HomeMy WebLinkAboutC-2726 - Commercial Tideland Rental Rate AppraisalI
CITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
(714) 644 -3005
TO: FINANCE DIRECTOR
FROM: CITY CLERK
DATE: February 16, 1989
SUBJECT: Contract No. C -2726
Description of Contract Professional Services Agreement for
Commercial Tideland Rental Rate Appraisal
Effective date of Contract December 12, 1988
Authorized by Minute Action, approved on December 12, 1988
Contract with George Hamilton Jones Inc
Address 717 Lido Park Drive
Newport Beach CA 92663
Amount of Contract (See
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Wanda E. Raggio
City Clerk
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Attachment
3300 Newport Boulevard, Newport Beach
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Mr. Dave Harshbarger
Marine Department
City Hall
P.O. Bo;, 768
Newport Beach, CA 92658 -8915
Dear Mr. Harshbarger:
Re: City of Newport Beach
Commercial Tideland Rental Rate
Appraisal Fee Estimate
In accordance with your request we have reviewed the scope of work required
for the preparation of an appraisal setting out our opinion of the current fair rental
value of certain city tidelands currently devoted to commercial usage within lower
Newport Harbor. This review was made for the purpose of judging an appropriate
fee for the appraisal work involved.
It is our understanding that under Article XIII Section 29, of the State
Constitution, the city must charge a fair and reasonable rental rate for these tideland
parcels which are devoted for commercial purposes.
Commercial use is considered to be that use which is basically commercial in
nature, including. but not limited to the rental or leasing of piers and slips to boat
owners, or their use in conjunction with retail outlets, yacht brokerages, offices,
boatyards, fuel docks, private docks, etc.
We have considered that a reasonably current survey of the physical properties
involved, prepared by your staff, will be available for our review and verification.
The inventory will be subject to revision upon our field inspection. A similar
appraisal report was prepared for the city on September 7, 1977 by this office.
We will follow a similar format, but, of course, update all physical, legal and
economic conditions to their current status.
GEORGE HAMILTON. JONES, INC.
APPRAISAL CONSULTANTS
GEORGE HAMILTON JONES, MAI
717 LIDO PARK DRIVE
TELEPHONE
WILLIAM R. HANSEN
NEWPORT BEACH, CALIFORNIA 92663
17141673 -6733
RUSSELL C. BARON, MAI
STUART D. DuVALL
KENT HARVEY
November 21, 1988
Mr. Dave Harshbarger
Marine Department
City Hall
P.O. Bo;, 768
Newport Beach, CA 92658 -8915
Dear Mr. Harshbarger:
Re: City of Newport Beach
Commercial Tideland Rental Rate
Appraisal Fee Estimate
In accordance with your request we have reviewed the scope of work required
for the preparation of an appraisal setting out our opinion of the current fair rental
value of certain city tidelands currently devoted to commercial usage within lower
Newport Harbor. This review was made for the purpose of judging an appropriate
fee for the appraisal work involved.
It is our understanding that under Article XIII Section 29, of the State
Constitution, the city must charge a fair and reasonable rental rate for these tideland
parcels which are devoted for commercial purposes.
Commercial use is considered to be that use which is basically commercial in
nature, including. but not limited to the rental or leasing of piers and slips to boat
owners, or their use in conjunction with retail outlets, yacht brokerages, offices,
boatyards, fuel docks, private docks, etc.
We have considered that a reasonably current survey of the physical properties
involved, prepared by your staff, will be available for our review and verification.
The inventory will be subject to revision upon our field inspection. A similar
appraisal report was prepared for the city on September 7, 1977 by this office.
We will follow a similar format, but, of course, update all physical, legal and
economic conditions to their current status.
Mr. Dave Harshbarger
Page Two
November 21, 1988
A date of value of January 1, 1989 will be employed.
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It would be of assistance if you could notify as many of the permittees that you
can that we are carrying out this study. We feel it is important that we give them an
opportunity to discuss with us any factors they feel are pertinent to the rental value
estimate.
I have attached a list of definitions which will form the basis of the value
estimate. If you believe changes in these definitions are in order, please let me
know.
The report shall be prepared in quintuplicate.
While the ultimate time requirement to complete this assignment cannot be
precisely estimated until the inventory is verified, it is my judgment that the total
fee shall not exceed $45,000.
Fees will be based on an hourly basis as follows and submitted monthly:
George H. Jones, MAI: $170.00
William R. Hansen: $115.00
Kent Harvey: $75.00
Jean McClinton: $45.00
If authorized by December 1, 1988, the reports will be submitted on or before
April 1, 1989, subject to any unforeseen delay in completion of the inventory.
Thank you for giving this office consideration on this matter. Please let me
know your decision as soon as convenient so that we may set up our schedule
accordingly.
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Enclosure
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Respectfully
oiies MAI
• •
GENERAL
Purpose:
The purpose of the report is to render an opinion of the current fair
rental value of those certain City tidelands parcels within lower Newport
Harbor, which in joinder with privately owned adjacent uplands, are being
employed to commercial usage. This estimate is made to assist in the
establishment of a Harbor Permit- Commercial Rental Rate which is consistent
with the requirements of the prevailing tidelands grant statutes.
Definitions:
Tidelands:
For the purpose of this study, tidelands are considered to consist of
that water area extending from the established U.S. Bulkhead Line to
either the Pierhead Line or Project Line, depending upon the location of
the existing pier and floats within said area.
Commercial Harbor Permit Fee:
Harbor permit, in this valuation, is considered to be equivalent in
practical application to that of a lease with a fixed rental rate over a
specified term.
Fair Rental Value:
For consistency with the State Land Commission's Administrative
code, Title 2, Division 3, as amended, this report considers fair rental
value to be 9% per annum of the fair market value of subject tidelands
parcels. Harbor Permit Rental is considered synonymous with fair rental
value.
Revaluation:
Fair rental value, or Harbor Permit Rental Rates, will be considered
to be fixed for a period of 5 years, at which time, a review of fair rental
value may be carried out by the City.
Rental or Fee Payments:
First year's rental shall be paid in advance; rentals for the following
years shall be paid no more than 15 days after the beginning of each
following year.
GEORGE HAMILTON JONES, INC.
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CITY OF NEWPORT BEACH
February 14, 1989
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
Marine Department
Mr. George Hamilton Jones
Appraisal Consultants
717 Lido Park Drive
Newport Beach, California 92663
Dear Mr. Jones
The City Council, on December 12, 1988, approved the Professional
Services Agreement with you by accepting your proposal dated November
21, 1988, regarding a commercial tideland rental rate appraisal fee.
I have asked Mr. Wynn, the City Manager, to sign a copy of your pro-
posal and this will constitute the Professional Services Agreement.
If you have any questions, please feel free to contact me at (714)
644 -3044.
Sincerely,
z ��f -
David Harshbarger
Marine Director
DH:la
3300 Newport Boulevard, Newport Beach
December 12, 1988
TO:
FROM:
SUBJECT:
Recommendation:
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CITY OF NEWPORT BEACH
Marine Department
MAYOR AND CITY COUNCIL
Marine Director
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Agenda Item No. F.3.a
CIr;
DEC 121988
COMMERCIAL TIDELAND RENTAL RATE APPRAISAL/
PROFESSIONAL SERVICES AGREEMENT
If desired, approve a Professional Services Agreement with George
Hamilton Jones, Inc. for the preparation of an appraisal setting
the current Fair Rental value of City Tideland parcