dated July 30, 1958, which report covers Lettered Lots A to J, it is stated that these lots are subject to: ' "An easement for ingress and egress in favor of the public over said land as shown on the map of Tract No. 907, re- corded in book 28 pages 25 to 36, inclu- sive, of Miscellaneous Maps .° We are unable to give our opinion as to the validity or basis of this exception because of the scope of our research. However, we have sufficient knowledge to make the following comments with respect to two matters which may, although not ' necessarily, assist in expl.ainiz, the above - quoted title exception. First, the Declaration of Protective Restrictions ' provides with respect to Lettered Lots A to J, which consti- tute portions of Parcels B and D under the 1951 Lease, and Lettered Lots K to P, which are interior lots and which are not covered by the 1951 Lease, that only "band stands, comfort stations, recreational or ether structures for the use, welfare and benefit of the corr.munity and the public" ' can he constructed, i'urther, it is provided that on all lots "having Bay frontage [Lettered. Lots A to J] the struc- tures must be so erected and maintained that free access to the waters of the Bay and the Beach shall at all times be ' available to the residents of the community or the public." The deed to the City from Title Insurance and Trust Company, dated January 4, 1929, which may be the basis for ownership of these Lots by the City, conveyed Lettered Lots A to P subject to these restrictions. The phrases "the community and the public" and "the community or the public" can be ' reconciled by the fact that "the community and the public" applies to construction on Lettered Lots A to P (Lots L to P are not part: of the 1951 Lease), while "the community or the public" applies to access through Lettered Lots A to J (Lots subject to the 1951 Lease and fronting the bay). The Declaration so construed would require access ' to either the public or to all Lido Isle residents. If 1 i NoSS AMA N, WATERS, SCOT I, KRUEGER � RIORUAN ' Dennis O'Neil, Esq. July 3, 1974 Page Nineteen ' access were allowed to all Lido Isle residents, then access ' to the general public based upon the "or" contained in the Declaration would not be protected by the Declaration. This interpretation would appear to be consistent with the pur- pose of the transaction by which the City obtained title to ' Lettered Lots A to J and then leased them to the Association. According to the debates in the City Council meetings held in 1928 as set forth in the Chronology, both the City ' Council and the Association intended that these Lettered Lots be used as beaches. This purpose would appear to be fulfilled either by a lease to the Association for beach ' purposes or by opening the beaches to the public. During said debates, certain members of the City Council stressed the need for public use of the Lettered Lots. Newspaper article, probably from Newport News (August 16, 1928); Newport News (August 23, 192 . While such statements indicate an intent to create public beaches, they should logically be considered. in light of the fact that the City Council leased such Lots to the Association and that they were not, therefore, available to the general public. Newspaper article, probably from Newport News ' (September 13, 1928). Second, the Association quitclaimed the ten -foot corridors through Lettered Lots A to J (they are not the same as the utility corridors dedicated to the City by the subdivision map) by Quitclaim Deed, dated June 10, 1929. ' The City Council by Resolution No. 1781, dated April 1, 1940, however, abandoned such corr -dors. We are of the opinion that the Lease Renewal ' should contain provisions recognizing existing rights; thus modification of the quiet enjoyment covenant contained in the 1951 Lease would be required. As noted above, we recommend that routes be designated and available for fish- ery, general public recreational purposes and other uses encompassed within the trust purposes of commerce, naviga- tion and fishery. There has also been indication that an exclusive lease covering tide and submerged lands may only be entered into if that lease covers no more than a small area. In an NO.SSAMAN, WATERS, SCO'CI', KRUL(_;bR iS RIORI)AN ' Dennis O'Neil, Esq. July 3, 19711 Page Twenty ' opinion letter from the Attorney General, Cal. Ops. Atty. ' Gen. 50 72/47 IL (December 7, 1973), concerning the issue of discrimination in the leasing practices of the San Diego Unified Port District, it stated: ' "It is established that relatively small Tideland areas may be leased for pur- poses consistent with the public trust (such as a wharf or marina), even though ' the facility erected thereon is for the exclusive use of the lessee and not available Cor public use. Pacific Coast S.S. Co. v. Kimball, 1.14 Cal. TIEF 1 9 ; 23 Ops. Att'y. Gen. 97, 99 (1944). Cf., San Vicente Nursery School ' v. County of Los Angeles, 1T47 Cal. App. 2d 79." ' In 34 Cal. Ops. Atty. Gen. 4, 11 (1959), the opinion also contained a reference to the size of the lease area: ' "The courts have held such leases actually aiding commerce, navigation and fishery to be valid in a number of instances, where only a portion of the tide lands granted to the city by the State was so leased." ' In San Pedro R.R. Co. v. Hamilton, 161 Cal. 610, 621 (1911) , the Supreme Court upheld a lease involving "a mere fragment of all of the like water -front lands." It is indeed argu- able that the small parcel criterion is not a requirement for leasing; there is no California decision that has passed upon the issue as to leases. We suggest that the City observe the small parcel criterion before entering into the Lease ' Renewal., however, with due regard to the trends of authori- ties in the area. In this respect there are two cases which expressly state that the small parcel criterion is a require- ' ment as to grants of tide and submerged lands, Atwood v. Hammond, 4 Cal. 2d 31 (1935) and C_it of Lon Beach v. Mansell, 3 Cal. 3d 462 (1970)• In Mansell at page 5, the court in setting forth the limited circumstances when tidelands may be conveyed into private ownership stated: NOSSAMAN, WATI'.RS,SCOTP, KRULCLIL & RIORDAN ' Dennis O'Neil, Esq. July 3, 1974 Page Twenty -One ". . . generally speaking the reclaimed area alleged to be free from both the ' public trust and the constitutional restriction aiTainst alienation into private ownership must be, as it were, a residual product of the larger program -- ,) 'relatively small parcel' to use the languafre of' Atwood ' We have been informed by the City that the Leased Lands cover approximately 12.75 acres. In comparison to ' the lands Franted by the State to the City by the various statutory grants [1919 Statutory Grant; 192.7 Statutory Grant; Chapter 813, Statutes of 1929], which according to the State Lands Division encompass approximately + 13,518 ' acres (12,778 acres in the ocean and 740 acres in the Bay), there is substantial support for the conclusion that 12.75 acres are relatively minor in area. See Atwood v. Hammond, 4 Cal. 2d 31 (1935) involving 18 acres; City of Long Beach v. f4ansell, 3 Cal. 3d 462 (1970) involving five acres. ' The small parcel criterion must also be examined in terms of effect. County of Orange v. Heim, 30 Cal. App. 3d 694, 728 (1973)• Since the Leased Lands surrounding Lido Isle cause the Association to have control along the entire waterfront, the Lease Renewal will, accordingly, have a significant impact on any potential public use of the Lido Isle beaches and offshore. In County of Orange v. Heim, 30 ' Cal. App. 3d 694, 726 (1973), it was stated: "At the present time through County's ownership in trust of the granted tide- lands and its control over the public easement in the patented tidelands, the public has control of all of the shore- ' line of [Upper Newport Bay]. We recog- nize that, at present, access to the shoreline is limited and that the shoreline is in many places covered and uncovered by the ebb and flow of the tide limiting its utility. Neverthe- less, the public does presently control the entire shoreline, and as a result of the exchange it would be relinquishing two - thirds of the shoreline to be con- ' ve,yed into private ownership. We do I NOSSAMAN. WAT[RS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Two not believe that in formulating the 'relatively small parcel' criterion, the Mansell court meant to countenance public relinquishment of two - thirds of the shoreline of an entire bay." ' Similarly, the court in Oakland v. Oakland Water Front Co., 118 Cal. 160, 190 (1897) held that: a sale of the lands [Oakland waterfront] by parcels would no doubt have been a proper exercise of power by the municipal authorities, but a trans- fer in bulk to a private citizen, without any reservation of the right of access to the navigable waters by which the town was almost completely surrounded, was a gross and evident excess of power." 1 Although these cases involve the granting of lands rather than leasing and involve larger quantities of lands, ' we, urge that the continuing expansive trend of protecting tide and submerged lands for purposes of the public trust for commerce, navigation and fishery [Marks v. Whitney, 6 Cal. 3d 251 (1971)] strongly indicates that the City should ' consider these cases in determining the amount of lands to be leased under the Lease Renewal. We recommend in this regard that the City reduce the size of the lands described ' as Parcel A and Parcel B in the 1951 Lease by eliminating those Parcel A and Parcel B lands which are not accessible and available for use by all members of the Association for ' park or water- oriented recreational purposes. The lands which should be excluded from the Lease Renewal, as noted in paragraph 1(b) above, are presently subject to exclusive personal use and can be better administered on an individual basis. Further, the elimination of water -front control of Lido Isle by the Association will be consistent with the precepts of Oakland v. Oakland Water Front Co., 118 Cal. ' 160, 190 (1897). r It should also be emphasized that although the exclusive use of lands subject to a public trust has been 1 1 NOSSAM AN, WATERS, SCOTT, KRUEGLR v RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Three I liberally permitted in the past, the expansive nature of the public trust doctrine may now require that exclusive leases of public trust lands be subject to the condition that exclusive use be permitted only if the public cannot prac- tically use the leased lands. We understand that the lands covered by the Lease Renewal are not: in fact feasible for public use; consequently, this point; will not be discussed ' further. Before leasinE; such lands, however, we suggest that the City find that the Leased Lands are not subject to a feasible public use. See Mallon v. City of Long Beach, 44 Cal. 2d 199 (1955) and City of Long Beach v. Morse, 31 Cal. 2d 254 (1947) with respect to a city's duty as trustee to use tide and submerged lands for trust purposes of commerce, navigation and fishery. D. CONSIDERATION It has been proposed by the Association that it pay to the City an annual rental. of $3,566.18, subject to ' adjustment every five years based on this primary sum. In order for the City to enter into the Lease Renewal the rental provided for in the Lease Renewal must meet the requirements of Article XIII, Section 25 (formerly Article ' IV, Section 31) of the California Constitution prohibiting the ,ift of public funds or other things of value and of the 1919 Statutory Grant. Purther, the amount of rental the City receives must be consisten with its duties as trustee pursuant to the trust under which it holds the Leased Lands. With respect to the 1919 Statutory Grant, it is stated in the Grant: "'In the management, conduct, or I operation of said harbor or any of the utilities, structures, or appliances mentioned in paragraph (a) no discrim- ination in rates, tolls, or charges or in facilities for any use or service in connection therewith shall ever be made, authorized or permitted by said City, or by its successors." II ,1 INOSSAMAN, WATERS, SCO "CT, KRUEGER RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Four We do not here pass upon whether or not the Lease Renewal might result in a violation of the foregoing re- strictions; we have not been supplied with nor have been asked to review any information as to the rental of com- parable lands and their use. We are, however, able to suf„est basic standards which the City may wish to consider. ' First, the City may set different rental rates based upon differences in leasehold uses or types of lessees. See Live Oak W.V. Assn. v. Railroad Com., 192 Cal. 132, 143 (1923 ), (involving a distinction between landowners holding contracts with a public utility and those who did not). Second, the City's distinction among various leasehold uses and types of lessees must; be based upon a reasonable classi- fication such as the purpose or character of the use. City & County of San Prancisco v. Western Air Lines, Inc., 204 Cal. App. 2d 105, 140 19 Po Third, the City's classi- fication may be reasonable: although there is only one lessee In a class. City & County_of San Francisco v. Western Air Lines, Inc., supra. ' Article X1I1, Section 25 of the California Con- stitution prohibits the legislature from authorizing a city to make a gift of public funds or other things of value. This means with respect; to leases that "courts may well conclude that leases . at a rental charge deliber- ately set below the fair rental value of the leased property are violative of the 'gift clause' of the California Consti- tution." Cal. Ops. Atty. Gen. 50 72/47 IL (December 7, 1973)• Where, however, the lease provides for uses which 1 are (1) for a public purpose within the jurisdiction of the city and (2) for the interest and benefit generally to the public, such a lease which has a rental set at less than fair rental value will probably not violate Article XIII, Section 25. City of Oakland v. Garrison, 194 Cal. 298 (1924). Tn People v. City of Long Beach, 51 Cal. 2d 875, 883 (1959), the court, in upholding a lease of the tidelands to the Y.M.C.A. for a rental of $1.00 per year on the basis that it did not violate the gift clause of the Constitution, stated. "In the present case there is also no grant in fee or appropriation of money i NOSSAMAN, WATERS, scoTT, KRUEGER & RIORDAN 1 Dennis O'Neil, Esq. July 3, 19714 Page Twenty -Five to a private organization. The Y.M.C.A. receives only the use of the building for 25 years on condition that at all times it carries out t;he trust purposes for the ' public benefit under the supervision of the city. When it ceases to do so its rights in the building terminate. More- over, it can gain no monetary benefit from the lease. Thus, other than the goodwill that it may engender for itself, the sole benefit it will derive is the ability to 1 promote a public trust purpose that happens also to be one of its own. Under these circumstances, the public benefit that will result from the Y.M.C.A.'s operation cf the facility at its own expense is clearly sufficient consideration for the Y.M.C.A.'s use of ' the building and such incidental non - monetary benefits as it may receive." The Leased Lands are exclusively leased for the benefit of the Association and its members, and not for the benefit of the public. The Lease Renewal should, therefore, provide for a rental representing the fair rental value of the Leased Lands because the provisions of Article XIII, Section 25, as interpreted in People v. City of Long Beach, supra, do not permit otherwise. In addition to the prohibitions set forth in Article XIII, Section 25, of the California Constitution, the City has a duty under the public trust for commerce, navigation and fishery to receive a. fair rental value on lands subject to such trust. This duty is based upon the obligation of the City to use trust, property for state -wide concern and not for purely local or private benefit. Mallon v. City of Long Beach, 44 Cal. 2d 199, 210 -211 1955 Cit of Coronado v. San Diego Unified Port District, 227 Cal. App. 2d 55, 1172 (19b4). The City would thus be in breach of' its trust duties in receiving less than the fair rental value for the Leased Lands as the Association and its members would directly benefit from the lower rental without such lower rental appreciably benefiting the public. i 1 i 'v OSSAMA\, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Six This trust duty of administering such lands has been recognized by the City. According to Section 17.33.020 of the Newport Municipal Code, which regulates piers and floats, the City has the responsibility of administering tide and submerged lands in conformity with the purposes of the public trust "and with accepted standards of equity and management of public lands and resources." Prior to the ' amendment of this section on May 24, 1971, the section stated that "[t]he presence of privately owned piers and floats on and over public tide and submerged lands deprives the general public of the use of said areas for fishing, ' navigation and recreational activities, and it is in the spirit of the tidelands trust that the public be reimbursed directly for the loss of use of said areas." This policy clause was deleted in 1971, but it is still an accurate statement of the public trust imposed on the City. With respect to Chapter 3.7.33 of the Newport Municipal Code covering pier registration fees and our con- clusion set forth in paragraph 1(b) at the beginning of this opinion concerning the exclusion of certain lands from the Lease Renewal and leasing them by means of individual wharf- age leases, it should be noted that. the City by not charging a fair rental value pursuant to said Chapter for wharfage leases may be in conflict with the duties imposed upon the City by the public trust for commerce, navigation and fish- ery and the provisions of Article XIII, Section 25 of the California Constitution. The City should follow the oper- ative standard in California that the State or its grantee will charge a fair rental value for the use of tide and submerged lands. There are, however, exceptions to this standard such as the statutory exception set forth in Sec- tion 6503 of the Public Resources Code which provides that "no rental fee shall be charged [by the State Lands Commis- sion] for private recreational piers constructed for the use of a 'Littoral land owner." This section does not apply to local entities and the County Counsel of the County of Orange suggests that it may not be constitutional. See Letter of County Counsel of County of Orange, May 22, 1970, B -485, ( "it; is our conclusion that the prohibition [Section 65031 if statutorily relevant, would be unconstitutional ' under Article XIII, Section 25 "). In determining what constitutes fair rental value we urge the City to follow the practices of the State Lands I i NOSSAMAN, WATERS, sco,rT, KRUEGER & RIORDAN 1 Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Seven Commission. The State Lands Commission has jurisdiction over all tide and submerged lands Y.eld by the State and has comprehensive regulations governing; the leasing of such lands which provide generally for an annual rental of six percent (6 %) of the appraised value of lands subject to lease. California Administrative Code, Title 2, §2005• We believe that this represents a reasonable standard, although the City may wish to set a higher or lower rate provided the rental does not fall below a fair rental value. In setting the rental the City should bear in mind the criteria set out in Cal. Ops. Atty. Gen. 50 72/47 IL at 35 (December 7, 1973): ". a Legislative :rantee is not necessarily required to --ease lands for those purposes [public trust related purposes] which will return the highest ' rental or other economic return. Rather, the grantee's obligation is to adminis- ter the lands in such a way as, in its judgment, will best serve to promote the statewide public trust purposes described in the granting statute." There are two additional matters to consider in determining; the amount of rental pursuant to the Lease Renewal. The first is whether the Association's expenses in ' providing lifeguard and maintenance services for the Leased Lands should be taken into account in determining the Associ- ation's rental and the second is the existence of any con- tract obligation or any non - binding agreement giving rise to 1 a moral obligation of the City with respect to the amount of rental. 1 We doubt that the City can reduce or otherwise set the amount of rental based upon the expenses incurred by the Association. To do so may result in a gift of public funds in violation of Article XIII, Section 25 of the California Constitution. In County of Alameda v. Janssen, 16 Cal. 2d 276, 281 (1940), the court stated that: "[i]t i; well settled that, in determining; whether an appropriation of public funds or property is to be I NOSSAMAN, WATERS, SCOTT, KRUEGER �, RIORDAN 1 Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Eight considered a gift, the primary question is whether the funds are to be used for a 'public' or a 'private' purpose. If they are for a 'public purpose', they 1 are not a gift within the meaning of [Article 13, §251. [Citations omitted.] The benefit to the state from an expen- diture for a 'public purpose' is in the nature of consideration and the funds expended are therefore net a gift even though private persons are benefited ' therefrom." See City of Oakland v. Garrison, 194 Cal. 298, 3 024); County of Alameda v. Janssen, 16 Cal. 1 2d 27 , 282 (1940). The Association's expenditures are primarily undertaken to benefit members of the Association who have ' the exclusive use of the Leased Lands. Although the public may indirectly benefit from the maintenance and beautifica- tion of the Leased Lands, the factual situation would sug- gest that this indirect benefit, should not be sufficient to justify a reduction in the amount of rental. Se( People v. ., Cite of Lon Beach, 51 Cal. 2d 875, 881 (1959), . . a grant in aid to a priva.tc organization is a 'gift' to and 'for the purpose and benefit of such organization within the meaning of the constitutional provisions even though the organization is thereby enabled to promote some public purpose. "). Second, we are of the opinion that there is no contractual or moral obligation which would justify a rental lower than the fair rental value of the Leased Lands. After reviewing those documents listed in the Chronology which the City has provided us, we have been unable to find any writ- ten contractual obligation or any non- binding agreement which would S,ive rise to a moral obligation on the part of the City which would justify leasing the Leased Lands, or any part of them, at less than their fair value. (See discussion below.) Even if there were a moral obligation, such an obligation, if Honored by the City, in our judgment would result in a breach of Article XIII, Section 25 of the California Constitution as a gift of public funds in the I r� it N0SSAMAN, WATLKS, SCOTT, KRUh.CLR A AIORUAN 1 Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Nine I event the City acted on such obligation. See Veterans' Wel- fare Board v. Riley, 189 Cal. 159, 170 (1922), (the court stated that its "decisions consistently hold that an appropriation of puhl.ic funds based upon a moral obligation as a considerat -i.on is a gift within the meaning of the Con- stitution . . . . "). 1 '.Ph(, alle(;ed basis for such a contractual or moral obligation is .founded upon the events occurring as part of the 1929 -1931 transaction whereby the City obtained title to Lettered Lots A -J would obligate the City to lease the Leased Lands for less than the :fair rental value. (See comment of John P. Elsbach, Chronology P. 32, that the Association was to have a perpetual lease in the nature of a continual renewal of the 1929 leases.) During the course of our investigation into these events, we have been unable to find any facts which would support the contention that the ' City should receive less than fair rental value for the Leased Lands. The 1929 -1931 transaction appears to have occurred because the City Council would not approve the subdivision map of Lido Isle uni;ii an arrangement had been made to pre- serve certain Lettered Lots as beaches. Newport News, (August 23, 1928). In order to preserve the Lettered Lots, they were deeded to the City and leased to the Association subject to use restrictions. (See Agreement dated Septem- ber 14, 1928, between the City and Title Insurance and Trust Company, executed by the City only; a summary of which is contained in the Chronology.) ' No obligation to renew the leases in perpetuity could have existed because (a) the leases were for a primary term o£ 25 years with an option to extend for an additional 25 ,years and (b) the City could not have bound itself to lease for longer than 50 years because of restrictions to this effect contained in the 1929 Statutory Grant. Epstein v. Zahloute, 99 Cal. App. 2d 738 (1913)• Thus, any obli- gation would terminate at the end of 50 years both because of the agreement and as a matter of law. Moreover, it I appears that the 1929 leases were terminated by the City in 1933 because the Association defaulted in payment of rental. Resolution No. 792 of the City Council (June 5, 1933)• I NOSS AMA N, WATERS, SCOOT, KRUEGER N RIORDAN 1 Dennis O'Neil, Esq. July 3, 1974 Page Thirty Based upon the 1929 Leases, the City was never obligated for a period longer than 50 years and any obligations contained therein terminated upon termination of the 1929 Leases in 1933. In any event, the 1929 -1931 transaction involved only approximately one -third of the Leased Lands; thus, the trans- action would not necessarily be relevant in determining the amount of rental for lands not subject to the 1929 Leases. In addition, the rental proposed by the Associa- tion for the Lease Renewal does not appear to be supported by the rental contained in the 1929 Leases. According to the Association in its letter to the City, dated October 4, 1973, the rental set forth in the Lease Renewal represents an adjustment in the rental contained in the 1951 Lease based upon the increase in property values from 1951. The 1951 Lease contains the same rental as contained in a 1938 Lease which, except for one parcel, covered the same lands as proposed in the Lease Renewal. A comparison of the rental and rental per acre of the 1929 Leases, the 1951 Lease and the Lease Renewal is provided by the following table. RENTAL RENTAL PER ACRE 1929 Leases $ 995.00 $ 248.75 (4 acres) ' 1951 Lease $ 750.00 $ 60.24 (12.45 acres) Lease Renewal $ 3,566.18 $ 286.44 (12.45 acres) As shown on the table, the 1929 Leases provided for a higher rental and a higher rental per acre than the 1951 Lease. If rental for the Leased Lands were to increase as property values Increase, as proposed by the Association, the base rental as contained in the 1951 Lease does not appear to be the appro- priate base rent. We recommend that the City determine the consideration to be paid in the lease based upon current fair Imarket and rental values. I NOSSA MAN, WATERS, SCOTT, KRUEGER �, RIORDAN ' Section 2'7400 of the Public Resources Code pro- vides that after February 1, 19'73, "any person wishing to perform any development within the permit area shall obtain a permit authorizing such development from the regional commission . . . ." "Development" is defined in §27103 of the Public Resources Code as meaning: ". . . on land, in or under water, the placement or erection of any solid mate - 1 rial or structure; discharge or disposal of any dredged material or of any gaseous, liquid, solid, or thermal waste; grading, ' removing, dredging, mining, or extraction of any materials; change in the density or intensity of use of land, including, but not limited to, subdivision of land }pursuant to the Subdivision Map Act and any other division of land, including lot :splits; change in the intensity of use of water, ecology related thereto, or of access thereto; construction, reconstruc- tion, demolition, or alteration of the size of any structure, including any facil- ity of any private, public, or municipal utility, and the removal or logging of major vegetation ." I 1 I Dennis O'Neil, Esq. r July 3, 1974 Page Thirty -One Based upon our review of the facts and applicable r law there appears to be no justification for the City to receive less than the fair rental value for any of the Leased Lands. r 1 II CALIFORNIA COASTAL ZONE CONSERVATION ACT OF 1972 (§ §27000 et ate. of the Public Resources Code) ' Section 2'7400 of the Public Resources Code pro- vides that after February 1, 19'73, "any person wishing to perform any development within the permit area shall obtain a permit authorizing such development from the regional commission . . . ." "Development" is defined in §27103 of the Public Resources Code as meaning: ". . . on land, in or under water, the placement or erection of any solid mate - 1 rial or structure; discharge or disposal of any dredged material or of any gaseous, liquid, solid, or thermal waste; grading, ' removing, dredging, mining, or extraction of any materials; change in the density or intensity of use of land, including, but not limited to, subdivision of land }pursuant to the Subdivision Map Act and any other division of land, including lot :splits; change in the intensity of use of water, ecology related thereto, or of access thereto; construction, reconstruc- tion, demolition, or alteration of the size of any structure, including any facil- ity of any private, public, or municipal utility, and the removal or logging of major vegetation ." I 1 I NO SAMAN, WATERS, SCOTT, KRUECER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirty -Two With respect to determining whether an activity constitutes a "development ", Cal. Ops. Atty. Gen. 50 73/11 (Feb. 22, 1973), which reviewed the applicability of the Coastal Act to oil field operations, stated that: ". . . it would appear the question should be resolved by determining whether the activity requires the development of new or additional coastal zone resources or intensifies or substantially changes the present use of such resources." ' The Lease Renewal incorporates the uses listed in the 1951 Lease and there will not be any new or additional I use or intensification of use of coastal zone resources pro- vided for by the Lease Renewal. In another sense, however, the Lease Renewal may be subject to the Act on the basis that there will be an additional use or a change in use ' because the Lease Renewal will extend the effect of the 1951 Lease. I Because the Coastal Zone Conservation Act is of recent origin and because there is sufficient uncertainty as to whether the Lease Renewal is subject to the Coastal Zone Conservation Act's permit jurisdiction, we recommend that the City file for an exemption from the Coastal Act with the South Coast Regional Commission which could then request an opinion from the Attorney General on this matter. Alter- natively, the City could ask the State Senator or Assembly- man representing the City to request an opinion directly from the Attorney General. If the opinion were that the Lease Renewal was exempt from the Act, the Regional Com- mission would probably grant an exemption. However, if the opinion were that a permit was required, the City would need to obtain favorable action of the Commission (and the State Commission if the matter were appealed) by a two - thirds vote. It should be noted that any additional use of or construction on the Leased Lands may be subject to the Coastal Zone Conservation Act. NOSSAMAN, WATERS, SC<.1T, KRUEGIIR & RIORDAN 1 Dennis O'Neil, Esq. July 3, 1974 Page Thirty -Three III CAi,if,0RN1:A ENVIRONMENTAL QUALITY ACT OF 1970 1 (§ §21000 et sue. of the Putlic Resources Code) ' Pursuant to Section 21151 of the Public Resources Code, "[a]i.l local aencies shall prepare, or cause to be prepared . . . an environmental impact report on any project I they intend to carry out or approve which may have a signifi- cant effect on the environment." A city council is char- acterizable as a local agency for purposes of the Environmental Quality Act. §15031 of the Administrative Code; see §21062 of the Public Resources Code; Friends of Mammoth v. Board of Supervisors of Mono County, 8 Cal. 3d 247 (1972 ) which involved a board of supervisors. Public Resources Code Section 21065 defines "project" for purposes of the Environ- mental Quality Act to mean activities involving the issuance to a person of a lease. The Lease Renewal is subject to the requirements of the Environmental Quality Act on the basis that it is in 1 fact a lease. Smith v. Arthur D. :�ittle Inc., 276 Cal. App. 2d 391, 401 (1969). To satisfy the requirements of the Act, the Newport City Council may consider preparing a Negative Declaration, in accordance with Title 14, Section 15083 of the California Administrative Code. This section provides that art envircnmental impact statement is not required if the City Council finds, based on an Initial Study, that a project will not have a significant effect on the environment. If the City Council so finds, a Negative Declaration would be art appropriate procedure to follow in satisfyin; the requirements of the Environmental Quality Act. It should be noted that any additional use of or construction on the Leased Lands may be subject to the Environmental Quality Act. I i I NOSSAMAN, WATLRS, SCOTT, KRUE GER N RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirty -Four 11 IV To summarize the points made in this letter: (1) The City has authority to enter into the Lease Renewal with the Association subject to certain con- ditions; 1 (2) The Lease Renewal. must limit the uses of the leased tidelands to those uses which are consistent with the tideland trust for commerce, navigation and fishery; (3) The City should assume for the purposes of the lease that all of the Leased Lands are subject to the tideland trust because this will avoid the expense of an extensive engineering study to qualify and quantify the various types of lands and comply with applicable case and statutory authorities which may impose restrictions on the non - tideland portions of the Leased Lands. (4) It is advisable to find that the Leased Lands cannot be used for public purposes (assuming that to be the fact). (5) The lease may provide for the exclusive use of the Leased Lands except: (a) Rights reserved in the 1919 Statutory 1 Grant; (b) Reasonable access routes for the public; and I(c) Any rights or interests disclosed in a current title report; (6) The [:,cased Lands should be relatively small both in area and in effect. To this end, the City should 1 climinat(� from the Leased Lands those areas which are not available to ull members of the Association. The lands so excluded could be leased on an individual basis. I I Respectf ly submitted, Robert B. Kruege� of NOSSAMAN, WATERS, SCOTT KRUEGER & RIORDAN I I H I I I I I NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirty -Five (7) The Leased Lands sho• -ild be leased at the cur- rent fair rental value without deduction for the Association's maintenance expenses and without deduction for any alleged moral obligation. (8) The California Coastal Zone Conservation Act may apply, and the 17nvironmental Quality Act does apply, to the proposed Lease. We trust the foregoing; answers your preliminary inquiry on the subject. If you have any questions or desire any further advice on any point, please let us know. Respectf ly submitted, Robert B. Kruege� of NOSSAMAN, WATERS, SCOTT KRUEGER & RIORDAN I I H I I I I I See Contract File for Exhibit "A" (Map Showing Area Leased to Lido Isle Association) I [1 I I I Date IOctober 16, 1897 I July, 25, 1919 I I II i I I 1 I I �I I EXHIBIT B CHRONOLOGY Event By a patent, for swamp and overflow lands, dated October 16, 1897, a portion of Lido Isle was conveyed by the State of California to James McFadden. Chapter 494, Statutes of 1919 (hereinafter referred to as 111919 Statutory Grant "), which granted tide and submerged lands within the boundaries of the City of Newport Bay (hereinafter referred to as "City ") to the City, became effective on July 25, 1919. The 1919 Statutory Grant provided: "SECTION I. There is hereby granted to the city of Newport Beach, a municipal corporation of the State of California, and to its successors, all of the right, title and interest of the State of California held by said state by virtue of its sovereignty, in and to all that portion of the tidelands and submerged lands within the present boundaries of said city, and situated below the line of mean high tide of the Pacific ocean which border upon and are in front of the upland now owned by said I LI (b) Said harbor shall be improved by said city without expense to the state and shall always remain a public harbor, for city and such other upland as it may hereafter acquire, to be forever held by said city, and by its successors in trust for the uses and purposes and upon the express conditions following to wit: (a) Said lands shall be used I by said city and by its successors solely for the establishment, improvement, and conduct of a harbor and for the establishment and construction of bulkheads or breakwaters for the protection of lands within its boundaries, or for the protection of its harbor, and for the construction, maintenance and operation thereon of wharves, docks, pie-s, slips, quays, ways and streets, and other utilities, structures and appliances necessary or convenient for the promotion or accomodation of commerce and navi- gation, and the protection of the lands within said city. And said city or its successors shall not at any time grant, convey, give or alien said lands or any part thereof 1 to any individual, firm, or corpora- tion for <.ny purposes whatever; provided, that said city or its successors may grant franchises thereon for a period not exceeding twenty -five years for wharves and other public uses and purposes, and may lease said lands or any part thereof for a period not exceeding twenty -five years for purposes I consistent with the trust upon which said lands are held by the State of California and with the requirements of commerce or navi- gation at said harbor. (b) Said harbor shall be improved by said city without expense to the state and shall always remain a public harbor, for I all purposes of commerce and naviga- tion, and the State of California shall have at all times the right to use, without charge, all wharves, docks, piers, slips, quays, and other improvements constructed on said lands or any part thereof for any vessel or other water craft or railroad owned or operated by the State of California. (c) In the management, conduct or operation of said harbor, or of any of the utilities, structures or appliances mentioned in paragraph (a) no discrimination in rates, tolls or charges, or in facilities for any use or service in connection therewith shall ever be made, authorized or permitted by said city, or by its successors. The absolute right to fish in the waters of said harbor with the right of convenient access to said water over said lands for said purpose is hereby reserved to the people of the State of California." 1923 W. K. Parkinson acquired Lido Isle in .1923 and commenced dredging a portion of Newport Bay and filling lands in and adjacent to Lido Isle in order to create a residential- commercial development on Lido Isle. [The Register, January 25, 1973.7 1927 Lido Isle was sold to William Clark Crittenden in 1927 who, together with rea.1 estate developer John P. Elsbach, planned to develop Lido 'isle into a I 1 community patterned after Venice, Italy. As part of the sale, Title Insurance and Trust Company (hereinafter referred to as "T.I. ") became the holder of the legal title in trust of Lido Isle. ' July 29 1927 Chapter 70, Statutes of 1927 (hereinafter referred to as "1927 Statutory Grant "), which granted certain tide and submerged lands within Newport Bay to the City becarie effective on July 29, 1927• The 1927 Statutory Grant provided: "There is hereby granted to the city of Newport Beach, a municipal corporation of the State of California, and to its successors, all of the right, title and interest of the State of California held by said state by virtue of its sovereignty, in and to all of the tidelands and submerged lands bordering upon, in, and under Newport bay, situated below the line of mean high tide of the PacifLC ocean not heretofore granted to said city or to the county of Orange, to be forever held by the city of Newport Beach and by its successors in trust for the uses and purposes and upon the express conditions following, to wit: (a) Said lands shall be used by said city and by its successors solely for the establishment, improvement and conduct of a harbor and for the establishment and construction of bulkheads or breakwaters for the protection of lands within its bounaaries, or for the protection 4. I 11 of its harbor, and for the construction, maintenance, and operation thereon of wharves, docks, piers, slips, quays, ways and streets, and other utilities, structures and appliances necessary or convenient for the promotion or accommodation of commerce and navigation, and for the protection of the lands within said city. And said city or its successors shall not at any time grant, convey, give or alien said lands or any part thereof to any individual, firm, or corporation, ' for any purpose whatever; provided, that said pity or its successors may grant franchises thereon for a period not exceeding twenty -five ' years for wharves, and other public uses and purposes, and may lease said lands or any part thereof for limited. periods, in any event not to exceed twenty -five years for any and all purposes which shall not interfere with commerce or navigation, and are not inconsistent with the trusts upon which said lands are held by the State of California or with the requirements of commerce or navigation at said harbor. (b) Said harbor shall be improved by said city without expense to the state and shall always remain a public harbor for all purposes of commerce and navi- gation, and the State of California shall have at all times the right to use, without charge, all wharves, docks, piers, slips, quays and other improvement constructed on said lands or any part thereof for ' any vessel or other water craft or railroad owned or operated by the State of California. (c) In the management, conduct, or operation of said harbor or any I 11 U- of the utilities, structures, or appliances mentioned in paragraph (a) no discrimination in rates, tolls, or charges or in facilities for any use or service in connection therewith shall ever be made, authorized or permitted by said city, or by its successors. The absolute right to fish in the waters of said harbor with the right of convenient access to said water over said lands for said purpose is hereby reserved to the people of the State of California." May 25, 1928 In a judgment, dated May 25, 1928, by the Superior Court of the State of ' County California in and for the of Orange in City of Newport Beach v. Title Insurance and Trust Company (Case No. 23689), the "lane of ordinary high tide of the Pacific Ocean in Newport Bay" ' (hereinafter referred to as "Decree Line ") was set around Lido Isle. The judgment of the court stated that lands landward of the decree line "belong to defendant Title Insurance & Trust Company" and that the lands bayward of the decree line were "tidelands and submerged lands and that the City of Newport Beach is the owner of said I 1 1 7. tidelands and submerged lands under and by virtue of the provisions of the [1927 Grant]." As of Statutory a result ' Chapter 142, Statutes 1929, effective Aufrust 14, 1929, the Decree Line, together with lines set by other cases, was "established and declared to be the line high tide in those of ordinary portions of Newport bay and the arms thereof set forth in said decrees, and it is hereby further declared that the grants of tidelands heretofore made by the State of,' Californira to the city of Newport Beach included all tidelands whether filled or unfilled bordering said line of ordinary high tide above described and said grants are hereby confirmed upon the same conditions and for the s•amc uses as in sad grants specified." August 1928 (a) The subdivision map for the development of Lido Isle, which was submitted for final approval, was discussed in August 1928 by the City Council. The 1 1 7. I1 primary issue reviewed in connection with approval was whether six street ends (contiguous to the bay) would be dedicated to public use by the developer. At one session of the Council held in I i August 1928, the debate was summarized as follows: "City Engineer Patterson, after examining the map presented, said he understood certain street ends were to be dedicated to the city, but Conzelman [architect in charge of Lido Isle] stated that the present plans provided for using these as community centers for the Island owners. Patterson insisted that the city should have access to the water while Conzelman contended this could be done by granting easements to care for installation of public utilities. "Mayor Johnson then wanted to know what became of the first map presented to the board and in which the statement was made that there would be more public beach on Lido Isle than in all of Newport and Balboa. "Councilman Claire said that six street ends had been promised, that access to the water was impor- that if the city later had tant and I i I " ^he council feels that the public should not be denied the beaches, which, they say, are being all too rapidly absorbed by private interests." [Newport News, dated August 23, 1928 ' September 7, 1928 (a) The subdivision map was approved by the City Council on September 7, 1928, as the result of the following Icompromise: 1 9. to condemn street ends it would be expensive." [Newspaper article, probably from the Newport News, dated August 16, 1.928 (b) At another meeting of the City Council held in August 1928, the debate was summari2ed as follows: "Considerable discussion has been indulged over the acceptance of the Lido map by the city council, which insists that at least six street ends be dedicated to the public. At a special meeting of the council ;Monday night, the map was again held up until the changes as asked by the council had been made. "The position of the develop- ers has been that the entire beach should belong to the Community association and that the street ends should be left as beach rather ' than paved and therefore not acces- sible to the public, claiming this exclusive feature would aid in ' making the Isle the distinctive project; desired. " ^he council feels that the public should not be denied the beaches, which, they say, are being all too rapidly absorbed by private interests." [Newport News, dated August 23, 1928 ' September 7, 1928 (a) The subdivision map was approved by the City Council on September 7, 1928, as the result of the following Icompromise: 1 9. 17 ' "Lots at end of each street will be deeded to the city, also some lots in the center of the Isle, which it is planned to plant ' with shrubbery. The Lido Isle association wish to control the plantin@; so that a uniform appear- ance may be had. In return for deeded property, the city agrees to lease the Isle to the developers ' over a period of fifty ,years at a rental of $1002 per year. The power to end the lease at any time if provisions are broken, will rest ' with the council." [Newspaper article, probably from the Newport iiews, dated September 13, 192 (b) The subdivision map that was ' approved, Map of Tract No. 907, recorded in Book 23, Pages 25 to 36, of Miscel- laneous Baps in the Official Records of ' the County of Orange (hereinafter referred "), to as "Subdivision Map contained a ' certificate executed by T.I. which stated. ' "Pie hereby certify that we are the owners of, or interested in the land included within the subdivision ' shown on the annexed map and that we are the only persons whose consent is necessary to pass a clear title to said land and we 1 consent to the making of said map and subdivision as shown within the colored boarderline and hereby ' dedicate to the public use all L 10. I 1 Vias, Stradas, Piazzas, Avenue and Alleys shown on said map within said subdivision and grant and dedicate to the City of Newport Beach Easements over those strips and parcels of land delineated on ' said map and designated thereon for storm dra:_nage and public utility purposes." ' The Subdivision Map also contained a certificate executed by the City Clerk ' stating that the City Council ( "Board of ' Trustees ") app ^oved on September 7, 1928 and "accepted on behalf of the public ' for highway purposes the Vias, Stradas, Piazzas, Avenue and Alleys shown upon said map and therein offered for dedica- tion as public highways ". The Subdivi- sion Map contained designations of those ' areas classified as Vias, Stradas, Piazzas, Avenue or Alleys. The Subdivi- sion Map also depicted sixteen lettered ' lots, lots which were designated by the letters A ;o I'. Lettered Lots A to J were located, at intervals around Lido Isle, adjacent: to Newport Bay, with Lots ' A and I consisting of several lots 1 1 11. ,i ' connected by promenades running along the bay. Lettered Lots K to P were ' interior lots generally located in the ' Piazzas; it was planned that these interior lots would contain shrubbery. ' Lettered Lots A to J were shown on the Subdivision Map as subject to four -foot ' "to wide easements the City of Newport ' Beach for storm drain purposes, and public utilities." These four -foot corridors extended through the center of each of the Lettered Lots A to J in a direction toward the bay. The prome- nades of Lots .A to I were also shown as subject to easements for public utilities. ' Lots A to J were not designated as "Vias," "Stradas," "Piazzas," "Avenue" "Alleys" Map. or on the Subdivision September 14, 1.928 In an Agreement, dated September 14, 1928 (also dated September 7, 1928) ' between T. =. and the City, executed only by the City, it was agreed that: ' " . upon the recordation of said sub - division map and of the said 12. I 11 1 1 December 10, 1928 LJ 1 1 i1 1 Declaration of Protective Restric- tions, Conditions and Reservations, [T.I.] will grant and convey to [ City] the said lots bearing letters A to P both inclusive, by a Grant Deed or, Deeds . . . and that said [City] does hereby agree to accept said property and simultaneously therewith to enter into leases covering each of the said lots with the Lido Isle Community Association A recital clause in this Agreement stated that the leases were to be "for a period of twenty -five years with the option to extend the period for an additional twenty -five years . . . ." The Declaration of Protective Restrictions, dated November 20, 1928, by T.I. with respect. to Lido Isle was recorded on December 10, 1928 in Book 228, pages 1 et sec., in the Official Records of the County of Orange. The Declaration provided for a "Zone 10,11 which con- sisted of "Lots numbered 'A' to 'P' both inclusive: heretofore [emphasis added] deeded to the City of Newport Beach." With respect to uses within Zone 0, the Declaration provided that: 13. I 1 1 "Setbacks. "No structure shall be erected over any easements reserved to the City of Newport Beach in the map of record." January 1+, 1929 By a Corporation Grant Deed, dated 1 January 4, 1929, T.I. granted the City Lettered Lots A to P, "[s]ubject to 1 easements, conditions, restrictions and rights -of -way of record" (hereinafter 1 referred to as "Lettered Lot Deed "). The Lettered Lct Deed was accepted by 1 the City Council on May 20, 1929, and a 1 copy of the deed was recorded on May 22, 1929, in BoDk 281, page 108, in the 1 Official Records of the County of Orange. 1 January 10, 1929 By a letter from T.I. to Orange County Title Company (hereinafter referred to 1 'i 4. i "No structures shall be erected 1 in this zone except band stands, comfort stations, recreational 1 structures or other structures for the use, welfare and benefit of the community and the public, and on all such lots or building sites 1 having Hay frontage the structures must be so erected and maintained that free access to the waters of the Bay anc the Beach shall at all 1 times be available to the residents of the community or the public. 1 "Setbacks. "No structure shall be erected over any easements reserved to the City of Newport Beach in the map of record." January 1+, 1929 By a Corporation Grant Deed, dated 1 January 4, 1929, T.I. granted the City Lettered Lots A to P, "[s]ubject to 1 easements, conditions, restrictions and rights -of -way of record" (hereinafter 1 referred to as "Lettered Lot Deed "). The Lettered Lct Deed was accepted by 1 the City Council on May 20, 1929, and a 1 copy of the deed was recorded on May 22, 1929, in BoDk 281, page 108, in the 1 Official Records of the County of Orange. 1 January 10, 1929 By a letter from T.I. to Orange County Title Company (hereinafter referred to 1 'i 4. i I ' as "Orange Title "), dated January 16, ' 1929, the Lettered Lot Deed was trans- mitted with the instructions that "[y]ou are authorized to record this Deed, accepted by the City of Newport Beach, ' when you can deliver to us executed Leases on each [of the Lots A to P]." March 4, 1929 (a) By sixteen leases, dated March 4, 1929, executed by the City and the Lido Isle Community Association (hereinafter referred to as "Association "), the City agreed to lease to the Association Lettered Lots A to P. ('b) The Lease for Lot, A, which is illustrative of the other fifteen leases, provided that Lot A was leased to the Association "subject to easements, ' conditions, restrictions and rights -of- way of record, together with any accretions that may now be attached or shall hereafter ' attach themselves to said property, to the line of ordinary high tide of the Pacific Ocean, wheresoever the same may tI 15. U 16. be located in front of said Lot 'A'." The term of the Lease was twenty -five iyears and al. tLe option of the Associ- ation the term could be extended for an additional twenty -five years. The Lease further provided that the Association "may, but it is not required to do so, erect upon said demised premises at its 1 own expense, any building or buildings, comfort stations, boat landings, floats, or may abut wharves and piers to said property, and ;generally to develop and improve said property as may in its discretion, from time to time be deemed advisable." Another term of the lease stated that, the City had the "right of ingress and egress to, from and over ' said premises for any purposes which it may require in case of public peril or the necessity in the performance of duties required by it as a municipal corporation. . . ." The rental for the lease of Lot A was $200.00 per year. U 16. The rental for the Lettered Lots varied; for example, the rental for Lots K to P, the .interior lots, was set at $1.00 per year per, lot. June 10, 1929 (a) By a Quitclaim Deed, dated June 10, 1929, accepted by the City Council on June 10, 1929 and again on May 25, 1931 and recorded on June 2, 1931 in Book_ 479, in the Official Records of the County of Orange, the Association quitclaimed to the City property which consisted of a ten -foot wide corridor through each of the Lettered Lots A to J, which corridors ran from the Vias to the exterior line of Tract No. 907 and additional corridors running along the promenades and smaller lots of Lots A and 1. The ten -foot wide corridors did riot, appear to overlap with the four - foot wide corridors which were dedicated to the City by the Subdivision Map for purposes of drainage and public utilities. 17. I 1 1 (b) In a memorandum, undated, found in the files of the City, it is ' stated with respect to this conveyance by the Association that: "Those 16 parcels of land were quit- claimed to the city for the purpose of constructing public improvements under the 1911 Street, Improvement Act. The quit -claim 1 deed was accepted by minute resolu- tion of the City Council on June 10, 1929, and the Public Ways [emphasis added] were named in the Resolution of Acceptances. The quit claim deed was recorded January I 3rd, 1931 in Book 479, page 469, Official Records of Orange County. In this connection, a Minute Reso -- lution was passed by the City 1 Council on May 25, 1931 accepting the quit claim deed but not naming the Public Ways." June 10, 1929 (a) B; a Deed of Confirmation, dated June 19, 1929, accepted by the City Counci'L or, June 10, 1929 and recorded 1 February 26, 1930 in Book 361, page 113, in the Official. Records of the County of Orange, T.I. confirmed the dedication of easements to the City for purposes of 1 drainage and public utilities by virtue of the recordation of the Subdivision Map. i 1 I I I LI I I I I I I I I I F (b) By a Deed of Easement for Street Purposes, dated June 10, 1929, accepted by the City Council on June 10, 1929 and recorded February 26, 1930 in Hook 361, page 110, in the Official Records of the County of Orange, T.I. granted an easement for street purposes to the City. In a memorandum, undated, found in the riles of the City, it is stated that this easement deed "covers parcels . . . which were used for con- struction of approach to Lido Isle and water pipe line." (c) By a Quitclaim Deed, dated June 10, 1929, accepted by the City Council on June 10, 1929 and recorded February 26, 1930 in Book 361, page 111, in the Official Records of the County of Orange, TA. quitclaimed to the City small corridors, between ten to twelve feet in width, between the exterior boundary of Lettered Lots F, H, I and J and the United States Bulkhead Line. 11) 19. I �_l I_ a memorandum, undated, found in the files of the City, it is stated with respect to this quitclaim deed that the deed covered four parcels which were "for the construction of pleasure piers on the northerly [side] of Lido Isle." August 14, 1929 Chapter 574, Statutes of 1929, amending the 1919 Statutory Grant and the 1927 Statutory Grant, became effective on August 14, 1929. "SECTION 1. The city of Newport Beach, and its successors, I is hereby authorized to grant fran- chises for a period not exceeding fifty years for wharves and other public uses and purposes, and to lease for a period not exceeding fifty years for purposes consistent with the `,rust upon which tidelands are held by the State of California and with the requirements of commerce or navigation, upon, or of, all, or any part of, the tidelands heretofore I granted to the city of Newport Beach under the provisions of an act entitled 'An act granting certain tidelands and submerged lands of the State of California to the city of ;Newport Beach, upon certain trusts and conditions,' approved :Nlay 25, 1919, and under the provisions of an act entitled 'An act granting certain tidelands and submerged lands of the State of I r 20. I I I LI I I I July 18,1930 California to the city of Newport Beach upon certain trusts and con - ditions,' approved April 5, 1927, any limitation of the period of years of such franchises and leases, contained in either of said acts, to the contrary notwithstanding." In a letter from Orange Title to T.I., dated July 18, 1930, orange Title stated that, after reviewing their files, it found the Lettered Lot Deed, executed by T.I., arid because of the existence of thi:; deed, it requested instructions from '1. 1. October 18 1930 In a letter from T.I. to Orange Title, dated October 18, 1930, it was stated that T.I. had been informed that the City was prepared to complete the escrow and deposit with Orange Title certain IMay 18, 1931 I I I leases. In a letter from T.I. to Orange Title, dated Piay 18, __931, the following infor- mation was set forth: "The above order number re- lates to an escrow started by this Company to cover our Deed to the City of Newport Beach for Lots 'A' I o 'P' inclusive, of Tract No. 907, 21. .1 .1 Lettered Lot Deed that it was "authorized to record this Deed . . . when you can deliver to us executed Lease [sic] on each of the [Lettered Lots]." flay 25, 1931 The City Coancil accepted, for the second time, the Lettered Lot Deed. ' June 6, 1931 By a letter from Orange Title to T.I., dated June 6, 1933, the sixteen leases covering the Lettered Lots were trans- 1 rutted since escrow had closed. As part of the close of escrow, the Lettered Lot Deed was recorded on June 6, 1931, in I 1 22. Lido Isle, a part of said escrow being the return to us of leases executed by the City of Newport Beach and the Lido Isle Community 1 Association. This escrow was started in January, 1929 but has never been completed." May 21, 1931 By letter from Orange Title to T.I., dated May 21, 1931, Orange Title advised T.I. that Orange Title had possession of the leases covering the Lettered Lots. 1 May 22, 1931 In a letter of instruction from T.I. to Orange Title, dated May 22, 1931, Orange Title was instructed with respect to the Lettered Lot Deed that it was "authorized to record this Deed . . . when you can deliver to us executed Lease [sic] on each of the [Lettered Lots]." flay 25, 1931 The City Coancil accepted, for the second time, the Lettered Lot Deed. ' June 6, 1931 By a letter from Orange Title to T.I., dated June 6, 1933, the sixteen leases covering the Lettered Lots were trans- 1 rutted since escrow had closed. As part of the close of escrow, the Lettered Lot Deed was recorded on June 6, 1931, in I 1 22. IBook 487, page 180, in the Official "WHEREAS, the Lido Isle Com- munit,,, Association has offered to release to the City of Newport R'Pach all of its right, title and interest in and to the property cnverr,d by said Agreements of Lease, in order that the same may r, J Records of ;he County of Orange. No. the City Council June 5, 1933 By Resolution 794 on June 5, 1933, resolved: "That upon the Lido Isle Com- munity Association, a California corporation, quitclaiming to the City of Newport Beach all of its ril;ht, title and interest in and to all that certain real property hereinafter described, that said Agreements of Lease [covering the Lettered Lots], from and after the acceptance of said Quitclaim Deed by the City of Newport Beach, shall be terminated and declared of no further force or effect for any purpose whatever " ■ The recital clauses in the Resolution j stated: 'WHEREAS, the Lido Isle Community Association has wholly failed to pay any of the rents in said Agreements of Lease provided for, and has not paid any part or portion thereof, and are now wholly in default under the terms and conditions of said ' Agreements of Lease; and "WHEREAS, the Lido Isle Com- munit,,, Association has offered to release to the City of Newport R'Pach all of its right, title and interest in and to the property cnverr,d by said Agreements of Lease, in order that the same may r, J I1 I J Aug st 24, 1934 I i I I November 42 1933 I I L 1 be terminated and declared of no further force or effect for any purpose whatever." In a memorandum, undated, found in the files of the City of Newport, it was stated: "Quit; Claim Deed dated August 24, 1934 from the Title Insurance and Trust Company to the City of Newport Beach and accepted by the City Council on October 29, 1934. This covers parcels A, E and F which are tide lands on the north side of Lido Isle and between the westerly end of Lido Isle and the main land. This property was secured by the city in connection with the harbor improvements of 1934. The total cost of the property was $7,000. Of this amount the Griffith Company paid $2,500.11 In a letter, dated November 4, 1933, from the Association to the City Council, the Association applied to the City "for a lease on all the tidelands, submerged lands, swamp and overflow lands and abutting uplands [in the Lido Isle area described in the form of lease attached to the letter]." 24. I dovember 21, 1938 By a letter, dated November 21, 1938, a revised form of lease was transmitted to ' the City by the Association. December 5, 1938 An Agreement of Lease, dated December 5, 1938, was executed by the City and the IAssociation (hereinafter referred to as "1938 Lease "). (a) The lands covered by the 1938 1 Lease were divided into five lettered parcels. Parcel A consisted of "[a]11 those certain tide lands, submerged lands, swamp and over -flow lands in Newport Bay," which were lands surround- ing Lido Is -_e ten feet in width "parallel to and adjacent to and bayward of the United States Government Bulkhead Lines;" a large portion of these lands were located ' bayward of the Decree Line. Parcel B contained "those certain uplands abut - tiny on tidelands, submerged lands, swamp and overflow Lands, as described in Parcel 'A' ", which consisted of a ;tr.ip of land approximately 50 feet wide I I I .I I 1 I I J I I I I adjacent to and landward of the Bulkhead Line running parallel to Lido Channel and of Lettered Lots A, E, F, G, H, I and J. Excepted from Parcel B were "all easements for public utilities, street ligntinFg, storm drains and public ways opened or dedicated for public purposes as of records." According to a map, dated September 25, 1927, of Leeds and Barnard, Consulting Engineers, showing the "Property of Title Insurance and Trust Company," the 50 -foot wide strip of land was located bayward of the "Line of rill." The map indicates that Lettered Lots E and F were located bayward of the survey line of the State swamp and overflow patent of 1897. Parcel C consisted of "[ajll those certain tidelands, submerged lands, swamp and over -flow lands in Newport Bay," which lands were in a triangular shape located between Lettered Lot B and Lettered Lot D parallel to and landward of the Bulk- head Line and bayward of the Decree 26. .i I ILine. Parcel D contained "uplands" consisting of Lettered Lots B, C and D, which abutted the lands described as Parc<,l C. Excepted from Parcel D were "all. casements for public utilities, 1 street lighting, storm drains and public ways opened or dedicated for public tpurposes as of record." Lettered Lot C and portions of Lettered Lots B and D appear, according to the September 25, 1927 map, to be located bayward of the I survey line of the State swamp and over- flow patent, of 1097. The last parcel, Parcel E, consisted of a strip of land adjacent to the mainland across from Lido :Isle near the turning basis where West Lido Channel and Lido Channel I 27 . intersect;. (b) The 1933 Lease stated in a recital clause that: ". in the judgment of the City Council of the City of Newport Beach the use of the tide lands and uplands abutting thereon . . . [described in the lease] for in- dustrial uses, would be inimical to the best interests of said city, I for the reason that Newport Harbor in said City has been developed, I 27 . I I L' LJ 28. improved and dredged as a pleasure harbor and not a harbor to be used for industrial purposes . . . ; ". . . it is the present intention that the tidelands and uplands abutting thereon, owned by said city, shall never be used for industria.= purposes, and shall be kept; for park, recreational., resi- dential and educational purposes; ". . . it is the judgment of the City Council of the City of Newport Beach that the leasing of said lands hereinafter described, to the Association . . . is not inconsistent with the trust imposed upon such portion of the lands hereinafter described, which may constitute tidelands or harbor frontage under the General Laws and Constitution of the State of Cali- fornia, and ". it is further the judgment of the City Council of the City of Newport Beach that the uplands hereinafter described cannot; be used without the tide- lands, nor can said tidelands be used without the uplands abutting thereon, and it is further the judgment of said City Council that the In,asing of the whole of said lands hereinafter described as one parcel is necessary for the proper development and use of said lands, water frontage and tidelands, for I recreational, residential and educational purposes ." L' LJ 28. .1 fl (c) The 1938 . lease was for a term of 25 years and provided that the leased lands were to be used for recreational, educrttional and civil purposes. The consideration for the lease was $750.00 per year. With respect to including additional lands within the leasehold, ' the 1938 Lease provided: "lt is specifically understood arid agreed between the parties hereto that. if any ways, streets or rights of way are vacated by said city, and said ways, streets or rights of way are located on any of t :he above described premises, then and in such an event said streets, ways and rights of way shall auto- matically be included within the description of the real property herein, demised, and shall become a part and parcel of this lease, and that it it is understood and agreed is contemplated that certain side- walks, ways and rights of way on ' the above described real property shall be vacated in the manner provided for by law, and that said Association shall pay all the expenses of said vacation proceed- ings, upon demand." ' The 1938 i.ease contained a covenant by which the Cit.'r covenanted that the Association "sha.11 have the right at all 29. 3G. tames during the term of this lease, to quietly and peaceably hold, possess, use, occupy and enjoy said leased land and premises." April 1, 1940 By Resolution %o. 1781, dated April 1, 1940, the City Council resolved and ordered that certain property on Lido ' Isle be closed up and abandoned. This property primarily consisted of those corridors the Association conveyed to the City by the quitclaim deed, dated June 10, 1929. The Resolution stated jthat the abandonment was pursuant to the "Street Opening Act, of 1889•" This act, repealed in 1963, provided that: "Whenever the public interest ' or, convenience may require, the city council of any city shall have I oll power and authority to order the . closing up in whole or in part of any street . . . ." ' `"he Act, defined the term "Street" as in- cluding "squ =are, lane, alley, court and ' place." The corridors through the Let.ter�,d Lots A to J were designated as "places" by the City. 3G. I 1 described as Parcel E in the 1951 Lease, which were the same lands designated as Parcel E in the 1938 Lease, was revised by deleting from the lease those lands contli,,uous to the mainland and including lands contiguous to the Lido Isle bridge to the mainland, which lands were pri- marily bayward of the United States Bulkhead Line and the Pierhead Line. 1 1 31. May 31, 1951 By a letter dated May 31, 1951, the Association requested the City Council 1 to conc:ider cancelling, the 1938 Lease and enterin_, into the same form of lease for an additional period of 25 years. June 11, 1951 An Agreement of Lease, dated June 11, 1951, executed by the City and the Association (hereinafter referred to as "1951 Lease ") provided for the lease of the same lands under the same terms as the 1938 Lease, except that the 1951 Lease was to expire on June 10, 1976. March 22, 1954 In an Agreement, dated March 22, 1954, executed by the City and the Associa- tion, the description of the lands described as Parcel E in the 1951 Lease, which were the same lands designated as Parcel E in the 1938 Lease, was revised by deleting from the lease those lands contli,,uous to the mainland and including lands contiguous to the Lido Isle bridge to the mainland, which lands were pri- marily bayward of the United States Bulkhead Line and the Pierhead Line. 1 1 31. I I [1 1 �J IF 1 [I, I 1958 (a) In a conversation between John P. Elsbach, the early developer of Lido Isle, and Bunster Creely, held on March 25, 1958, Elsbach stated that he had ",asked for a 99 -year lease [in 1928;, and the Council assured me that such was not necessary because the lease would be automatically renewed upon expiration and that it would be leased to the Lido Isle Community Association I orever. It was on this understanding, this assurance, that we gave them the property." (b) In a. conversation among R. L. Patterson, the City Engineer in 1928, Creely and others, Patterson stated that: "The City Council objected to the proposed method of the sub- divider controlling the lots [lettered lots] fronting on the Bay front,; and they requested that the subdivider deed as public streets the lettered lots, so as to guar- antee the right of access by the inside lots to the water front." 32. II IJuly 28, 1958 I 11 11 I U "The City Council felt that they could guarantee the perpetual use of these lots to the inside lot owners so as to provide access to the waters of Newport Bay for the reason that there was no guarantee to the inside lot owners that the association would not dispose of the lettered lots and as a further possibility that the Association might cease to exist and in that case the City was in a position to fully guarantee the use of the lots by the inside lot owners for access to the waters of Newport Bay." In a title report, issued by T.I., dated as of July 28, 1958, covering Lettered Lots A to P, the following was set forth: "Vestee" "CITY OF NEWPORT BEACH, a municipal corporation, in trust for the benefit of the community and the public under the provisions as set forth in Declaration of Restric- tions, recorded December 10, 1928 in Book 228, page 1, Official Records. "EXCEPTIONS: An easement for ingress l• and egress in favor of the public over said land, as shown on the map of Tract, No. 907, recorded in Book 28, pages 25 to 36, inclusive, of Miscellaneous naps; also private 33• easements for ingress and egress in favor of the owners of the lots in said Tract No. 907, such easements having been acquired under convey- ances of lots by reference to said map. ' "E. The effect of a resolu- tion dated April 17, 1940, recorded in Book. 1045 page 73, Official Records, by the City Council of Newport Beach, purporting to vacate portions of lots A to J, inclusive, ' as streets, as described therein." March 23, 1959 By an Amendment to Lease, dated March 23, 1959, executed by the City and the Association, the 1951 Lease was amended as follows: ' "The paragraph of said lease reading, DURPOSE: For the sole pur- pose of using said lands for recreational, educational and civil purposes.' is amended to read: ' P[iRPOSES : For the sole ' purpose o-' using said lands for ' recreational, educational and civic purposes. Association agrees that ' at all times during the period of this 1pa.se it shall keep said property in a clean and sanitary condition, and may, but it is not; ' required to do so, erect upon said demised premises at its own expense any marinas, boat, landings, play - grounds and floats, or may abut 34• ' wharves and piers to said property, and the uses and purposes herein set forth are not to be deemed a limitation of the uses and purposes to which Association may put said property but are indicative of the character of the improvements to be erected, or the uses and purposes to which the property may be put.'" March 19, 1973 In a letter, dated March 19, 1973, from Thomas R. Malcolm, representative of the Association, to the City, it was requested that the City renew the 1951 Lease for an additional twenty -five year term. October 42 1973 sy a letter, dated October 4, 1973, from Wilbur D. Layman, representative of the Association, to the City, a form of Re- newal of Lease Agreement was transmitted. This document provided for the renewal of the term of the 1951 Lease for twenty - five years fr:,m the date of the renewal and further provided that: "The rent shall. be the sum of $3,566.18 per year payable annually in advance . . . The rent here- under shall be adjusted at the end of erich five -year period so that the rent, payable for each year during each succeeding five -,year period will be adjusted as follows: 35• [1 [1 [1 ! ;Wltipl.y the initial rent hereunder ($3,566.18) times the total assessed value of all property on Lido Isle for the tax year immediately prior to the year in which the adjustment is to take effect and divide that product by the total assessed value of all property on Lido Isle for the `•.,axable year 1972 -1973• All other, provisions of the [1951] Lease area hereby incorporated by ref- erence herein and made a part hereof." [1 [1 [1 3F,. T.. F A S f: THIS L 'A ° " :, made and entered into this day of ✓; r 1975, by and between -.he CITY 0-" NEWPOaT �SL_ BEACH, a chartered municipal corporation, hereinafter referred to as "Lessor ", and the LIDO ISLE Cot•tbiUNITY ASSOCIA`PIO`S, a California "Le_. e "• non - profit co, : *lcration, hereinafter referred to as ,se" - Y, E Y T A I, S: A. Lessor holds title and is the owner of certain harbor frontage and tidelands, together with certain uplands abutting thereon located on Lido.Isle, City of Newport reach, County of Orange, State of California, hereinafter more particularly described. B. Lessee has leased said property from the Lessor and has improved and maintained said property pursuant to a lease agreement between Lessor and Lessee dated June 11, 1951. The term of the said existing lease expires on June 10, 1976. Lessee has requested Lessor to ex'.�:nd the term of said lease for an additional period of twenty -five (25) years under the following terms and k conditions. C. It is the judgment of the City Council of the City of Newport Beach that it is for the best interests and welfare of sai: City and the residents thereof, to .lease said .lands hereinafter described to Lessee for the purposes hereinafter set forth, for the consideration hereinafter maintained, and under the terms and condi- tions of this Lease. +, D. It is the judgment of the City Council of the City of Newport Beach that the uplands cannot be used without the tidelands, nor can said tidelands be used without the uplands abutting thereon; and it is further the judgment of Lessor that the leasing of the whole of said lands hereinafter described as one parcel is necessary for the proper development and use of said lands, water frontage and tidelands for recreational, beaches, commerce, navigation and fishery purposes. -1- i !Le jUdyMnt D `. tee CiL [ 1ncil of thn City of Newport Beach that the leasing o_° said lands hereinafter described, to L,essee, upon the conditions in this lease agreement specified, is not inconsistent with the trust purposes imposed upon such portions of the lands hereinafter described ;which may constitute tidelands, i nor is the leasing of said adjoining uplands hereinafter described in violation of the gift clause of the Constitution of the State of California; it is further the judgment of the City Council of the City of Newport Beach that this Lease complies with the Charter of the City of Newport Beach, all local ordinances and the General Laws of the State of California F. It is the judgment of the City Council of the City of Newport Beach that said leased lands cannot feasibly and practically be used by the general beach -going public because of limited vehicular and pedestrian access, lack of parking facilities and other support accommodations for the public. G. It is the desire of Lessor and Lessee to substantially reduce the area of leased lands from that described in the existing lease agreement between Lessor and Lessee and'in addition, Lessor and Lessee desire to reserve for the public certain access easements over portions of said leased lands and to reserve a right of access to the State of California to all tidelands- which may be a part of and which adjoin said leased lands. H. Lessor and Lessee have retained the professional services , of an independent appraiser for the purpose of determining-the fair rental value of said leased lands in order to.comply with the General 1 Laws and the Constitution of the State of California. I. It is the intention that said leased lands shall be used only for park., recreation, beaches, commerce, navigation and fishery purposes. J. Lessor proposes to lease to Lessee the property described hereinafter, and Lessee is willing to accept said lease on the terms and conditions hereinafter set forth. The City Council of the City of Newport Beach finds and determines that this lease does not violate -2- s' Q �t.ion 1,102 of t� ii�wp�.rt fse�!cii Ci.�y CharE( i.n th:zt constitutes a releasing of property undE:.r. :Lease on the effective date of said City Charter. NOW, THF.REFORF„ IN CONSIDERATION OF TfIB FOREGOING RECITALS AND THE MUTUAL, COVEN�\NTS set forth below, Lessor and Lessee hereby agree as follows: I. DESCRIPTION Oc LEASED PREMISES Lessor hereby leases, and I.,essee does hereby accept a lease of the property located on Lido Isle, in the City of Newport Beach, County of Orange, State of California, as more particularly described and depicted in that certain appraisal report covering beach properties on Lido Isle leased by the City of Newport Beach to the Lido Isle Community Association, prepared by Mawhinney and Associates, Inc., real estate appraisers, and dated January 31, 1975, which has been marked Exhibit "A" and attached hereto and made a part herein by this reference. II. TERM The term of this'.lease shall be for a period of twenty - five (25) years, commencing on the 15th day of April, 1975, and expiring on the 14th day of April, 2000. III. RENTAL Lessee covenants and agrees to pay to Lessor the sum of Three Thousand Seven Hundred Dollars ($3,700.00) per year for the use and occupancy of said leased lands, payable on the 15th day of April of each year so long as this lease remains in effect, commenc- ing on April 15, 1975. The rental payable for the first year shall be subject to proration by the remainder of the amount of any rents paid under the existing lease. Said rental payment is deemed to be the fair rental value for said demised property. IV. ADJUSTMENT OF ANNUAL, REiNTAL Commencing i4ith the 1.5th day of April, 1980, and every five (5) years thereafter, until the expiration or termination of -3- Eor.th .in =arar raph III oL tr is lezic :1 -'ll. he suUje. t c.o i.n::reas =- o- docrease in proportion to changes in the assessed valuation. i:1 .Ld increase_ or deCre21S' in the assessed valuation shall be based 0' a random selection of at least. twenty (20) parcels of property located on Lido Isle, to be chosen by the City M.inger but which shall I)- representativ! of all property classifications on the island. In no event, ho';:ev.r, sh :Ll the. rent be r.educad below Three Thousand Scve11 Hundred Dollars ($3,700.00) per year. V. USE Lessee shall use the demised lands, together with any improvements located thereon, exclusively for recreation, beach, park, commerce, navigation, fishery and water and marine oriented '. purposes only. Lessee agrees that it will not erect or construct any building or other structure upon any portion of said demised premises.without prior approval of the City Council of the City of Newport Beach. VI. MAINTEN?1NCE Lessee covenants'and agrees that during the term of this lease it will, at its own cost and expense, maintain the grounds, landscaping, piers, floats and any other improvement of any kind in existence or nature constructed or installed in the future on the demised property by the Lessee, at a high standard of maintenance and repair. If in the judgment of Lessor, such standards of maintenanc and repair are not being maintained, Lessor may, at its option, after written notice thereof to the Lessee and Lessee's failure to commence in good faith to remedy the same within a reasonable time, to diligently prosecute the same to completion, elect to correct any deficiency and Lessee covenants and agrees to pay to the Lessor on demand any and all sums expended by it in correcting any such deficiency. VII. INSURANCE - HOLD HARMLESS Lessee shall save and keep.Lessor, its officers, agents and employees free and harmless from any and all claims or demands -4- _.1 :: u .. t i. .1 . .l ....... ...... 'v, nc:. an--a o..,.ui,✓ "✓ Oi. lalt� :J.. G:')_:�n. ." -• ... .. .... i.i. ` _ i c ��'Lessee, Lessee shall in partial perfo mancc of this obligation b. procure and at all times during the term of this lease maintain in 3:u11 force and effect a policy, or policies, of public liability and property damage insurance protecting the City of Newport Beach, its officers, agent, and employees from all claims or demands for damages. The policy, or policies, shall provide for not less than I Two Hundred Thousand Dollars ($200,000.00) for injury or death of one person; Five Hundred Thousand Dollars ($500,000.00) for injury or death of two or more persons; and Fifty Thousand Dollars ($50,000.00) for damage_; to property. The City Manager may require an increase in the amount of insurance from time to time in accordance with changes in economic conditions. Attached to said policy shall be an endorsement which shall provide as follows: 1,within the limits.set forth in this policy, to indemnify and save the City of Newport Reach, its officers, agents and employees, free and harmless from all damage, claim, loss or liability of any name or t. nature whatsoever which the City of Newport Leach, its officers, agents or employees may hereafter sustain or incur, or may be imposed upon them, arising out of, or in any way connected with, the use or occupancy by the insured, its servants, agents and employees, of the premises described in a lease granted to insured by the City of Newport Leach." Lessee shall furnish, and maint,in with the Lessor, either i the original policy, or policies, or a certified copy, or copies, thereof.. The policy, or policies, shall be approved as to sufficien by the City Manager and as to form by the City Attorney. VIII. PUBLIC ACCESS There is hereby reserve'. over said lease properties at those points as designated in Exhibit "A ", public access easements -5- i L_li=:-'I,ul Cis. ; ?,u.- C, 't.Il "<: C�` a(�, .i "lfeO',/ f;` ✓;= tCV`:il i:0 thy.` paople of the State of Cal:Lfornia the right to fish in the waters on or adjoining said demised lands and the right of convenient access to said water over said access easements for said purpose. i IX. L1:SS012 °S RIGHT OF It7: 1,1,-1 10N Lessor reserves the right by its authorized agents, employe _vs or representatives to enter the leased premises to inspect the same or any part thereof at any time and to attend to or protect the Lessor's interest under this lease. X. COMPLIANCE WITH LAWS Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California, County of Orange, the City of Newport Beach or any other governmental body or agency having lawful jurisdiction over the leased property. XI. ASSIGNMENT Lessee shall not assign, transfer, sublease or give any grant of control of this lease or demised premises, or any part thereof, either voluntarily or involuntarily, unless first approved by the City Council. XII. NON- COMPLIANCE If the Lessee fails to comply with any of the terms and conditions of this lease, the Lessor may give to the Lessee a notice in writing of such failure and specify therein the.particu- lars in which Lessee has failed to comply wi.th'the provisions of this lease. If the Lessee fails for a period! of thirty (30) days after the ginjng of such notice to comply with the provisions of this lease, the Lessor may, at its option, termirkite this lease, and all rights of the Lessee therein shall cease and terminate and the Lessee shall immediately thereafter deliver possession of the premises to the Lessor. XIII. DEFAULT AND TERMINATION OF LEASE Time and each of the terms, covenants and conditions hereof are expressly made the essence of this lease. �iP.il �uiy of termi., co`7enan-IS, or :.ondi lions Of this l.e tae, 1nC lliaing thn pa- vm- -nt' of rental herein rese-rved, at the tliREf illid in the amount creA.rl .required, and shall. fa:i.l. to re:;�ty such d _fault .aithin chii:ty (30) d.ys af�cr ..e!rvie(.! of a Written notice from Lessor so to do if the defuit may bra cured by t,o payment of money, or to commence:: i,n g00% faith to remedy any other default within thirty (30) dz-17s an:l thereafter dilicjently prosecute the same to completion, or if Lessee shall abandon or vacate the leased premises, Lessor may,. at its option, and without further notice or demand, terminate this lease and enter upon the leased premises and take possession thereof, and remove any and all persons therefrom with or without process of law. XIV. SURRENDER OF POSSESSION UPON EXPIRATION OR TER2dINATION Upon the expiration of the term of this lease or sooner termination thereof as herein provided, Lessee shall peaceably deliver possession of said demised property to Lessor with all improvements located thereon in the same condition as delivered to Lessee, reasonable use and wear thereof, and damage by fire, Act of God, or by the element_; excepted. Any imporvcments or additions built, constructed or placed upon the leased property by Lessee shall remain on the leased premises and become the property of the Lessor without any cost to Lessor upon the expiration or termination of the lease. Y.V. RFE4EDIES CUMULATIVF The rights, powers, elections and 'remedies of the Lessor contained in this lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Lesso.r.'s right to exercise any other. XVI. i;O WAIVER No delay or omission of the Lessor to exercise any right or power arising from any omission, neglect or default of the -7- :ill .:,ate - .. ...:._. . }1..'�? 4r i' �i;� ,,...a ti. G.` 1 ,.. -•r ,r llcl� �. iJ'_' (:On1 waiver of any such Omission, naglect or de fault: on the part of the Lessee or any acquiescence therein. • No waiver of any breach of any of the t, °-,rms, covenants, agreements, restr.:icti.ons or conditions of this lease shall be construed as a wa iv�.r of any succeeding breach of the same or or. � any of the terms, covenants, agreements, restrictions or conditions of this lease. XVII. HOLDING OVER It is mutually agreed that if the Lessee shall hold over after the expiration of this lease for any cause, such holding over shall be deemed a tenancy from month -to -month only, upon the same terms, conditions and provisions of this lease, subject to payment by Lessee to Lessor of the sum of.Five Hundred Dollars ($500.00) per month. The provisions of this clause shall not he held as a waiver by Lessor of any right of re- entry, nor shall receipt of said rent or any part thereof, or any other act in apparent affirmance of the tenancy, operate as a waiver of the rights to forfeit this lease and the term hereby granted for the period as herein provided. XVIII. NOTICES It is mutually agreed that any notice or notices provided for by this lease or by law, to be given or served upon Lessee, may be given or served by mail, registered or certified, with postage prepaid, and if intended for the City of Newport Beach addressed to the City Manager, 3300 Newport Boulevard, Newport Beach, California 92660, or at such other address as may be hereafter furnished to the Lessee in writing, and if intended for Lessee, addressed to its Administrator., Lido Isle Community Association, 701 Via Lido Soud, Newport Beach, California 926E,0, or at such other address as may be hereafter furnished to the Lessor in writing, or it may be served personally upon any corporate officer of Lessee or person charged with general management responsibilities in connection with the leased property; and that any notice or notices provided by this 1 .' , ., coo Py I.. upon the may or i.0 City. Su of forty - eight t ' of he City ( O i NO JOi. `l t Beach i Or the C ch service shrill be deemed complete at (48) hours from an(a r:fCcsr the deposit States mail. of such notice, demand or co:cr,tuui.caf;i . on. xix. MSCELLr' NEOUS A. Inurement _d porsonn - Lty Clerk of the expiratio:" in the United Each anti all of the covenants, conditions and agreements herein contained she,ll., in accordance caith the context, :inure to the benefit of Lessor and apply to and bind Lessee, its respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said premises,or any part therm in any manner whatsoever. Nothing in this paragraph shall in any way alter_ the provisions herein contained against assignment or scbletting or the granting of licenses or concessions. B. Captions The captions of paragraphs and subparagraphs of this lease are for convenience only and do'not in any way limit or amplify the terms and provisions hereof. IN WI`L`NESS WHL:- ',ZCO-C, the parties hereto have executed this lease as of the day and year first above written. APPROVED AS TO City At CITY OF NETNPORT BEACH a municipal corporat1 yor r ATTEST: By " lcnk ✓% LIDO ISI,Fi COiAh11)NITY ASSOCIAT By: -- — -- { President Secretary `) -9- 7146736827 APP -1$ -97 04:16 PM LIDO-ISLE- COMM.ASSOC.* 7146736627 P.01 lido isle community association 7D Vap i IF'(-, _c. '-J i no 1S E - NEWPOPT SEAC4. Cn 911SU:4 TEjF ,1_.'IC i14!G73 El'(, TO: C t-t 1, FROM FAXX�TRANSMITTAL LETTER d/ - — DATE:` 1_IlI�� _TIME: PAGE: OF I U RECEIVER FAX J �a� SENDER FAX: (714) 673 -6827 It you did not receive the number of pages indicated above, please call the sender at 714- 673 -6170. SPECIAL INSTRUCTIONS AND /OR ITEMS SENT �bPcic -1 �eac'c . ��4 a n0n- pj'0ht ronprrn Live orpnizat on of 11' 1'(10 isle prOperLy OwneI S IPR -15 -97 04:16 PM LIDO +ISLE+COMM.eSSOC.� T146T3662T P.02 _L E A_S_E_ THIS LEASE, made and entered into this day of , 1975, by and between the CITY OF NEWPORT BEACH, a artered municipal corporation, hereinafter referred to as "Lessor ", and the LIDO ISLE COMMUNITY ASSOCIATION, a California non - profit corporation, hereinafter referred to as "Lessee ": R E C I T A L S A. Lessor holds title and is the owner of certain harbor frontage and tidelands, together with certain uplands abutting thereon located on Lido Isle, City of Newport Beach, County of orange, State of California,. hereinafter more particularly described. S. Lessee has leased said property from the Lessor and has improved and maintained said property pursuant to a lease agreement between Lessor and Lessee dated June 11, 1951. The term of the said existing lease expires on June 10, 1976. Lessee has requested Lessor to extend the term of said lease for an additional period of twenty -five (25) years under the following terms and conditions. C. It is the judgment of the City Council of the City of Newport Beach that it is for the best interests and welfare of said City and the residents thereof, to lease said lands hereinafter described to Lessee for the purposes hereinafter set forth, for the consideration hereinafter maintained, and under.the terms and condi- tions of this Lease_ D. It is the judgment of the City Council of the City of Newport Beach that the uplands cannot be used without the tidelands, nor can said tidelands be used without the uplands abutting thereon; and it is further the judgment of Lessor that the leasing of the whole of said lands hereinafter described as one parcel is necessary for the proper development and use of said lands, water frontage and tidelands for recreational, beaches, commerce, navigation and fishery purposes. -1- [i R -I5-97 04 :I7 PM 11DO- ISLE- COMM.eSSOC.+ 7146736e2T P_03 E. It is the judgment of the City Council of the City of Newport Beach that the leasing of said lands hereinafter described, to Lcssee, upon the conditions in this lease agreement specified, is not inconsistent with the trust purposes imposed upon such portions of the lands hereinafter described which may constitute tidelands, nor is the leasing of said adjoining uplands hereinafter described in violation of the gift clause of the Constitution of the State of California; it is further the judgment of the City Council of the City of Newport Beach that this Lease complies with the Charter of the City of Newport Beach, all local ordinances and the General�'�p Laws of the State of California. -- F. It is the judgment of the City Council of the City of Newport Beach that said leased lands cannot feasibly and practically be used by the general beach -going public because of limited vehicular and pedestrian access, lack of parking facilities and other support accommodations for the public. 4+ G. It is the desire of Lessor and Lessee to substantially f reduce the area of leased lands from that described in the existing JI lease agreement between Lessor and Lessee and in addition, Lessor and Lessee desire to reserve for the public certain access easements over portions of said leased lands and to reserve a right of access ito the state Of California to all tidelands which may be a part of and which adjoin said leased lands. , H. Lessor and Lessee have retained the professional services of an independent appraiser for the purpose of determining the fair rental value of said leased lands in order to bomply with the General Laws and the Constitution of the State of California. I_ It is the intention that said leased lards shall be used only for park, recreation, beaches, commerce, navigation and fishery purposes. J. Lessor proposes to lease to Lessee the property described hereinafter, and Lessee is willing to accept said lease on the terms and conditions hereinafter Set forth. The City Council of the City of Newport Beach finds and determines that this lease does not violate -2- APR -IS -9T 09 :16 PM LIDO«I SL E•,C OMM_g550C.•� T196T3602T P.09 Section 1402 of the Newport Beach City Charter in that this lease constitutes a releasing of property under lease on the effective date of said City Charter. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, Lessor and Lessee hereby agree as follows: I. DESCRIPTION OF LEASED PREMISES Lessor hereby leases, and Lessee does hereby accept a lease of the property located on Lido Isle, in the City of Newport Beach, County of Orange, State of California, as more particularly described and depicted in that certain appraisal report covering beach properties on Lido Isle leased by the City of Newport Beach to the Lido isle Community Association, prepared by Mawhinney and Associates, Inc., real estate'appraisgrs, and dated January 31, 1975, which has been marked Exhibit "A" and attached hereto and made a part herein by this reference. .Q, •- II. TERM The term of this lease shall be for a period of twenty - five (25) years, commencing on the 15th day of April, 1975, and expiring on the 14th day of April, 2000. III. RENTAL Lessee covenants and agrees to pay to Lessor the sum of Three Thousand Seven Hundred Dollars ($3,700.00) per year for the use and occupancy of said leased lands, payable on the 15th day of April of each year so long as this lease remains in effect, commenc- ing on April 15, 1975. The rental payable for the first year shall be subject to proration by the remainder of the amount of any rents paid under the existing lease. Said rental payment is deemed to be the fair rental value for said demised property. IV. ADJUSTMENT OF ANNUAL RENTAL Commencing with the 15th day of April, 1980, and every five (5) years thereafter, until the expiration or termination of -3- PPP -15 -97 09 :19 PM LIDOrtISLErtCOMM.e550C _ rt T196T3662T P.03 this Lease, whichever occurs first, the minimum rental sum as set forth in Paragraph III of this lease shall be subject to increase or decrease in proportion to changes in the assessed valuation. Said increase or decrease in the assessed valuation shall be based on a random selection of at least twenty (20) parcels of property located on Lido isle to be chosen by the City Manger but which shall be representative of all property classifications on the island. In no event, however, shall the rent be reduced below Three Thousand Seven Hundred Dollars ($3,700.00) per year. V. USE Lessee shall use the demised lands, together with any improvements located thereon, exclusively for recreation, beach, park, commerce, navigation, fishery and water and marine oriented purposes only. Lessee agrees.that it will not erect or construct any building or other structure upon any portion of said demised premises without prior approval of-the City Council of the City of Newport Beach. VI. MAINTENANCE Lessee covenants and agrees that during the term of this lease it will, at its own cost and expense, maintain the grounds, landscaping, piers, floats and any other improvement of any kind in existence or nature constructed or installed in the future on the demised property by the Lessee, at a high standard of maintenance and repair. If in the judgment of Lessor, such standards of maintenanc and repair are not being maintained, Lessor may, at its option, i after written notice thereof to the Lessee and Lessee's failure to commence in good faith to remedy the same within a reasonable time, to diligently prosecute the same to completion, elect to correct any deficiency and Lessee covenants and agrees to pay to the Lessor on demand any and all sums expended by it in correcting any such deficiency. VII. INSURANCE - HOLD HARMLESS Lessee shall save and keep.Lessor, its officers, agents and employees free and harmless from any and all claims or demands afl APR -IS -97 04:20 PM LIDO - ISLE- coMM.Assoc.- 71467E6e27 P_06 of any name or nature whatsoever arising out of, or incident to, the use and occupancy of the property herein described in this Lease. In partial performance of this obligation by Lessee, Lessee shall procure and at all times during the term of this lease maintain in full force and effect a policy, or policies, of public liability and property damage insurance protecting the City of Newport Beach, its officers, agents and employees from all claims or demands for damages. The policy, or policies, shall provide for not less than Two Hundred Thousand Dollars ($200,000.00) for injury or death of one person; Five Hundred Thousand Dollars ($500,000.00) for injury or death of two or more persons; and Fifty Thousand Dollars ($50,000.00) for damages to property- The City Manager may require an increase in the amount of insurance from time to time in accordance with changes in economic conditions. Attached to said policy shall be an endorsement which shall provide as follows: "Within the limits.set forth in this policy, +e. to indemnify and save the City of Newport Beach, its officers, agents and employees, free and harmless from all damage, claim, loss or liability of any name or nature whatsoever which the City of Newport Beach, its officers, agents or employees may hereafter sustain or incur, or may be imposed upon them, arising out of, or in any way connected with, the use or occupancy by the insured, its servants, agents and employees, of the premises described in a lease granted, to insured by the City of Newport Beach." Lessee shall furnish, and maintain with the Lessor, either the original policy, or policies, or a certified copy, or copies, thereof. The policy, or policies, shall be approved as to sufficienc; by the City Manager and as to form by the city Attorney. VIII_ PUBLIC ACCESS There is hereby reserved over said lease properties at those points as designated in Exhibit "A ", public access easements -5- GPP —IS -97 04 :20 PM LIDO- JSLE +COMM.ASSOC.- 7146786927 P.07 four (4) feet in width running from the adjacent dedicated streets to the adjoining tidelands. Further, there is hereby reserved to the people of the State of california the right to fish in the waters on or adjoining said demised lands and the right of convenient access to said water over said access easements for said Purpose.* IX. LESSOR'S RIGHT OF INSPECTION Lessor reserves the right by its authorized agents, employees or representatives to enter the leased premises to inspect the same or any part thereof at any time and to attend to or protect the Lessor's interest under this lease. X. COMPLIANCE WITH LAWS Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California, County of orange, the City "ot.Newport Beach or any other governmental body or agency having lawful jurisdiction over the leased property. Ts -' XI- ASSIGNMENT Lessee shall not assign, transfer, sublease or give any grant of control of this lease or demised premises, or any part thereof, either voluntarily or involuntarily, unless first approved by the City Council. XII. NON - COMPLIANCE If the Lessee fails to comply with any of the terms and conditions of this lease, the Lessor may give to the Lessee a notice in writing of such failure and specify therein the particu- lars in which Lessee has failed to comply with the provisions of this lease. If the Lessee fails for a period of thirty (30) days after the giving of such notice to comply with the provisions of this lease, the Lessor may, at its option, terminate this lease, and all rights of the Lessee therein shall cease and terminate and the Lessee shall immediately thereafter deliver possession of the premises to the Lessor. XIII. DEFAULT AND TERMINATION of LEASE Time and each of the terms, covenants and conditions hereof are expressly made the essence of this lease. qPR -15 -9T 04 :21 PM LIDO�ISL E.rCOMM_g550C. + T146TE662T P_0B If the Lessee shall fail to comply with any of the terms, covenants, or conditions of this lease, including the payment of rental herein reserved, at the time and in the amount herein required, and shall fail to remedy such default within thirty (30) days after service of a written notice from Lessor so to do if the defult may be cured by the payment of money, or to commence in good faith to remedy any other default within thirty (30) days and thereafter diligently prosecute the same to completion, or if Lessee shall abandon or vacate the leased premises, Lessor may, at its option, and without further notice or demand, terminate this lease and enter upon the leased premises and take possession thereof, and remove any and all persons therefrom with or without process of law. XIV. SURRENDER OF RO$SESSION UPON EXPIRATION OR TERMINATION Upon the expiration of the •term of this lease or sooner termination thereof as herein provided, Lessee shall peaceably T ^' deliver possession of said demised property to Lessor with all improvements located thereon in the same condition as delivered to Lessee, reasonable use and wear thereof, and damage by fire, Act of God, or by the elements excepted. Any imporvements or additions built, constructed or placed upon the leased property by Lessee shall remain on the leased premises and become the property of the Lessor without any cost to Lessor upon the expiration or termination of the lease. XV. REMEDIES CUMULATIVE The rights, powers, elections and remedies of the Lessor contained in this lease shall be construed as cumulative and no one of them shall be considered exclusivc of the other or exclusive of any rights or remedies allowed by law, and the exercise of one or mores rights, powers, elections or remedies shall not impair or be deemed a waiver of Lessor's right to exercise any other. XVI. NO WAIVER No delay or omission of the Lessor to exercise any right or power arising from any omission, neglect or default of the -7- "pp -15 -97 04.22 PM LIFO- JSLE- COMM_ASSOC.- 7146736927 P.09 Lessee shall impair any such right or power or shall be construed as a waiver of any such omission, neglect or default on the part of the Lessee or any acquiescence therein. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this lease shall be construed as a waiver of any succeeding breach of the same or of any of the terms, covenants, agreements, restrictions or conditions of this lease. XVII. HOLDING OVER It is mutually agreed that if the Lessee shall hold over after the expiration of this lease for any cause, such holding over shall be deemed a tenancy from month -to -month only, upon the same terms, conditions and provisions of this lease, subject to payment by Lessee to Lessor of the sum of Five Hundred Dollars ($5oo.o0) per month. The provisions of this clause shall not be held as a waiver by Lessor of anywc'ight.of re- entry, nor shall receipt'of said rent or any part.thereof, or any other act in apparent affirmance of the tenancy, operate as a waiver of the rights to forfeit this lease and the term hereby granted for the period as herein provided. XVIII. NOTICES It is mutually agreed that any notice or notices provided for by this lease or by law, to be given or served upon Lessee, may be given or served by mail, registered or certified, with postage prepaid, and if intended for the City of Newport Beach addressed to the City Manager, 3300 Newport Boulevard, Newport Beach, California 92660, or at such other address as may be hereafter furnished to the Lessee in writing, and if intended for Lessee, addressed to its Administrator, Lido Isle Community Association, 701 Via Lido Soud, Newport 8cach, California 92660, or at such other address as may be hereafter furnished to the Lessor in writing, or it may be served personally upon any corporate officer of Lessee or person charged with general management responsibilities in connection with the leased property; and that any notice or notices provided by this -8- "PP -15 -97 04:23 PM LIDO- ISI..E- COMM_GSSOC.- 7146736e27 P.10 lease or by law to be served upon Lessor may be served personally upon the Mayor of the City of Newport Beach or the City Clerk of said City. Such service shall be deemed complete at the expiration of forty -eight (48) hours from and after the deposit in the United States mail of such notice, demand or communication. XIX_ MISCELLANEOUS A. Inurement Each and all of the covenants, conditions and agreements herein contained shall, in accordance with the context, inure to the benefit of Lessor and apply to and bind Lessee, its respective heirs, legatees, devisees, executors, administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy of said premises or any part thereo in any manner whatsoever.* Nothing in this paragraph shall in any way alter the provisions herein contained against assignment or subletting or the granting of lidenses "or concessions_ w. B. Captions The captions of paragraphs and subparagraphs of this lease are for convenience only and do not in any way limit or amplify the terms and provisions hereof. IN WITNESS WHEREOF, the parties hereto have executed this lease as of the day and year first above written- APPROVED AS,TO FORM: City Attorney CITY OF NEWPORT BEACH a municipal corporati"on��(� By I ayor o TF. - By: Secretary Secretary -9- ,• LAW OFFICES NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN THIRTIETH FLOOR • UNION BANK SQUARE • 445 SOUTH FIGUEROA STREET • LOS .ANGELES, CALIFORNIA 90017 TELEPHONE (213) 6285221 July 3, 1974 The Honorable City Council City of Newport Beach 3330 Newport Boulevard Newport Beach, California 92660 yl Attention: Dennis O'Neil, Esq. By the CITY COUNCIL Ciro "Ht City Attorney M q++CN Gentlemen: You have asked for our opinion regarding the 40 authority of the City of Newport Beach ( "City ") to enter into the proposed Renewal of Lease Agreement ( "Lease Re- newal"), prepared by the Lido Isle Community Association, an association consisting, of the owners of land on Lido Isle ( "Association "), renewing the existing lease ( "1951 Lease ") with the Association covering certain lands in and 40 adjacent to Lido Isle ( "Leased Lands ") and the procedure to be followed in any such renewal. The background of the Lease Renewal raises a number of questions that are relevant to the broader issue of the City's administration of the tide and submerged lands • granted to it by the State of California ( "State "), With due regard to the limitations that were imposed upon our scope of inquiry many of these questions could not be re- searched and treated in a comprehensive fashion. Further, we have assumed that the City is able to find and determine that the Leased Lands cannot be used for public purposes. 0 Subject to these qualifications and those which follow and based upon the facts that are set forth herein we are of the opinion that: 1. The City has the authority to enter into the . Lease Renewal provided that the Renewal is modified as follows: (a) The general uses set forth in the 1951 Lease are restricted to those specified uses which the City is able to find are consistent with the public • trust for commerce, navigation and fishery. We recom- mend that the uses be limited to beaches, recreational • ♦ NOSSAMAN, WATERS, SCOTT, KRUEGER $ RIORDAN ♦ Dennis O'Neil, Esq. July 3, 1974 Page Two piers and other specified water- oriented recreational purposes. ♦ (b) The lands covered by the 1951 Lease are substantially reduced in size and at least delete those lands designated as Parcels A and B in the 1951 Lease, except those portions of Parcels A and B which are accessible and available for use by all members of the Association for park or water- oriented recreational .• purposes. The size of the area covered by a lease may affect its validity and the Parcel A and B lands should be so reduced because they cover an extensive area, almost completely surround Lido Isle, and, except for certain park and beach areas, are not generally used for the benefit of all the members of the Association. ♦ In this regard we note that major portions of such lands are primarily used in connection with private wharves. Such portions should be excluded from the Lease Renewal but can, of course, be the subject of individual leases from the City to wharf- oviners. The reduction of the Leased Lands will create a reduction ♦ in the rental payable by the Association which the City . would otherwise be required to impose. (c) The annual rental contained in the Lease Renewal is modified to provide for a reasonable rental return determined by objective standards. We recommend • that the leasing procedure of the State Lands Commission for state lands be adopted and that the rental be based on a fixed percentage of the appraised value of the lands covered by the Lease Renewal, subject to periodic adjustments by reappraisal. • (d) The quiet enjoyment covenant of the City contained in the 1951 Lease is modified by providing that said covenant is subject to the right of the State of California to use the Leased Lands free of charge which was reserved in the 1919 Statutory Grant and any :• other conditions disclosed by a current title report on lands covered by the Lease Renewal. The Statutory Grant also provided: 0 • • NOSSAMAN, WATERS, SCOTT, KRUEGER �k RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Three C7 "The absolute right to fish in the waters of said harbor with the right of convenient access to said water 40 over said lands for said purpose is hereby reserved to the people of the State of California." 10 I• Is 1• 1• I• It could be contended that this reservation ap- plies to all of the Leased Lands and should also be included in an exception to the quiet enjoyment covenant. This would, however, create an encumbrance that might be inconsistent with certain of the leasehold uses and we believe that the purposes of the reservation can be met by designating a reasonable number of specific routes for access across the Leased Lands to the graters of the harbor. These access routes should also satisfy other statutory restrictions. We recommend that such routes be available for fishery, general public recreational purposes and other uses encompassed within the trust purposes of commerce, navigation and fishery. 2. The Lease Renewal may be subject to the Coastal Zone Conservation Act of 1972 (Proposition 20) if the Lease Renewal were characterized as constituting a change in the use of the Leased Lands on the basis that it is akin to a new lease of lands which would otherwise be unencumbered upon the expiration of the 1951 Lease. Because the question of whether the Lease Renewal is subject to said Act cannot be answered without qualification, we recommend that the City file for an exemption from sa -d Act with the South Coast Regional Commission which could then request an opin- ion from the Attorney General on this matter. If the opinion were that the Lease Renewal was exempt from the Act, the Regional Commission would probably grant an exemption. If the opinion were that a permit under the Act was required, the City would need to obtain favorable action of the Com- mission (and the State Commission if the matter were appealed) by a two - thirds vote. 3. The Lease Renewal is subject to the Environ- mental Quality Act of 1970. The City Council in satisfying the requirements of the Act may be able to prepare a Nega- tive Declaration in lieu of an environmental impact state- ment, if it is determined that the Lease Renewal will not have a significant effect on the environment. • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Four L 10 No engineering studies or title searches were undertaken to determine the types of lands being leased and this letter is qualified in that regard. The facts upon • which this opinion letter is based and our analysis of the issues involved follow in that order. FACTS • The Association by a letter, dated October 4, 1973, addressed to Robert L. Wynn, City ,4anager, requested that the City renew the existing lease between the City and the Association, dated July 11, 1951, as modified by amend- ments dated May 22, 1954, and March 23, 1959 (said lease and • the amendments thereto are herein collectively referred to as "1951 Lease "). The Lease Renewal provides for the 1951 Lease to be renewed for a term of 25 years commencing from the date of the Lease Renewal and provides for an annual rental of $3,566.18, which is higher than the rental of $750.00 per year under the 1951 Lease. It is proposed that • the annual rental, which is payable in advance, will be ad- justed every five years pursuant to the following formula contained in the Lease Renewal: "Multiply the initial rent hereunder ($3,566.18) times the total assessed • value of all property on Lido Isle for the tax year immediately prior to the year in which the adjustment is to take effect and divide that product by the total assessed value of all property on Lido Isle for the taxable ! year 1972- 1973•" The Lease Renewal further provides that all other provisions of the 1951 Lease are incorporated by reference into the Lease Renewal. • Under the provisions of the 1951 Lease, the Associ- ation's use of the Leased Lands is limited to "recreational, educational and civic purposes." The 1951 Lease also con- tains a covenant by the City with respect to the quiet en- joyment of the Leased Lands by the Association. The Leased • 10 • NOSSAMAN, WATERS, SCOTT, KRUECER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Five • Lands covered by the 1951 Lease consist of the following five parcels, which are shown on the map appended hereto as Exhibit A ( "Map "): • (1) Parcel A: "[a]ll those certain tide lands, submerged lands, swamp and overflow lands in Newport Bay," which are ten feet in width surrounding Lido Isle "parallel to and adjacent to and bayward of the United States Government Bulkhead Lines." • (2) Parcel B: "those certain uplands abutting on tidelands, submerged lands, swamp and over- flow lands, as described in Parcel 'A'." more specif- ically, Parcel B lands consist of (i) a strip extending along the Lido Channel side of Lido Isle approximately • 50 feet in width adjacent to and landward of the Bulk- head Line and (ii) Lettered Lots A, E, F, G, H, I and J. Excepted from Parcel B are "all easements for public utilities, street lighting, storm drains and public ways opened or dedicated for public purposes as of record." • (3) Parcel C: "[a]11 those certain tide- lands, submerged lands, swamp and over -flow lands in Newport Bay," which lands are in a triangular shape located between Lettered Lots B and D and are parallel to and landward of the Bulkhead Line. • (4) Parcel D: "uplands" consisting of Lettered Lots B, C and D, which abut those lands de- scribed as Parcel C. Excepted from Parcel D are "all easements for public utilities, street lighting, storm drains and public ways opened or dedicated for public • purposes as of record." (5) Fifth Parcel: This parcel contains lands which are adjacent to the Lido Isle bridge. Most of these lands are located bayward of the Bulkhead Line and Pierhead Line. • A more extensive summary of the facts relating to this letter is set forth in the Chronology attached hereto as Exhibit B ( "Chronology "). U n • NOSSAMAN, WATERS, SCOTT, KRUECER R RIORDAN C] Dennis O'Neil, Esq. July 3, 1974 Page Six ANALYSIS I Imami ft9alrel A. AUTHORITY OF THE CITY OF NEWPORT BEACH TO LEASE. Because a substantial portion of the Leased Lands are tide and submerged lands which were conveyed to the City by the State pursuant to the 1919 Statutory Grantl described in the Chronology, the legal restraints upon the leasing of those categories of land necessarily apply. Pursuant to Article YET, Section 3 of the California Constitution, all • tide and submerged lands within two miles of an incorporated city are withheld from grant or sale to private parties. It is well established, however, that this constitutional provision does not prohibit leases as a "grant or sale" so long as the same are consistent with the public trust for commerce, navigation and fishery which affects such lands. City of Lon; Beach v. Vickers, 55 Cal. 2d 153 (1961); City of Oakland v. 4lilliams, 206 Cal. 315 (1929); San Pedro etc. R.R. Co. v. Hamilton, lbl Cal. 610 (1911); 34 Cal. Ops. Atty. Gen. (1959). Additiona -ly, the City as a matter of general law has only the legal capacity to enter into autho- rized leases. Whether the City has the authority to enter 41 into the Lease Renewal, then, necessarily depends upon its terms and provisions. As to that portion of the Leased Lands which con- sists of tide and submerged lands, the City has been specif- ically authorized to lease them pursuant to the 1919 Statu- tory Grant which provides that the City may lease all "tide- lands and submerged lands within the present boundaries of said City, and situated below the line of mean high tide of 6 1. Such lands appear to have been conveyed by this Statute which conveyed all lands "which border upon or are 1 in front of the upland now owned" by the City. On the other hand, a Superior Court decision indicates that said lands were conveyed by the 1927 Statutory Grant described in the Chronology. See Cit of New ort Beach v. Title Insurance • and Trust Company, Case No. 23669 dated May 25, 1928. The two Statutory Grants are very similar in provision and effect. • • NOSSAMAN, WATERS, SCOTT, KRUEGER a RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Seven • the Pacific Ocean . . . for a period not exceeding twenty - five years . . . ." By the 1929 Statutory Amendment described in the Chronology, the lease term limitation was extended to • fifty years. In addition, the City has the power to lease all of the Leased Lands pursuant to the general authorization provided to cities by Government Code Section 37385 and Civil Code Section 718. Section 37385 of the Government • Code, which is similar to Civil Code Section 718, provides: 1 "A city may lease tide and sub- merged lands, the wharves, docks, piers, and other structures or improvements on these lands, and as much of the uplands • abutting upon them as the legislative body deems necessary for the proper de- velopment and use of its waterfront and harbor facilities . ." Although the Leased Lands are described as consist- ing in part of "swamp and overflow lands ", we are of the opinion that there are no special problems in leasing such lands by the City, provided the requirements for leasing tide and submerged lands and uplands have been satisfied. With respect to limitations on the power of the • City to lease lands, Section 1402 of the Charter of the City of Newport Beach provides that the City shall not lease "any waterfront or beach property" until the leasing of such lands have been approved by a majority of the electors voting on such proposition at any general or special munic- ipal election. However, this restriction by the terms of • said Section does not apply to "the future leasing or re- leasing of such property under lease at the effective date of this Charter." The Charter became effective in 1955 [Chapter 1, California Statutes of 1955] and the property covered by the Lease Renewal was under lease pursuant to the • 1951 Lease on the effective date of the Charter; accordingly, said restriction is not applicable. The term of the Lease Renewal, which is for twenty -five years, and the term of the 1951 Lease, which is • 11 • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Eight C7 for twenty -five years, together do not exceed the fifty year limitation contained in the 1929 Statutory Amendment. Further, while there were leases in 1929 and 1938 to the Association and while the 1929 Lease did provide for an • option to extend for an additional period of time, there was never a period exceeding fifty years where the issue of extending or renewing the lease covering the Leased Lands was not subject to the sole discretion of the City Council. See Epstein v. Zahloute, 99 Cal. App. 2d 738 (1950); Fisher v. Parsons, 213 Cal. App. 2d 829 (1963); 34 Cal. Ops. Atty. • Gen. 4, 16 -19 (1959); see also annotations contained in 17 A.L.R. 2d 566, 571 (1951). C f• • C] • n u • B. USES. Cities mit under leases rations, §28.42 are limited in 10 McQuillin, (1966) states: the uses which they may per - The Law of Miuniciaal Coroo- "The leasing and permitting the use of municipal property is usually authorized, provided the public inter- est is served, or at least is not de- stroyed or diminished thereby. [Citing Oakland v. Williams, 206 Cal. 315 (1929)• Unconditional private uses are not favored, especially where specific legis- lative authorization therefor is lacking; however, judicial approval of the use and the conditions thereof will depend upon the grant of power to the municipality and the nature of the particular trans- action considered mainly from the stand- point of public requirements [citing Board of Port Com'rs of Cit of Oakland 3 v. Williams, 9 Cal. 2d 1 (1937)], especially the need for public purposes of the involved property." With respect to that portion of she Leased Lands which was conveyed as tide and submerged lands to the City by the 1919 Statutory Grant, the City has a high duty of • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Nine • responsibility in the management of these lands since the City does not hold them in a mere proprietary capacity but as successor in interest to the State "in trust for public purposes which have traditionally been delineated in terms • of navigation, commerce and fishery." City of Lon; Beach v. Mansell, 3 Cal. 3d 462, 482 (1970); City of Long Beach v. Marshall, 11 Cal. 2d 609, 614 (1938); People v. Monstad, 209 Cal. 65 , 661 (1930). This means that the City can make no disposition of such lands which will be prejudicial to the public trust EWard v. Mulford, 32 Cal. 365, 372 (1867)] and • must adopt such lands to the use for public trust purposes. People v. California Fish Co., 166 Cal. 576, 597 (1913). This trust duty is reflected in the 1919 and 1927 Statutory Grants and the 1929 Statutory Amendment. According to the 1919 Statutory Grant, the tide and submersed lands are only to be leased "for purposes consistent with the trust upon • which said lands are held by the State of California and with the requirements of commerce or navigation at said harbor." Thus, in leasing tide and submerged lands the City must lease such lands in accordance with'the. public trust. • See City of Long Beach v. P.iarshall, 11 Cal. 2d 609 (1938); Ko er v. i4iner, 172 Cal. 44 (1916); 34 Cal. Atty. Gen. 1, 11 1,59). In Oakland v. Larue 'riharf ? 'Warehouse Co., 179 Cal. 207, 215 (191 8) it was stated in this regard that: • "In each of the recent California cases cited by appellant, viz., San Pedro etc. Co. v. Hamilton, 1661 Cal. 610 and Koyer v. Miner, 172 Cal. 448, this court upheld the leases in question, and in the former case expressly approved the policy of mak- ing such leases of waterfront lands as would tend to interest private capital in the improvement of harbors, the case of Pacific Coast S.S. Co. v. Kimball, 114 Cal. 1 being cited as illustrative of the beneficent effects of this policy, • although in that case the lease was of lands fronting on Monterey Bay for the construction and operation of a wharf I• • • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Ten C7 for private use, the theory of this lat- - ter case as expressed therein being that the lease therein upheld was promotive of commerce and navigation. It is also to • be noted that in each of the cases of San Pedro etc. R.R. Co. v. Hamilton, supra, and Koyer v. 14iner, supra, the leases in question did not expressly specify or require that the lands so • leased must be used for any particular purpose promotive of commerce and nav- igation. Both leases were nevertheless upheld. . . ." Section 37386 of the Government Code defines oer- • miscible leasehold uses of tide and submerged lands: "A city may lease such [granted] tide and submerged lands and uplands for: (a) Industrial uses. • (b) Improvement and development of city harbors. (c) Construction and maintenance of wharves, docks, piers or bulkhead piers. • (d) Other public uses consistent, with the requirements of commerce or navigation in city harbors." I See also Civil Code Section 718 which is similar to Government �• Code Section 37386. With respect to uses which are considered to be consistent with the public trust, it is clear under California law that a wide variety of uses are permitted. Commerical piers and wharves [People v. Monstad, 209 Cal. 658 (1930); • Crystal Pier Amusement Co. v. Cannan, 219 Cal. 184, 185 (1933); Pacific Coast S.S. Co. v. Kimball, 114 Cal. 414 (1896)], yacht club facilities [Los Angeles Athletic Club v. Board of Harbor Commrs., 130 Cal. App. 37 (1933)], railroad u • • NOSSAMAN, WATERS, SCOTT, KRUEGER C RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Eleven • purposes [Koyer v. Miner, 172 Cal. 448 (1916); San Pedro etc. R.R. Co. v. Hamilton, 161 Cal. 610 (1911)], mineral operations [Boone v. Kingsbury, 206 Cal. 148, 183 (1928)], • Y.M.C.A. dormitory facilities to serve, in part, merchant seamen [People v. City of Long, Beach, 51 Cal. 2d 875, 879 (1959)], warehouse operations [City of Oakland v. Williams, 206 Cal. 315, 330 (1929); Oakland v. Larue Wharf & Warehouse Co., 179 Cal. 207, 209 (1918)], and restaurants, cocktail lounges and small shops [34 Cal. Cps. Atty. Gen. 4 (1959); • Martin v. Smith, 184 Cal. App. 2d 571 (1960)] have been upheld as permissible leasehold uses of tide and submerged lands which were consistent with the public trust. To determine which lands of the Leased Lands may be subject to the public trust for commerce, navigation and fishery, it would probably be necessary for the City to undertake an extensive engineering study.2 We do not, how- ever, believe that such work will be necessary if the City I• 40 2. In City of Ne,;rport Beach v. Title Insurance and • Trust Company (Superior Ct. Case No. 23689, 1928) ( "Decree Line case "), the court set the "line of ordinary high tide of the Pacific Ocean" ( "Decree Line ") and held that the lands landward of the Decree Line belonged to Title Insur- ance and Trust Company and the lands bayward of the Decree Line were "tidelands and submerged lands" and belonged to • the City pursuant to the 1927 Statutory Grant. By Chapter 172, California Statutes of 1929, the Decree Line was estab- lished and declared to be the line of ordinary high tide. Chapter 172 further stated that the grants to the City in- cluded all tidelands, whether filled or unfilled, bordering said line. Parcel B as described in the 1951 Lease, exclud- ing a portion thereof adjacent to the Lido Isle bridge, is located bayward of the Decree Line and Parcel C as de- scribed in the 1951 Lease is located bayward of the Decree Line. The other three parcels included in the 1951 Lease are generally located landward of the Decree Line. However, the Decree Line case may not be determinative as to owner- ship nor as to the character of the Leased Lands, especially those lands landward of the Decree Line, for two reasons. First, the Decree Line case set the line of ordinary high tide as it was in 19_2� and not the ordinary high tide line in its last natural condition. According to California I• 40 • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN I• Dennis O'Neil, Esq. July 3, 1974 Page Twelve complies with the laws governing tide and submerged lands in • leasing all of the Leased Lands. Moreover, we believe, as will be discussed below, that any of the Leased Lands which are not tide and submerged lands are of a character which • requires a similar responsibility on the part of the City in leasing lands. Assuming that those lands landward of the ordinary • high tide line as set forth in City of Newport v. Title In- surance and Trust Company (Superior Ct., Case No. 23669, I_9_2 T) are not subject to the public trust for commerce, navigation and fishery, such lands in our opinion should be treated as potentially being subject to similar restric- tions on use. It is clear that these lands are necessary • for access to the navigable waters of the bay and, there- fore, are necessarily o£ the quality deserving of special protection by the City and the State for the benefit of the public. See Cal. Const. Art. 15, Sect. 2; Marks v. Whitney, on this issue. Boundary line cases which do not expressly • cases, artificially filled tidelands are still considered subject to the public trust for commerce, navigation and fishery. Cit of Nee;oort Beach v. Falter, 39 Cal. App. 2d 23, 30 (19 0). Because there is evidence that prior to 1928 the lands in and adjacent to Lido Isle were subject to dredge and fill operations [The Register, January 25, 19731 • it is possible that there could be lands subject to the public trust which are landward, of the Decree Line and would not be subject to the decision in the Decree Line case since it was premised on the ordinary high tide line in 1928• This conclusion is reinforced by the fact that Chapter 172, California Statutes of 1929 stated the City held tidelands, • whether filled or unfilled, which bordered the Decree Line. Second, it seems clear that boundary line agreements which do not reflect a good faith effort to determine the true boundaries of tide and submerged lands may not be conclusive on this issue. Boundary line cases which do not expressly involve the existence or non - existence of the public trust • may not adjudicate the existence of the public trust and are thus not res judicata on this issue. See City of Long Beach v. Mansell, 3 Cal. 3d 462, 482 (1970). • • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirteen :J 6 Cal. 3d 251 (1971). See also Gion v. City of Santa Cruz, 2 Cal. 3d 29 (1970); 10 McQuillin, The Law of Municipal Cor- porations §28.38 (1966); Headley v. San Francisco, 70 Cal. • 320 (1886), aff'd. 124 U.S. 639 (1887). It is noteworthy that our factual research has revealed that certain of the above lands, Lettered Lots A to K, were conveyed to the City fer beach purposes. In this respect, the 1928 debates in the City Council reflect the concern by the Council that such Lots be subject to beach uses: "Considerable discussion has been indulged over the acceptance of the Lido map by the city council, which insists that at least six street ends be dedi- cated to the public. "The council feels that the public should not be denied the beaches, which, they say, are being all too rapidly ab- sorbed by private interests." Newport News (August 23, 1928). While the history is not free from ambiguity (see the Chro- nology), it is clear that the prudent course is for the City to administer these Lots as though they were impressed with a trust for this purpose. We suggest that in the light of the current trend to protect and preserve recreational areas reflected by • legislation and judicial decisions and for the purpose of achieving uniformity in approach, the City treat any of the Leased Lands used as beaches or for access thereto as if such lands were subject to a public trust for these pur- poses. It is noteworthy in this regard that Government Code Section 37386 and Civil Code Section 718, supra, authorizing • leases of tide and submerged lands are also applicable to uplands abutting such lands. • I• • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Fourteen • With respect to determining whether the uses under the Lease Renewal are consistent with the public trust by which the City holds the Leased Lands, the uses enumerated • in the 1951 Lease are limited to "recreational, educational and civic purposes." The 1951 Lease lists uses which are considered indicative of these purposes such as marinas, boat landings, playgrounds, floats, wharves and piers. This list, according to the 1951 Lease, was "not to be deemed a limitation of the uses and purposes." In a recital clause contained in the 1951 Lease, it is stated that in the judgment of the City Council such Lease uses are not incon- sistent with the trust imposed upon the Leased Lands which "may constitute tidelands or harbor frontage ." Notwithstanding the list of uses, the general • purpose clause of the 1951 Lease appears to be overly broad since certain recreational, educational or civic uses may be inconsistent with the public trust under which the City holds the Leased Lands. For example, the construction of a public school or Lido isle Association civic center on Lettered Lots A to J would be inconsistent with their use • for beach purposes. In order to eliminate this problem, we suggest that the Lease Renewal set forth specific lease uses for designated areas in place of the general purpose clause. Such specific uses must be consistent with the public trust under which the City holds the Leased Lands and the City • Council must be able to so find. Further, as will be more fully discussed below with respect to exclusive use, the City, in conjunction with its finding as to specific uses, should also be able to find and determine that the Leased Lands cannot be feasibly used for public purposes. I• C. EXCLUSIVE USE. A lease of city -owned tide and submerged lands which results in the exclusive occupancy of such lands by private parties to the exclusion of the general public is • generally permitted under California law provided there is no express restriction on the city's authority and provided that the lands subject to lease constitute a relatively small parcel. In 23 Cal. Ops. Atty. Gen. 97, 99 (1954), it was stated: I• • n NOSSAMAN, WATERS, SCOTT, KRUEGER & MORDAN Dennis O'Neil, Esq. July 3, 1974 Page Fifteen " it has long been recognized and accepted in this State that the State might lease a portion of its property, as permitted by law, without the necessity of the lessee holding that property open for general public use. This is so obviously the practice as to require no citation of authority, and there is no reason why any different rule should be adopted with reference to minor structure permits -- which permits are in their very nature leases." See People v. Monstad, 209 Cal. 658, 662 (1930), (the power to lease includes the power to lease to an individual, firm or corporation for the purpose of erecting a private wharf or vier); Pacific Coast S.S. Co. v. Kimball, 114 Cal. 414, 416 (1896), (no ground for contention that the City of Monterey could not lease any portion of the harbor for a private wharf); San Pedro etc. R. R. Co. v. Hamilton, 161 Cal. 610 (1911); Oakland v. Larue .Iharf & Warehouse Co., 179 Cal. 209 (1918) ; City of Oafla v. ':dilliams, 2,06 Cal. 315 (1929); Los n eles Athletic C;__ b v. Board of Harbor. Commrs., 130 Cal. App. A 370 1933 . The Lease Renewal incorporates the 1951 Lease which contains the City's covenant to the Association of quiet enjoyment. The 1951 Lease could, therefore, be construed to mean that the Association has the exclusive use of the Leased Lands. This exclusive use may, however, be subject to public rights discussed below which the City has not terminated or may not have the authority to terminate, and appropriate changes in the lease or exceptions to the cove- nant of quiet enjoyment should be made. • First, the 1919 Statutory Grant reserves to the public the right of access over and the right to fish on that portion of the Leased Lands conveyed to the City by said Grant in the following language: • "The absolute right to fish in the waters of said harbor with the right of covenient access to said waters over Is U • NOSSAMAN, WATERS, SCOTT, KRUEGER S RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Sixteen • said lands for said purpose is hereby reserved to the people of the State of California." See Fireman's Fund Insurance Co. v. Standard Oil Co. of Cal., 339 • F,2d 1 , 153 (9th Cir. 106 ). Second, Section 53036 of the Government Code, in providing that cities shall reserve a right of access or make available an alternative access route in leasing beach front property, states: • "No local agency . . . shall sell, lease or otherwise transfer real prop- erty owned by it and lying between the high water line of the Pacific Ocean and the public street or highway nearest the • Pacific Ocean without reserving to the public the right of access over such real property, unless such local agency or its grantee shall make available to the public an alternate route which, in the judgment of the local. agency, gives • equal or greater public access to the Pacific Ocean in the same immediate vicinity." This provision is consistent with and in furtherance of Article XV, Section 2 of the California Constitution which • provides: "No individual, partnership, or corporation, claiming or possessing the frontage or tidal lands of a harbor, �• bay, inlet, estuary, or other navigable water in this State, shall be permitted ! to exclude the right of way to such water whenever it is required for any public purpose, nor to destroy or ob- struct the free navigation of such water; and the Legislature shall enact 1• such laws as will give the most liberal construction to this provision, so that • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN I• Dennis O'Neil, Esq. July 3, 1974 Page Seventeen access to the navigable waters of this State shall be always attainable for the people thereof." �. The protection of access to beaches and navigable waters is also reflected in Government Code Section 39933, regarding the protection of free and unobstructed access by the public from public streets to navigable waters, and Government Code Section 54091, regarding free access to beaches regardless of race, religion or national origin. in addition, the decision in Marks v, Whitney, 6 Cal. 3d 251 (1971) held that the littoral high -tide property owner has a right from his beach frontage to the line of ordinary low tide. The right of access and the right to fish are rights which are reflected in the public trust for commerce, navigation and fishery. Although it could be argued that the right of access and right to fish can be restricted or eliminated [People v. Monstad, 209 Cal. 658 (1930), supra], prudence dictates that the City should provide designated routes of public access through the Leased Lands which are '• reasonable in number for purposes encompassed within the trust for commerce, navigation and fishery. 0 • 0 Third, the 1919 Statutory Grant states in pro- viding that the granted lands are to be used for the estab- lishment of a harbor: "Said harbor shall be improved by said city without expense to the state and shall always remain_ a public harbor for all purposes of commerce and navigation, and the State of California shall have at all times the right to use, without charge, all wharves, docks, piers, slips, quays and other improvements constructed on said lands or any part thereof for any vessel or other water craft or rail- road owned or operated by the State of California." • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN The Declaration so construed would require access to either the public or to all Lido Isle residents. If u • Dennis O'Neil, Esq. July 3, 1974 Page Eighteen • Fourth, in a title report issued by Title Insur- ance and Trust Company, No. 252576 -RD, dated July 30, 1958, which report covers Lettered Lots A to J, it is stated that these lots are subject to: • "An easement for ingress and egress in favor of the public over said land as shown on the map of Tract No. 907, re- corded in book 28 pages 25 to 36, inclu- sive, of Miscellaneous Naps ." • we are unable to give our opinion as to the validity or basis of this exception because of the scope of our research. However, we have sufficient knowledge to make the following comments with respect to two matters which may, although not necessarily, assist in explaining the above - quoted title exception. • First, the Declaration of Protective Restrictions provides with respect to Lettered Lots A to J, which consti- tute portions of Parcels B and D under the 1951 Lease, and Lettered Lots K to P, which are interior lots and which are ,• not covered by the 1951 Lease, that only "band stands, comfort stations, recreational or other structures for the use, welfare and benefit of the community and the public" can be constructed. Further, it is provided that on all lots "having Bay frontage [Lettered Lots A to J] the struc- tures must be so erected and maintained that free access to the waters of the Bay and the Beach shall at all times be available to the residents of the community or the public." The deed to the City from Title Insurance and Trust Company, dated January 4, 1929, which may be the basis for ownership of these Lots by the City, conveyed Lettered Lots A to P subject to these restrictions. The phrases "the community • and the public" and "the community or the public" can be reconciled by the fact that "the community and the public" applies to construction on Lettered Lots A to P (Lots L to P are not part of the 1951 Lease), while "the community or the public" applies to access through Lettered Lots A to J (Lots subject to the 1951 Lease and fronting the bay). The Declaration so construed would require access to either the public or to all Lido Isle residents. If u • • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN • Dennis O'Neil, Esq. July 3, 1974 Page Nineteen access were allowed to all Lido Isle residents, then access to the general public based upon the "or" contained in the Declaration would not be protected by the Declaration. This interpretation would appear to be consistent with the pur- pose of the transaction by which the City obtained title to Lettered Lots A to J and then leased them to the Association. According to the debates in the City Council meetings held in 1928 as set forth in the Chronology, both the City Council and the Association intended that these Lettered Lots be used as beaches. This purpose would appear to be fulfilled either by a lease to the Association for beach purposes or by opening the beaches to the public. During said debates, certain members of the City Council stressed the need for public use of the Lettered Lots. Newspaper article, probably from Newoort Nev's (August 16, 1928); Mevroort News (August 23, 1928). While such statements indicate an intent to create public beaches, they should logically be considered in light of the fact that the City Council leased such Lots to the Association and that they were not, therefore, available to the general public. Newspaper article, probably from Newport News (September 13, 1928). Second, the Association quitclaimed the ten -foot corridors through Lettered Lots A to J (they are not the same as the utility corridors dedicated to the City by the subdivision map) by Quitclaim Deed, dated June 10, 1929. 40 The City Council by Resolution No. 1781, dated April 1, 1940, however, abandoned such corridors. We are of the opinion that the Lease Renewal should contain provisions recognizing existing rights; thus modification of the quiet enjoyment covenant contained • in the 1951 Lease would be requires. As noted above, we recommend that routes be designated and available for fish- ery, general public recreational purposes and other uses encompassed within the trust purposes of commerce, naviga- tion and fishery. There has also been indication that an exclusive lease covering tide and submerged lands may only be entered into if that lease covers no more than a small area. In an • 1 • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty K opinion letter from the Attorney General, Cal. Ops. Atty. Gen. 50 72/47 IL (December 7, 1973), concerning the issue of discrimination in the leasing praci�ices of the San Diego Unified Port District, it stated: • "It is established that relatively small tideland areas may be leased for pur- poses consistent with the public trust (such as a wharf or marina), even though the facility erected thereon is for the • exclusive use of the lessee and not available for public use. Pacific Coast S.S. Co. v. Kimball, 114 Cal. 4i4 T-17-96); 23 Ops. Att'y. Gen. 97, 99 (1944). Cf., San Vicente Nurser School _ v. County of Los Angoles, 147 Cal. App. In 34 Cal. Ops. Atty. Gen. 4, 11 (1959), the opinion also contained a reference to the size of the lease area: "The courts have held such leases ,• actually aiding commerce, navigation and fishery to be valid in a number of instances, where only a portion of the tide lands granted to the city by the State was so leased." • In San Pedro R.R. Co. v. Hamilton, 161 Cal. 610, 621 (1911), the Supreme Court upheld a lease involving "a mere fragment of all of the like water -front lands." It is indeed argu- able that the small parcel criterion is not a requirement for leasing; there is no California decision that has passed ;• upon the issue as to leases. We suggest that the City observe the small parcel criterion before entering into the Lease Renewal, however, with due regard to the trends of authori- ties in the area. In this respect there are two cases which expressly state that the small parcel criterion is a require- ' ment as to grants of tide and submerged lands, Atwood v. • Hammond, 4 Cal. 2d 31 (1935) and City of Long Beach v. Mansell, 3 -Cal. 3d 462 (1970). In Mansell at page 465, the court in setting forth the limited circumstances when tidelands may be conveyed into private ownership stated: • • • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIO RDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -One • ". generally speaking the reclaimed area alleged to be free from both the public trust and the constitutional restriction against alienation into ,• private ownership must be, as it were, a ! residual product of the larger program -- a 'relatively small parcel' to use the language of Atwood . ." We have been informed by the City that the Leased �• Lands cover approximately 12.75 acres. In comparison to the lands granted by the State to .,he City by the various statutory grants [1919 Statutory r ^ant; 1927 Statutory Grant; Chapter 813, Statutes of 1929], which according to the State Lands Division encompass approximately + 13,518 acres (12,778 acres in the ocean and 740 acres in the Bay), • there is substantial support for the conclusion that 12.75 acres are relatively minor in area. See Atwood v. Hammond, 4 Cal. 2d 31 (1935) involving 18 acres; City of Long Beach v. Mansell, 3 Cal. 3d 462 (1970) involving five acres. The small parcel criterion must also be examined • in terms of effect. County of Orange v. Heim, 30 Cal. App. 3d 694, 728 (1973). Since the Leased Lands surrounding Lido Isle cause the Association to have control along the entire waterfront, the Lease Reneoral will, accordingly, have a significant impact on any potential public use of the Lido Isle beaches and offshore. In County of Oran,e v. Heim, 30 • Cal. App. 3d 694, 726 (1973), it was stated: "At the present time through County's ownership in trust of the granted tide- lands and its control over the public • easement in the patented tidelands, the public has control of all of the shore- line of [Upper Newport Bay]. We recog- nize that, at present, access to the shoreline is limited and that the shoreline is in many places covered and uncovered by the ebb and flow of the tide limiting its utility. Neverthe- less, the public does presently control the entire shoreline, and as a result of the exchange it would be relinquishing two - thirds of the shoreline to be con- veyed into private ownership. We do 11 • NOSSAMAN, WATERS, SCOTT, KRUEGER N RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Two E not believe that in formulating the 'relatively small parcel' criterion, the Mansell court meant to countenance • public relinquishment of two- thirds of the shoreline of an entire bay." Similarly, the court in Oakland v. Oakland ?dater Front Co., 118 Cal. 160, 190 (1897) held that: • ". a sale of the lands [Oakland waterfront] by parcels would no doubt have been a proper exercise of power by the municipal authorities, but a trans- fer in bulk to a private citizen, without any reservation of the right of access • to the navigable waters by which the town was almost completely surrounded, was a gross and evident excess of power." Although these cases involve the granting of lands • rather than leasing and involve larger quantities of lands, we urge that the continuing expansive trend of protecting tide and submerged lands for purposes of the public trust for commerce, navigation and fishery [Marks v. Whitney, 6 Cal. 3d 251 (1971)] strongly indicates that the City should consider these cases in determining the amount of lands to • be leased under the Lease Renewal. We recommend in this regard that the City reduce the size of the lands described as Parcel A and Parcel B in the 1951 Lease by eliminating those Parcel A and Parcel B lands which are not accessible and available for use by all members of the Association for • park or water- oriented recreational purposes. The lands which should be excluded from the Lease Renewal, as noted in paragraph 1(b) above, are presently subject to exclusive personal use and can be better administered on an individual basis. Further, the elimination of water -front control of Lido Isle by the Association will be consistent with the precepts of Oakland v. Oakland Water. Front Co., 118 Cal. 160, 190 (1897). It should also be emphasized that although the exclusive use of lands subject to a public trust has been I• • • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Three 1• liberally permitted in the past, the expansive nature of the public trust doctrine may now require that exclusive leases of public trust lands be subject to the condition that • exclusive use be permitted only if the public cannot prac- tically use the leased lands. We understand that the lands covered by the Lease Renewial are not in fact feasible for public use; consequently, this point will not be discussed further. Before leasing such lands, however, we suggest that the City find that the Leased Lands are not subject to 49 a feasible public use. See Mallon v. City of Long Beach, 44 Cal. 2d 199 (195 5) and City of Lone; Beach v. ; +gorse, 31 Cal. 2d 254 (1947) with respect to a city's duty as trustee to use tide and submerged lands for trust purposes of commerce, navigation and fishery. • D. CONSIDERATION It has been proposed by the Association that it pay to the City an annual rental of $3,566.18, subject to • adjustment every five years based on this primary sum. In order for the City to enter into the Lease Renewal the rental provided for in the Lease Renevral must meet the requirements of Article XIII, Section 25 (formerly Article IV, Section 31) of the California Constitution prohibiting the gift of public funds or other things of value and of the 1919 Statutory Grant. Further, the amount of rental the City receives must be consistent with its duties as trustee pursuant to the trust under which it holds the Leased Lands. With respect to the 1919 Statutory Grant, it is stated in the Grant: i "In the management, conduct, or operation of said harbor or any of the utilities, structures, or appliances mentioned in paragraph (a) no discrim- ination in rates, tolls, or charges or • in facilities for any use or service in connection therewith shall ever be made, authorized or permitted by said City, or by its successors." • 0 NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 0 Page Twenty -Four We do not here pass upon whether or not the Lease Renewal might result in a violation of the foregoing re- strictions; we have not been supplied with nor have been asked to review any information as to the rental of com- parable lands and their use. We are, however, able to suggest basic standards which the City may wish to consider. First, the City may set different rental rates based upon differences in leasehold uses or types of lessees. See Live Oak W.V. Assn. v. Railroad Corn., 192 Cal. 132, 143 (1923), (involving a distinction between landowners holding contracts with a public utility and those who did not). Second, the City's distinction among various leasehold uses and types of lessees must be based upon a reasonable classi- fication such as the purpose or character of the use. City & County of San Francisco v. Western Air Lines, Inc., 204 Cal. App. 2d 105, 140 1902 Third, the City's classi- fication may be reasonable although there is only one lessee in a class. City & County of San Francisco v. Western Air Lines, Inc., supra. Article XIII, Section 25 of the California Con- stitution prohibits the legislature from authorizing a city to make a gift of public funds or other things of value. This means with respect to leases that "courts may well conclude that leases . . . at a rental charge deliber- 0 ately set below the fair rental value of the leased property are violative of the 'gift clause' of the California Consti- tution." Cal. Ops. Atty. Gen. 50 72/47 IL (December 7, 1973)• Where, however, the lease provides for uses which are (1) for a public purpose within the jurisdiction of the . city and (2) for the interest and 'benefit generally to the public, such a lease which has a rental set at less than fair rental value will probably not violate Article XIII, Section 25. City of Oakland v. Garrison, 194 Cal. 298 (1924). In People v. City of Long peach, 51 Cal. 2d 875, 883 (1959), the court, in upholding a lease of the tidelands to the Y.M,C.A. for a rental of $1.00 per year on the basis that it did not violate the gift clause of the Constitution, stated: "In the present case there is also no grant in fee or appropriation of money 0 7 • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 19;4 Page Twenty -Five t7 to a private organization. The Y.M.C.A. receives only the use of the building for 25 years on condition that at all times it carries out the trust purposes for the • public benefit under the supervision of ,the city. When it ceases to do so its rights in the building terminate. More- over, it can gain no monetary benefit from the lease. Thus, other than the goodwill that it may engender for itself, the sole • benefit it will derive is the ability to promote a public trust purpose that happens also to be one of its own. Under these circumstances, the public benefit that will result from the • Y.M.C.A.'s operation of the facility at its own expense is clearly sufficient consideration for the Y.M.C.A.'s use of the building and such incidental non - monetary benefits as it may receive." • The Leased Lands are exclusively leased for the benefit of the Association and its members, and not for the benefit of the public. The Lease Renewal. should, therefore, provide for a rental representing the fair rental value of the Leased Lands because the provisions of Article XIII, Section 25, as interpreted in Peoole v. City of Long Beach, 41 supra, do not permit otherwise. In addition to the prohibitions set forth in Article XIII, Section 25, of the California Constitution, the City has a duty under the public trust for commerce, navigation and fishery to receive a fair rental value on 0 lands subject to such trust. This duty is based upon the obligation of the City to use trust property for state -wide concern and not for purely local or private benefit. Mallon v. City of Long Beach, 44 Cal. 2d 199, 210 -211 (1955); City v. San Diego Unified Port District, 227 Cal. App. 2d 455, 472 (19 ). The City would thus be in • breach of its trust duties in receiving less than the fair rental value for the Leased Lands as the Association and its members would directly benefit from the lower rental without such lower rental appreciably benefiting the public. NOSSAMAN, WATERS, SCOTT, KRUEGER R RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Six This trust duty of administering such lands has been recognized by the City. According to Section 17.33.020 of the Newport Municipal Code, which regulates piers and • floats, the City has the responsibility of administering tide and submerged lands in conformity with the purooses of the public trust "and .with accepted standards of equity and management of public lands and resources." Prior to the amendment of this section on May 24, 1971, the section stated that "[t]he presence of privately owned piers and floats on and over public tide and submerged lands deprives the general public of the use of said areas for fishing, navigation and recreational activities, and it is in the spirit of the tidelands trust that the public be reimbursed directly for the loss of use of said areas." This policy clause was deleted in 1971, but it is still an accurate statement of the public trust imposed on the City. In determining what constitutes fair rental value is we urge the City to follow the practices of the State Lands iC, With respect to Chapter 17.33 of the Newport Municipal Code covering pier registration fees and our con- clusion set forth in paragraph .1(b) at the beginning of this opinion concerning the exclusion of certain lands from the Lease Renewal and leasing them by means of individual viharf- age leases, it should be noted that the City by not charging a fair rental value pursuant to said Chanter for wharfage leases may be in conflict with the duties imoosed upon the City by the public trust for commerce, navigation and fish- ery and the provisions of Article XIII, Section 25 of the • California Constitution. The City should follow the oper- ative standard in California that the State or its grantee will charge a fair rental value for the use of tide and submerged lands. There are, however, exceptions to this standard such as the statutory exception set forth in Sec- tion 6503 of the Public Resources Code which provides that • "no rental fee shall be charged [by the State Lands Commis- sion] for private recreational piers constructed for the use of a littoral land owner." This section does not apply to local entities and the County Counsel of the County of Orange suggests that it may not be constitutional. See Letter of County Counsel of County of Orange, I.Bay 22, 1970, • B -485, ( "it is our conclusion that the prohibition [Section 65031 if statutorily relevant, would be unconstitutional under Article XIII, Section 25 "). In determining what constitutes fair rental value is we urge the City to follow the practices of the State Lands iC, NOSSAMAN, WATERS, SCOTT, KRUECER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Seven Commission. The State Lands Commission has jurisdiction over all tide and submerged lands held by the State and has comprehensive regulations governing the leasing of such lands which provide generally for an annual rental of six percent (6o) of the appraised value of lands subject to lease. California Administrative Code, Title 2, §2005. We believe that this represents a reasonable standard, although the City may wish to set a higher or lower rate provided the rental does not fall belo;r a fair rental value. In setting • the rental the City should bear in mind the criteria set out in Cal. Ops. Atty. Gen. 50 72/47 IL at 35 (December 7, 1973): ". a Legislative grantee is not necessarily reeuired to lease lands for • those purposes [public trust related purposes] which ;rill return the highest rental or other economic return. Rather, the grantee's obligation is to adminis- ter the lands in such a way as, in its judgment, will best serve to promote the • statewide public trust purposes described in the granting statute." There are two additional matters to consider in determining the amount of rental pursuant to the Lease Renewal. The first is whether the Association's expenses in • providing lifeguard and maintenance services for the Leased Lands should be taken into account in determining the Associ- ation's rental and the second is the existence of any con- tract obligation or any non- binding agreement giving rise to a moral obligation of the City with respect to the amount of rental. • We doubt that the City can reduce or otherwise set the amount of rental based upon the expenses incurred by the Association. To do so may result in a gift of public funds in violation of Article XIII, Section 25 of the California • Constitution. In County of Alameda v. Janssen, 16 Cal. 2d 276, 281 (1940), the court stated that: "[i]t is well settled that, in determining whether an appropriation of public funds or property is to be • 11 NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORllw Dennis O'Neil, Esq. July 3, 1974 Page Twenty -Eight • considered a gift, the primary question is whether the funds are to be used for a 'public' or a 'private' purpose. If they are for a 'public purpose', they • are not a gift within the meaning of [Article 13, §253. [Citations omitted.] The benefit to the state from an expen- diture for a 'public purpose' is in the nature of consideration and the funds expended are therefore not a gift even • though private persons are benefited therefrom." See Cit of Oakland v. Garrison, 194 Cal. 29303 -304 (1924); Count of Alameda v. Janssen, 16 Cal. 2d 276, 2 2 19'+0 . • The Association's expenditures are primarily undertaken to benefit members of the Association who have the exclusive use of the Leased Lands. Although the public may indirectly benefit from the maintenance and beautifica- tion of the Leased Lands, the factual situation would sug- gest that this indirect benefit should not be sufficient to justify a reduction in the amount of rental. See People v. City of Long Beach, 51 Cal. 2d 875, 881 (1959), ( "• . . a grant in aid to a private organization is a 'gift' to and 'for the purpose and benefit of such organization within the meaning of the constitutional provisions even though the • organization is thereby enabled to promote some public purpose. "). Second, we are of the opinion that there is no contractual or moral obligation which would justify a rental lower than the fair rental value of the Leased Lands. After • reviewing those documents listed in the Chronology which the City has provided us, we have been unable to find any writ- ten contractual obligation or any non - binding agreement which would give rise to a moral, obligation on the part of the City which would justify leasing the Leased Lands, or any part of them, at less than their fair value. (See discussion below.) Even if there were a moral obligation, such an obligation, if honored by the City, in our judgment would result in a breach of Article XIII, Section 25 of the California Constitution as a gift of public funds in the '.0 • 0 NOSS -M AN, %VATFRS, SCOTT, Dennis O'Neil, Esq. July 3, 1974 Pa- ,o T-v,;enty -Nine .7 event the City acted on soch ob:L i ,?;ati on. Sec Veterans' ?^Iel- fare Board v. Riley_, 139 Cal. 159, 170 (1922), (tlie coint. stated that its "dcisions cons:iatently hold that an • appropriation of public funds based upon a moral oblitat:i_on as a Con.3iderat:bOn is a -if'u t4i _..C1 -i Tl the P. ?Canis ; of the Con- ; stitlit ion . . °). The alle:ed basis for such a co_itractual or norai obl.l gation is founded upon ti ?e events ocCitrr:inE. as Of the 1929 -1931 transaction whereby the City obtained title to Lettered Lots A -J' would obl:iga.te the City to lea,,,.,,- tP.te Leased Lands for less tht;.n tree fair rental value. (See co nsent of John P. Flsbach, Chronol.o .-y P. 32, that the Associat:i.on was to have a perpetual. 1ca.se in the nature of a continual reneiVal of the 1929 .ieaScts.) the Course of our inv— St.1gati -on into these everts, we ha +re been unable to find any facts - oh:i.ch would support the contention that the City should receive loss than fair 'rental value for the Leased Lands. `the 1929 -1.931 transaction appeals to have occurred because the City Council mould not approve the subdivision rrap of Lido Isle unCil an arran�;einent had been made to pre - Sei'VP T,ettered Lots as bea Ch,'ii. iJP.'d_UOri, PeV%, i, n (e °iU�°.IUS 23, 1928) . In order to pr @ ?3 @rVe the - -,ett: (2rOd Lois, J thc2y were deeded to the City and leased to the Association subject to uc;u restrictions. ( >ce A� >.Ire.e:ent dated. Septom- ber 14, 1928, between the City and. 'Title :Cnsurailce and Trust Company, executed by thcs' City only; a su.m: =na.ry of rJhich is con`ained in the Chronol.og;y. ) No oblitration to .rene:r the leases in perpetuity w could have existed because (a) the leases were for a primary term o_` 25 years with an option to e�,.tend for an additional 25 years and (b) the City could not have bound itself to lease for lon�o;er than 50 years because of restrictions to this effect contained in the 1929 Statutory Grant. Epstein v. Zahloute, 99 Cal. App. 2d 738 (1913). Thus, any obli- f;at.Lon '.,muld terminate at the end of 50 years both because of the a .-reemont and as a mattes of law. i,ioreover, it appears that the 1929 leases were terminated by the City in 1933 because the Association defaulted in payment of rental. Resolution No. 792 of the City Counc:i]. (June 5, 1933)- 1• 10 • NOSSAMAN, WATERS, SCOTT, KRUEGER \ MORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirty • G 1• Lease Renewal (12.45 acres) $ 3,566.18 $ 286.44 As shown on the table, the 1929 Leases provided for a higher rental and a higher rental per acre than the 1951 Lease. If rental for the Leased Lands were to increase as property values increase, as proposed by the Association, the base rental as contained in the 1951 Lease does not appear to be the appro- priate base rent. We recommend that the City determine the consideration to be paid in the lease based upon current fair market and rental values. Based upon the 1929 Leases, the City was never obligated for a period longer than 50 years and any obligations contained therein terminated upon termination of the 1929 Leases in 1933. In any event, the 1929 -1931 transaction involved only • approximately one -third of the Leased Lands; thus, the trans- action would not necessarily be relevant in determining the amount of rental for lands not subject to the 1929 Leases. In addition, the rental proposed by the Associa- tion for the Lease Renewal does not appear to be supported by the rental contained in the 1929 Leases. According to the Association in its letter to the City, dated October 4, 1973, the rental set forth in the Lease Renewal represents an adjustment in the rental contained in the 1951 Lease based upon the increase in property values from 1951. The • 1951 Lease contains the same rental as contained in a 1938 Lease which, except for one parcel, covered the same lands as proposed in the Lease Renewal. A comparison of the rental and rental per acre of the 1929 Leases, the 1951 Lease and the Lease Renewal is provided by the following table. • RENTAL RENTAL PER ACRE 1929 Leases $ 995.00 $ 248.75 (4 acres) • 1951 Lease $ 750.00 $ 60.24 (12.45 acres) G 1• Lease Renewal (12.45 acres) $ 3,566.18 $ 286.44 As shown on the table, the 1929 Leases provided for a higher rental and a higher rental per acre than the 1951 Lease. If rental for the Leased Lands were to increase as property values increase, as proposed by the Association, the base rental as contained in the 1951 Lease does not appear to be the appro- priate base rent. We recommend that the City determine the consideration to be paid in the lease based upon current fair market and rental values. • NOSSAMAN, WATERS, SCOTT, KRUEGER V RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirty -One 7 Based upon our review of the facts and applicable law there appears to be no justification for the City to receive less than the fair rental value for any of the Leased Lands. II a CALIFORNIA COASTAh ZO ?;E CONSERVATION ACT OF 1972 (§ §27000 et sec. of the Public Resources Code) • • Section 27400 of the Public Resources Code pro- vides that after February 1, 1973, "any person wishing to perform any development within the permit area shall obtain a permit authorizing such development from the regional commission . . . ." "Development" is defined in §27103 of the Public Resources Code as meaning: • ". on land, in or under water, the placement or erection of any solid mate- rial or structure; discharge or disposal of any dredged material or of any gaseous, liquid, solid, or thermal waste; grading, removing, dredgin;1g, mining, or extraction of any materials; change in the density or intensity of use of land, including, but not limited to, subdivision of land pursuant to the Subdivision Map Act and any other division of land, including lot splits; change in the intensity of use of water, ecology related thereto, or of access thereto; construction, reconstruc- tion, demolition, or alteration of the size of any structure, including any facil- ity of any private, public, or municipal utility, and the removal or logging of major vegetation ." • • • NOSSAMAN, WATERS, SCOTT, KRUECER R RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirty -Two With respect to determining whether an activity constitutes a "development ", Cal. Ops. Atty. Gen. 50 73/11 (Feb. 22, 1973), which reviewed the applicability of the • Coastal Act to oil field operations, stated that: it . . it would appear the question should be resolved by determining whether the activity requires the development of new or additional coastal zone .resources a or intensifies or substantially changes the present use of such resources." The Lease Renewal incor_oorat'es the uses listed in the 1951 Lease and there will not be any new or additional use or intensification of use of coastal zone resources pro - vided for by the Lease Renewal. In another sense, however, the Lease Renewal may be subject to the Act on the basis that there will be an additional use or a chance in use because the Lease Renewal will extend the effect of the 1951 Lease. • Because the Coastal Zone Conservation Act is of recent origin and because there is sufficient uncertainty as to whether the Lease Renewal is subject to the Coastal Zone Conservation Act's permit jurisdiction, we recommend that the City file for an exemption ;'rom the Coastal Act with the South Coast Regional Commission which could then reauest an opinion from the Attorney General on this matter. Alter- natively, the City could ask the State Senator or Assembly- man representing the City to request an opinion directly from the Attorney General. If the opinion were that the Lease Renewal was exempt from the Act, the Regional Com- mission would probably grant an exemption.. However, if' the • opinion were that a permit was rea_uired, the City would need to obtain favorable action of the Commission (and the State Commission if the matter were appealed) by a two- thirds vote. It should be noted that any additional use of or construction on the Leased Lands may be subject to the Coastal Zone Conservation Act. IC LJ • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN I• 1• 1a a u a • a a 0 Dennis O'Neil, Esq. July 3, 1974 Page Thirty -Three III CALIFORNIA ENVIRON'JENTAL W ALITY ACT OF 1970 (5 521000 et sea. of the Public Resources Code) Pursuant to Section 21151 of the Public Resources Code, "fa]ll local agencies shall prepare, or cause to be prepared . . . an environmental impact report on any project they intend to carry out or approve which may have a signifi- cant effect on the environment." A city council is char- acterizable as a local agency for purposes of the Environmental Quality Act. 515031 of the Administrative Code; see §21062 of the Public Resources Code; Friends of ammoth v. Board of Supervisors of Mono County, 8 Cal. 3d 247 (1972) which involved a 'board of supervisors. Public Resources Code Section 21065 defines "project" for purposes of the Environ- mental Quality Act to mean activities involving the issuance to a person of a lease. The Lease Renewal is subject to the requirements of the Environmental Quality Act on the basis that it is in fact a lease. Smith v. Arthur D. Little, Inc., 276 Cal. App. 2d 391, 401 (19 9). To satisfy the recuirements of the Act, the Newport City Council may consider preparing a Negative Declaration, in accordance with Title 14, Section 15083 of the California Administrative Code. This section provides that an environmental impact statement is not required if the City Counc.. 1 finds, based on an Initial Study, that a project will not have a significant effect on the environment. If the City Council so finds, a Negative Declaration would be an appropriate procedure to follow in satisfying the requirements of the Environmental Quality Act. It should be noted that any additional use of or construction on the Leased Lands may be subject to the Environmental Quality Act. • NOSSAMAN, WATERS, SCOTT, KRUEGER C RIORDAN • E Dennis O'Neil, Esq. July 3, 1974 Page Thirty -Four IV To summarize the points made in this letter: (1) The Lease Renewal with ditions; • (2) The leased tidelands t the tideland trust City has authority to enter into the the Association subject to certain con - Lease Renewal must limit the uses of the D those uses v.,lich are consistent with for commerce, navigation and fishery; • (3) The City should assume for the purposes of the lease that all of the Leased Lands are subject to the tideland trust because this will avoid the expense of an extensive engineering study tc qualify and quantify the various types of lands and comply with applicable case and statutory authorities which may impose restrictions on the • non - tideland portions of the Leased Lands. (4) It is advisable to find that the Leased Lands cannot be used for public purposes (assuming that to be the fact). I• (5) The lease may provide for the exclusive use of the Lea f sed Lands except: (a) Rights reserved in the 1919 Statutory Grant; I• (b) Reasonable access routes for the public; and (c) Any rights or interests disclosed in a current title report; • (6) The Leased Lands should be relatively small both in area and in effect. To this end, the City should eliminate from the Leased Lands those areas which are not available to all members of the Association. The lands so excluded could be leased on an individual basis. V, 10 • NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN Dennis O'Neil, Esq. July 3, 1974 Page Thirty -Five (7) The Leased Lands should be leased at the cur- rent fair rental value without deduction for the Association's maintenance expenses and without deduction for any alleged • moral obligation. (8) The California Coastal Zone Conservation Act may apply, and the Environmental Quality Act does apply, to the proposed Lease. • We trust the foregoing answers your preliminary inquiry on the subject. If you have any questions or desire any further advice on any point, please let us know. • • • • • • Respectfully submitted, Robert B. Krueger V of NOSSArAN, WATERS, SCOTT KRUEGER & RIORDAN See Contract File for Exhibit "1" to the Opinion Letter (Map Showing Area Leased to Lido Isle Association) C :7 u P'] J LA r 0 r 0 EXHIBIT B CHR04NOLOGY Date Chapter 494, Event October 16, 1897 By a patent for swamp and overflow lands, dated October 16, 1897, a portion of Lido Isle was conveyed by the State of California to James McFadden. July 25, 1919 Chapter 494, Statutes of 1919 (hereinafter referred to as "1919 Statutory Grant "), which granted tide and submerged lands within the boundaries of the City of Newport Bay (hereinafter referred to as "City ") to the City, became effective on July 25, 1919• The 1919 Statutory Grant provided: "SECTION I. There is hereby Granted to the city of Newport Beach, a municipal corporation of the State of California, and to its successors, all of the right, title and interest of the State of California Yield by said state by virtue of its sovereignty, in and to all that portion of the tidelands and submerged lands within the present boundaries of said city, and situated below the line of mean high tide of the Pacific ocean which border upon and are in front of the upland now, owned by said • '• 91 • • n • • • city and such other upland as it may hereafter acquire, to be forever held by said city, and by its successo_s in trust for the uses and purposes and u,,Don the express conditions following to wit: (a) Said lands shall be used by said city and by its successors solely for the establishment, improvement and conduct of a harbor and for the establAshment and construction of bulkheads or breakwaters for the protection of lands within its boundaries, or for the prote::t'_on of its harbor, and for the construction, maintenance and operation thereon of wharves, docks, piers, slips, quays, ways and streets, and other utilities, structures and appliances necessary or convenient for the promotion or accomodation of cor,.mcrce and navi- gation, and the protection of the lands within said city. And said city or its successors shall not at any time [;rant, convey, give or alien said lands or any port thereof to any individual, firm, or co;:pora.- tion for <.ny purpcses whatever; provided, t:zat said city or its successors may grant franchises thereon for a period not exceeding twenty -five ,years for wharves and other public uses and purposes, and may lease said lands or any part thereof for a. period not exceeding tiaenty -five years for purposes consistent a,,i.th the trust upon which said lands are held by the State of California and with the requirements of commerce or navi- gation at sa:i.d harbor. (b) Said harbor shall be improvcd by said city without exoenso to the state and shall always romain a public harbor for 2. 0 • all purposes of commerce and naviga- tion, and the State of California shall have at all times the right: to Use, without -charge, all '0:harvos. docks, pie's, slips, quays, and other :i I71p.Y'oVC'mentS constructed on said lands or any part thereof for any vessel. or other water craft or railroad ol:med or operated by the State of California. In the management, conduct 1923 W. K. Parkinson acquired Lido Isle in • 1923 and commenced dredging a portion of Newport Day and filling lands in and adjacent. to Lido Isle in order to create • a residential- co *nmc.rc5.al development on 1• Lido Isle. LThe Register, January 25, 1973.1 1927 Lido Isle was sold to William Clark CritteiIden :in 1.927 �,�ho, tog with real estate developer John P. Flsbach, plannad to develop Lido Isle into a 1• 3. or operation cf said harbor, or of any of the utilities, structures or appliances mentioned in paragraph (a) no discrimination i.n rates, tolls or charges, or in facilities for any use or service in connection therewith shall ever be niade, authorized or permitted by said city, or by its successors. The absolute rj�,ht to fish in the waters of said harbor with the riUht of convenient; access to said • water over said lands for purpose is hereby reserved to the people of the State of California." 1923 W. K. Parkinson acquired Lido Isle in • 1923 and commenced dredging a portion of Newport Day and filling lands in and adjacent. to Lido Isle in order to create • a residential- co *nmc.rc5.al development on 1• Lido Isle. LThe Register, January 25, 1973.1 1927 Lido Isle was sold to William Clark CritteiIden :in 1.927 �,�ho, tog with real estate developer John P. Flsbach, plannad to develop Lido Isle into a 1• 3. • Jules <9, 1927 • I• 1• 1• I• I• I• • conTiunity patterned a.Pter Venice, Italy. As part of the sale, Title Insurance and Trust Company (hereinafter referred to as "T.l. ") became the holder of the legal title in trust; of Lido Isle. Chapter 70, Statutes of 1927 (hereinafter referred to as 11192( Statutory Grant "), which granted ce ^tain tide and submerged lands within Newport Bay to the City became effective on July 29, 1927. The 1927 Statutoi °y Grant provided: "Theme is hereby granted to the city of Hetirport F3each, a municipal corporation of the State of California, and to its successors, all of the right, title and :interest of the State of California held by said state by virtue of its sovereignty, in and to all of the tidelands and submerged lands bordering upon, in, and under Newport 'bay, situated below the line of mean higiz tide of the Pacific ocean not heretofore granted to said city or to the county of' Orange, i;o be forever held by the city of Newport Beach and by its successors in trust for the uses and purposes and upon the express conditions following, to wit: (a) Said lands shall be used by said city and by its successors solely for the establishment, improvement and conduct, of a harbor and for t.be es tabl:isi';:ent and construction of bulkheads or- breakwaters for the protection of land:,, within its boundaries, or for the protection 4. • n • n • • • • • of its harbor, and for the construction, mainten;lnce, and operation thereon of whar�,,es, doc�-s, Piers, slips, quays, ways and streets, and other utilities, structures and appliances neces,,ar,y or convenient for the promotion or acconzraodation of coiiiraerce and navigation, and for the protection of the lands within said city. And said city or its successors shall not at any time grant, convey, give or alien said lands or any part thereof to any individual, firm, or corporation, for any purpose iahatever; provided, that said city or its successors may grant franchises thereon for a per.Lod not exceeding; twenty -five years for wharves, and other public uses and purposes, and may lease said lands or any past thereof for limited periods, in any event not to exceed twenty -five years for any and all purposes which shall not; interfere. with or nav5.gati.on, and are not inconsistent with the trusts upo_7 which said lands are held by the State of California or with t -ie requireinents of comi�ierce or navigation at said harbor. (b) Said harbor shall be improved by said city without expense to the state and shall always reiria.in a public harbor for all purposes of commerce and navi- gation, ar.d the State of California shall. have at al-1 times the i,iiht to use, without charge, all wharves, docks, piers, slips, quays and other 1-mprovei7ent constructed on said lands or any part thereof for any vessol or other water craft or railroad owned or operated by the State of California. (c) In the management, conduct, or operation of siil(a harbor or any 5• 0 • • �7 I• 1• 1• 1• I• 1• I• of the utilities, structures, or appliances mentioned in paragraph (a) no discri.rnina.tion in rates, tolls, or charges or in .facilities for any use or service in connection therewith shall ever be wade, authorized or permitted by said city, or by its successors. The absolute right to fish in the waters of said harbor with the right of convenient access to said water over said lands for said purpose is hereby reserved to the people of the State of California." May 25, 1928 In a judgment, dated Miay 25, 1928, by the Superior Court of the State of California in and for the County of Orange in City of ]dew_ort Beach v. Title Insurance and Trust Comoan•y (Case No. 23689), the "line of ordinary high tide of the Pacific Ocean in Newport Bay" (hereinafter referred to as "Decree Line ") was set around Lido Isle. The judgment of the court stated that lands landward of the decree line "belong to defendant Title Insurance & Trust Company" and that the lands bayt•.ard of the decree line were "tidelands and submerged lands and that the City of Newport Leach is the owner of said 6. • • tidelands and submerged lands under and by virtue of the provisions of the [1927 Statutory Grant]." As a result of • Chapter 142, Statutes 1929, effective August 14, 1929, the Decree Line, together with lines set by other cases, was • "established and declared to be the line of ordinary high tide in those portions of Newport bay and the arms thereof set • forth in said decrees, and it is hereby further declared that the grants of tidelands heretofore i.iade by the State • of California to the city of Ne,;rport Beach included all tidelands whether filled or unfilled bordering said line • of ordinary high tide above described and said grants are hereby confirmed upon the same conditions and for the • same uses as in said grants specified." Aug ust 1928 (a) The subdivision map for the • development of Lido Isle, which was submitted for final approval, was discussed in August 1928 by the City Council. The I• 1• 7. • I• primary issue reviewed in connection with approval was whether six street ends (Contiguous to the bay) would be • dedicated to public use by the developer. At one session of the Council held in August 1928, the debate was summarized • as follows: • "Councilman Claire said that six street ends had been promised, that access to the water was impor- tant and that if' the city later had 1• I• 8. "City Engineer Patterson, after, examining the map presented, said he understood certain street • e ends were to be dedicated to the city, but Conz.elman [architect in charge of Lido Isle] stated that the present plans provided for using these as community centers for the Island o:,,ners. Patterson • i insisted that the city should have access to the water while Conzelrnan contended this could be done by granting easements to care for installation of public utilities. • * * * X. "Tlayor Johnson then wanted to know what became of the first map presented to the, board and in which the stater,ent was made that there • w would be more public beach on Lido Isle than in all. of Newport and Balboa. a � "Councilman Claire said that six street ends had been promised, that access to the water was impor- tant and that if' the city later had 1• I• 8. • • to condemn street ends it would be expensive." [NowspasLr article, probably from the Newport News, dated August 1.6, 19TU-: • (b) At another meeting of the City Council held _in August 1923, the debate was summarized as follow, =s: • "Considerable discussion has been indulr;ed over the acceptance of the Lido ma.p by the city council, which insists that at least six street ends be dedicated to the • public. At a special meeting of the counc`l iIjonday night, the map was again held up until. the changes as asked by the council. had been made. "The position of the develop- ers, has been that the enM.re beach should belong to the Community association and that the street ends should be left as beach rather than paved Isnd therefore not acces- • sible to the public, claiming this exclusive feature would aid in ma king the l :sle the distinctive project. desired. "The council feels that the • public should not be denied the beaches, wh"Ch, they say, are being all too rapidly absorbed by private interests." [Ne'„port 3 ews, dated August 23, 1927J -- • September 7, 1928 (a) The sabdivisi.on map was approved by the City Council on September 7, 1928, as the result of the following • compromise: 1. 9. i• • "Lots at end of each street will be deeded to the city, also some lots in the center of the Isle, vrhich it is planned to plant with shrubbery. The Lido Isle • association wish to control the planting so that a uniform appear- ance il'.ay ce had. In return for deeded property, the city agrees to lease the Isle to the developers over a period of fifty years at a • rental of $1002 per year. The power to end the lease at any time if provisions are broken, will rest with the council.." [Newspaper article, probably from the Newport News, dated September 13, 1927.-T— • (b) The subdivision map that was approved, Map of Tract No. 907, recorded in Book 28, Pages 25 to 36, of miscel- laneous Iv?aps in the Official Records of the County of Orange (hereinafter referred I• to as "Subdivision Map "), contained a certificate executed by T.I. which stated: "G7e hereby certify that we are • the o,raners of, or interested in the land included within the subdivision shown on the annexod map and that we are the only persons whose consent is, necessary to pas, a • clear title to said land and we consent to the making of said map and subdivision as shown within the colored boarder.li.ne and hereby dedicate to the public use all Is 1 • 10. • :7 I• 1• I• iIL 7 Iw it Vias, Stradas, Piazzas, Avenue and Alleys shown on said map within said subdivision and grant and dedicate to the City of Newport 13each Easements over those strips and parcels of land delineated on said map and designated thereon for storm drainage and public utility= purposes." The Subdivision Nap also contained a certificate executed by the City Clerk stating that the City Council ( "Board of Trustees ") app; °oved on September 7, 1928 and "accepted on behalf of the public for highway purposes the Vias, Stradas, Piazzas, Avenue and Alleys shown upon said map and therein offered for dedica- tion as public highways ". The Subdivi- sion Map conta:_ned designations of those areas classified as Vias, Stradas, Piazzas, Avenue or Alleys. The Subdivi- sion Heap also depicted sixteen lettered lots, lots rahich were desiS- na.ted by the letters A to P. lettered Lots A to J were located at intervals around Lido Isle, adjacent to Nev!port Bay, with Lots A and I consisting, of several lots 0 11. • • connected by promenades running along the bay. Lettered Lots K to P were interior lets generally located in the • Piazzas; it was planned that these interior lots .-could contain shrubbery. Lettered Lots A to J were shown on the • Subdivision i +iap as subject to four -foot wide easements "to the City of Newport Beach for storm drain purposes, and • public utilities." These four -foot corridors extended through the center of each of the Lettered Lots A to J in a • direction toward the bay. The prome- nades of Lots A to I Giere also shown as subject to easements for public utilities. • Lots A to J were not designated as "Vial," "Stradas," "Piazzas," "Avenue" or "Alleys" on the Subdivision Map. • September 14, 1928 In an Agreement, dated September 14, 1.928 (also dated September 7, 1928) between T.I. and the City, executed only • by the City, it was agreed that: ". . . upon the recordation of said sub - division ;nap and of the said • 12 ;I u '• • 0 • Declaration of Protective Restric- tions, Conditions and Reservations, [`P.I.] will grant and convey to [City] the said lots bearing letters A to P bo,;h inclusive, by a Grant Deed or Deeds . . . and that said [City] does hereby agree to accept said prol:aerty and simultaneously therewith to enter into leases covering each of the said lots frith the Lido Isle Community Association A recital clause in this Agreement stated that the leases were, to be "for a period of twenty -five ,years with the option to extend the period for an additional twenty -five years ." December 10, 1928 The Declaration of.' Protective .estricti_ons, dated November 20, 1928, by T.I. with respect to Lido Isle was recorded on Decemhcr 10, 1928 in Book 228, pages 1 et sect., in the Official Records of the County of Orange. The Declaration provided for a "Zone 101" which con- sisted of "Lots numbered 'A' to 'P' both inclusive heret.ofo.re [emphasis added] deeded to the City of Newport Beach." With respect to uses within Zone 0, the Declaration provided that: 13 • • "No structures shall be erected in this zone except band stands, comfort s'- rations, recreational structures or other structures for the use, welfare and benefit- of the communi.ty and the public, and on all such :logs or building sites havinh Bay frontage the structures must be so erected and maintained that free access to the waters of the Bay and the Beach shall at al], times be ava:ila'bl.e to the residents of the community or the public. "Setbacks. "No structure shall be erected over any easements reserved to the City of Newport Beach in the map of record." January 4, 1929 By a Corporation Grant Deed, dated January 4, 1929, T.I. granted the City Lettered Lots A to P, "[s]ubject to easements, conditions, restrictions and rights -of -way of record" (hereinafter referred to as "Lett=ered Lot Deed "). The Lettered Lot Deed was accepted by the City Council on -lay 20, 1929, and a copy of the deed was recorded on May 22, 1929, in Book 281, page 108, in the Official Records of the County of Orange. January 1.0, 1.929 By a letter from T.I. to Orange County Title Company (t�ereinaftcr referred to is 1 • 14. C7 • as "Orange Title "), dated January 16, 1929, the Lettered Lot Deed was trans- mitted with the instructions that "[y]ou • are authorized to record this Deed, accepted by the City of Newport Beach, when you can deliver to us executed Leases on each [of the Lots A to P]." March 4, 1929 (a) By sixteen leases, dated March 4, 1929, executed by the City and the • Lido Isle Community Association (hereinafter referred to as "Association "), the City agreed to lease to the ;association • Lettered Lots A to P. (b) The Lease for Lot A, which is illustrative of the other° fifteen leases, • provided that Lot A was leased to the Association "subject: to easements, conditions, restrictions and rights-of- way of record, together with any accretions that may now be attached or shall hereafter attach themselves to said property, to the line of ordinary hit;` 1 tide of the Pacific Ocean, wheresoe -r the same may is 1 • 1.5. • IC 1• • • • • J be located in front of said Lot W." The term of the Lease was tvventy -five years and at the option of the Associ- ation the term could be extended for an additional twenty -five, years. The Lease further provided that the Association "may, but it is not required to do so, erect upon said demised premises at its own expense, any building or buildings, comfort stations, boat landings, floats, or may abut wharves and piers to said property, and generally to develop and improve said property as may in its discretion, from time to time be deemed advisable." Another term of the lease stated that the City had the "right of ingress and eiress to, from and over said premises for any purposes which it may require in case of public peril or necessity in the performance of the duties required by it as a municipal corporation. . . ." The rental for the lease of Lot A was $200.00 per year. • 16. • 7 The rental for the Lettered Lots varied; for example-, the rental for Lots K to P, the interior lots, was set at $1.00 per year per lot. June 10, 1929 (a) By a Quitclaim Deed, dated Juno. 10, 1929, accepted by the City • Council on June= 10, 1929 and again on May 25, 1931 and recorded on June 2, 1931 in Book 479, in the Official • Records of the County of Orange, the /Association quitclaimed to the City property which consisted of a ten -foot • wide corridor through each of the Lettered Lots A to J, which corridors ran from the Vius to the exterior line of 'Tract • No. 907 and additional corridors running alon' the promenades and smaller lots of Lots A and 1. The ten -foot, wide corridors • did not appear to overlap with the four - foot wide corridors which were dedicated • to the City by the Subdivision Map for purposes of drainage and public utilities. • • 17. • (b) In a memorandum, undated, found in the files of the City, it is stated with respect to this conveyance • by the Association that: "Those 16 parcels of land were quit - claimed to the city for the purpose of constructing public • improvements under the 1911 Street Improvement: Act. The quit - claim deed ti:as accepted by minute resolu- tion of "lie City Council on June 10, 1929, and the Public ld Cemphasis added.] were named in the • Resolution of Acceptances. The quit claim deed was recorded January 3rd, 1931 in Books 479, page 469, Official Records of Orange County. In this connection, a Minute Reso- lution was passed by the City • Council on iNay 2 >, 1931 accepting the quit claim deed but not naming the Public Ways," June 1.0, 1929 (a) By a Deed of Confirmation, I dated June 19, 1929, accepted by the City Council on June -10, 1929 and recorded February 26, 1930 in Book 361, Pape 113, in the Official Records of the County of Orange, T.I. confirmed the dedication of easements to the City for purposes of • drainage and public utilities by virtue of the recordation of the Subdivision Map. l8, • • • (b) By a Deed of Easement for Street Purposes, dated June 10, 1929, and the United States Bulkhead Line. In I• • 19. accepted by the City Council on June 10, • 1929 and recorded February 26, 1930 in Book 361, pa .ge 110, in the Official Records of the County of Orange, T.I. • granted an easement for street purposes to the City. In a memorandum, undated, found in the files of` the City, it is • stated that this easement deed "covers parce7.s . . . which were used for. con- struction of approach to Lido Isle and • water pipe ling." (c) By a Quitclaim Deed, dated June 10, 1929, accepted by the City • Council on June 10, 1929 and recorded February 26, 1930 in Book 361, page 1.11, in the Official Records of the County of • Orange, T.I. quitclaimed to the City small corridors, bet:aeen ten to twelve feet in width, between the exterior • boundary of Lettered Lots F, II, I and J and the United States Bulkhead Line. In I• • 19. • • a memorandum, undated, found in the files of the City, it is stated with respect to this quitclaim deed that the • deed covered four parcels which were "for the construction of pleasure piers on the northerly [side] of Lido Isle." • August 14, 1929 Chapter 574, Statutes of 1929, amending the 1U 1919 Statutory Grant and the 1927 Statutory Grant, became effective on August 14, 1929. C] • 20. "SECTION 1. The city of Newport Beach, and its successors, is hereby authorized to ;rant fran- • chiles fo: a period not exceeding fifty years for -�rharves and other public uses and purposes, and to lease for a period not exceeding fifty years for purposes consistent with the trust upon which tidelands • are held by the State of California and v;ith the requirements of commerce or navigation, upon, or of, all, or any part of, the tidelands heretofore granted to the city of 1dc,rport Beach under the provisions of an • act entit ?.ed 'An act -ranting certain tidelands and subr7er ,ed lands of the State of California to the city of Newport Beach, upon certain trusts and conditions,' approved 'gay 25, 1919, and under �• the provisions of an act entitled 'An act grantint certain tidelands j and submerged lands of the State of C] • 20. iK1 I• 1• July 18, 1930 1• r October 18, 1930 • May 18, 1937. • California to the city of Newport Beach 'auort certain trusts and con- ditions,' approved April 5, 1927, any limitation of the period of ,years of such franchises and leases, contained in either of said acts, to the contrary not;Athstanding," In a letter from. Orange Title to T.I., dated July 18, 1930, Orange Title stated that, after reviewing; their files, it found the Lettered Lot Deed, executed by T.I., and because of the existence of this deed, it requested instructions from T.I. In a letter frct:i T.I. to Orange Title, dated October 18, 1930, it was stated that T.I. had been informed that the City was prepared to complete the escrow and deposit with Orange Title certain leases. In a letter from T.I. to Orange Title, dated May i8, 1931, the following infor- mation was set forth: "The above order number re- lates to an escrow started by this Company to cover our Deed to the City of Newport Beach for Lots 'A' to 'P' inclusive, of Tract No. 907, 21. • • l• May 21, 1931 I• May 22, 1931 • KI r� May 25, 1931 June 6. 1931 �0 0 L7 • Lido Isle, a part of said escrow being; the return to us of leases executed by the City of Newport Beach and the Lido Isle Community Association. This escrow was started in January, 1929.but has never been completed." By letter from Orange Title to T.I.., dated i'ay 21, 1931, Orange Title advised T.I. that Orange Title had possession of the leases covering the Lettered Lots. In a letter of instruction from T.I. to Orange Title, c.ated May 22, 1931, Orange Title laas instructed },,,rith respect to the Lettered Lot Deed that it was "authorized to record this Deed . . . when you can deliver to us executed Lease [sic] on each of the [Lettered Lots]." The City Council accepted, for the second time, the Lettered Lot Deed. By a letter. fro °r Orange Title to T.I., dated June 6, 1931, the sixteen leases covering the Lettered Lots were trans- mitted since escrow had closed. As part of the close of escr•o.v, the Lettered Lot Deed vaas recorded on June 6, 1931, in 22. I• • Book 487, par,(? 180, in the Official Records of they County of Orange. June 5, 1933. . By Resolution No. 794 the City Council • on June 5, 1933, resolved: "Ths.t upon the Lido Isle Com- munity P.ssoci,ation, a California corporation, quitclaiming to the • City of Ne:vport Beach all of its right, title and interest in and to all that certain real property here inaftex° described, that said Agreements of Lease [covering the Lettered Lots], from and after the • acceptance of said Quitclai.ni Deed by the City of Nevwport Beach, shall be terminated and declared of no further force or effect for any purpose whatever • The recital clauses in the Resolution stated: "WHT'j"AS, the Lido I;31e Community Association has ;wholly failed to • pay any of.' the rents in said Agreements of Lease provided for, and has not paid any part; or portion thereof, and are now vrholly in default under the ter °ms and conditions of said Agreements of Lease; and • "WHEFEAS, the Lido Isle Com- munity Association has Offered to release to the City of Nerwport Beach all of its right, title and interest in and to the propcerty covered by said Agreements of Lease, In order tlia.t the same may i• • �3. • August 24, 193E I• IC7 1• 1• November 4. 1938 ,• J • n • be terminated and declared of no further force or effect for any purpose whatever." In a memorandum, undated., found in the files of the City of Dlewport, it was stated: "Quit Claim Dead dated August 24, 1934 from the Title Insurance and Trust Company to the City of Newport Beach and accepted by the City Council on October 29, 1934. This covers parcels A, E and F which are tide lands on the north side of Lido Isle and between the westerly end of Lido Isle and the main land. This property was secured by the city in connection with the harbor improvements of 1934. The total cc;t of the property was $7,000. Of this amount tho Griffith Company paid $2,500." In a letter, dated November 4, 1933, from the Association to the City Council, the Association applied to the City "for a lease on all the tidelands, submerged lands, swaap and overflow lands and abutting uplands [in the Lido Isle area described in the form of lease attached to the letter]." 24 ,• • November 21, 1938 By a letter, dated 1ovember 21, 1938, a revised form of lease was transmitted to the City by the Association. • December 5, 1938 An Agreement of Lease, dated December 5, 1938, was executed by the City and the Association (hereinrlfter referred to as • "1938 Lease "). (a) `.['he lands covered by the 1938 Lease were divided into five lettered • parcels. Parcel A consisted of "[a]11 those certain tide lands, submerged lands, swaeip and over- flo::' lands in • Newport Bay," which were lands �3arround- ink; Lido Isle ten feet, in width "parallel to and adjacent to and baytirard of the United States Governuuent Bulkhead Lines;" a large portion of these lands were located bayward of the Decree Line. Parcel B • contained "those. certain uplands abut - tin; on tidelands, submerged lands, swamp and overflow lands, as described • in Parcel 'A' ", which consisted of a strip of land approximately 50 feet wide • • 2 `5 • • adjacent to and landward of the Bulkhead Line running parallel to Lido Channel and of Let .-eyed Lots A, E, F, G, H, I • and J. Excepted from Parcel B were "all easements for public utilities, street lighting, :storm drains and public ways • opened or dedicated for public purposes as of records." According to a map, dated September 25, 1927, of Leeds and • Barnard, Consulting Fngineers, snowing the "Property of Title Insurance and Trust Company," the 50 -foot wide strip �• of land was loaa.ted bayward of the "Line of Fill." The map :indicates that Lettered Lots E and F were located bayward of the • survey line of the State swamp and overfloi %z patent of 1897. Parcel C consisted of "[a]ll those certain • tidelands, subrierged lands, swamp and over -flow lands in Newport Bay," which lands were in a triangular shape located • between Lettered Lot B and Lettered Lot D parallel to and landward of the Bulk- head Line and baycaa_rd of the Decree • ?G. • k• Line. Parcel ll contained "uplands" u i• 0 J consisting of Lettered Lots B, C and D, which abutted the lands described as Parcel C. Excepted from Parcel D were Hall easements for public utilities, street lighting, storm drains and public ways opened or dedicated for public purposes as of record." Lettered Lot C and portions of Lettered Lots B and D appear, according to the September 25, 192`7 map, to be located bayward of the survey line of the State swamp and over- flow patent of 1.397. The last parcel, Parcel E, consisted of a strip of land adjacent to the mainland across from Lido lisle near the turning basis where West Lido Channel and Lido Channel. intersect. (b) The 1938 Lease stated in a recital clause that: ". . . in the judgment of the City Council of the City of Newport Beach the use of the tide lands and uplands abutting thereon . . . [described in the lease] for in- dustrial. uses, „oulci be inin cal to . the best iae; gists o1' said city, for the reason that Newport Harbor in said City has been developed, 0 2(. i• �• improved and dredged as a pleasure harbor and not a harbor to be used for industrial purposes . , 0 0 28. ". . . it is the present intention that the tidelands and uplands abutting thereon, owned by said city, shall never be used for industrial purposes, and shall be kept for park, recreational, rosi- dential and educational purposes; 0 ". . . it is the judgment of the City Council of the City of Newport Beach that the leasing; of said lands `Hereinafter described, to the Association . . . is not inconsistent with the trust imposed upon such portion of the lands hereinafter described, which :nay constitute �idelands or harbor frontage under the General Lamas and Constitution of the State of Cali - fornia, and . . . it is further the judgment of the City Council of the 40 City of Newport Beach that the uplands hereinafter described cannot be used without the tide- lands, nor can said tidelands be used without the uplands abutting thereon, and it is further the judgment of said City Council that the leasing of the whole of said lands hereinafter described as one parcel_ is necessary for the proper development and use of said lands, water frontage and tidelands, for recreational, residential and educational purposes ." 0 0 28. f• Ir (c) The 1938 lease was for a term Association "shall have the r:i.trht at all C7 • 21 of 25 years and provided that the leased • lands were to be used for recreational, educational and civil purposes. The consideration for the lease was $750.00 • per year. With respect to including additional lands within the leasehold, the 1938 Lease provided: • "It is specifically understood and agreed between the parties hereto that if any ways, streets or rights of way are vacated by said • city, and said trays, streets or rit11-ts of way are located on any of the above desc,,A -bed premises, then and in such an event said streets, ways and rights of way shall auto- matically be included within the • descr.iption of the real property herein, demised, and shall become a part and parcel of this ].ease, and it is understood and agreed, that it is contemplated that certain side- walks, ways and rights of way on • the above described real property shall be vacated in the manner provided for by law, and that said Association shall. pay all the expenses of said vacation proceed- ings, upon demand." • The 1938 Lease contained a covenant by which the City covenanted that the Association "shall have the r:i.trht at all C7 • 21 I• • times during the term of this lease, to quietly and peaceably hold, possess, use, occupy and enjoy said leased land ,• and premises." April. 1, 1940 By Resolution No. 1781, dated April 1, 19140, the City Council resolved and • ordered that certain property on Lido Isle be. closed up and abandoned. This property primarily consisted of those • corridors the Association conveyed to • 30. the City by the quitclaim deed, dated June 10, 1.929. The Resolution stated • that the abandonment; was pursuant to the "Street Opening Act of 1889." This act, repealed in 1.963, provided that: • "Whenever the public interest or convenience riay require, the city council of any city shall have full power and authority to order the . . . closing up in whole or in • part of any street ." 1 The Act; defined the term "Street" as in- cluding "square, .lane, alley, court and • place." The corridors through the Lettered Lots A to J were, designated as "places" by the City. • • 30. described as Parcel E in the 1951 Lease, which acre the same lands designated. as Parcel E in the 1938 Lease, was revised • by deleting from the lease those lands contiGuous to the mainland and includinZ; lands contiL;uou<� to the Lido Isle bridge • to the mainland, l�rhich lands were pri- marily baywa : -d of the United States Bulkhead Line arid the Pierhead Line. • • 31. May 31, 1951 By a letter dated May 31, 1951, the Association requested the. City Council to conoider cancelling the 1938 Lease • and entering into the same form of lease for an additional period of 25 years. Tune 11, 1951 An Agreement of Lease, elated June 11, • 1951, executed by the City and the Association (hereinafter referred to as "1951 Lease ") provided fox, the lease of the same lands under the same terms as the 1938 Lease, except: that the 1951. Lease was to expire on June 10, 1976. • March 22, 1951 In an A;reement, dated ; "March 22, 1954, executed by the City and the Associa- tion, the description of the lands described as Parcel E in the 1951 Lease, which acre the same lands designated. as Parcel E in the 1938 Lease, was revised • by deleting from the lease those lands contiGuous to the mainland and includinZ; lands contiL;uou<� to the Lido Isle bridge • to the mainland, l�rhich lands were pri- marily baywa : -d of the United States Bulkhead Line arid the Pierhead Line. • • 31. n i 1958 (a) In a conversation betv;een John P. Elsbach, the early devc -doper of Lido isle, and Bunster Creel.y, held on March 25, 1958, Elsbach stated that he had "asked for a 99- ye,j.r lease [in 1.928], and the Council assured me that • such was not necessary because the lease would be, automatically renewed upon expiration and that it would be leased i to the Lido Isle Comrrrunity Association forever. It was on this understanding, this assurance, that we gave there the property " (b) In a conversation among R. L. Patterson, the City 'Engineer in 1928, • Creely and others, Patterson stated that: "The City Council objocted to i the proposed me -hod of the aui)-- divide- con!,rollinr the lots [lettered lots] fronting on the Bay front; and they requested that the subdivj.de�r deed as public streets the lettered lots, so as to guar- antee the r=ight, of access by the inside lots to the water front." L • 32. • i• 1• 21 . ID • • "The City Council felt; that they could guarantee the perpetual use of these lots to the inside lot owners so as to provide access to the waters of Iicwport Bay for the reason that there was no guarantee to the .inside lot owners that the association would not dispose of the lettered lots and as a further possibility that the /Association might cease to exist, and in that case the City was in a position to fully guarantee the use of the lots by the inside lot owners for access to the waters of Newport Bay." July 28, 1958 In a title re_oort, issued by T.I., dated as of July 28, 1958, covering Lettered Lots A to P, the .following was set forth: "Vestee" "CITY OP NEWPORT BEACH, a municipal corporation, in trust for the benefit of the community and the public under the provisions as set forth in Declaration of Restric- tions, recorded December 10, 1928 in Book 228, page 1, Official Records. "EXCEPTIONS: "5. An easement for ingress and egress in favor of the public over said land, as shown on the map of Tract No. 907, recorded in Book 28, pages 25 to 36, inclusive, of Miscellaneous Maps; also private 3 I � easements for ingress and egress in favor^ of the ol. ^Iners of the lots in said Tract No. 907, such easements having been acquired under convey- ances of lots by reference to said map. "6. The effect of a resolu- tion dated Au ril 1.7, 1940, recorded in Book 1045 page 73, Official Records, by the City Council. of Newport Beach, purporting to vacate portion=s of lots A to J, inclusive, as streets, as described therein." March 23, 1.959 By an Amendment to Lease, dated March 23, 1959, executed by the City and the Association, the 1951 Lease was amended as follows: "The paragraph of said lease reading: IPURPOSE: For the sole _our - pose of using said Lands for recroat:i.onal, educational and civil purposes.' is amended to read: ' PiJRPOSBS : For the sole • purpose. of' using; said lands for recreational, educational and civic purposes. Association agrees that at all times during the period of this lease it shall keep said property in a. clean and sanitary • condition, and may, but it is not requir( =d to do so, erect upon said demised prenisos at its own expense any marinas, boat landings, play - grounds and floats, or may abut I• 0 31 . i• • March 19, 1973 October 4, 1973 4 q • wharves and piers to said property, and the uses and purposes herein set forth are not to be deemed a limitation of the uses and purposes to which Association may nut, said property but are indicative of the character of the improvements to be erected, or the uses and purposes to which.; the property may be put.'" In a letter, dated March 19, 1973, from Thomas R. Malcolm, representative of the Association, to the City, it was requested that the City renew the 1951 Lease for an additional twenty -five year term. By a. letter, dated October 4, 1973, from Wilbur D. Layman, representative of the Association, to the City, a form of Re- newal. of Lease Agreement was transmitted. This document prov_dcd for the renewal of the term of the 1951 Lease for twenty - five years from the date of the .renewal and further provided that: "The .rent shall be the sum of $3,556.1.8 per year payable annually in advance . . . The rent here- under shall be adjusted at the end of each five -year period so that the rent payable for each year during each succeeding five -year, period will be adjusted as follows: 0 35. • • Multiply the initial rent hereunder ($3,566.18) times the total assessed value of all property on Lido Isle for the tax year immediately prior to the year in which the adjustment • is to take effect: and divide that product by the total. assessed value of all property on Lido Isle for the taxable year 1972 -1973. All other provisions of the [1951] Lease are hereby incorporated by ref - 'Ah erence herein and made a part hereof." I• C 1• 1• I• 36. •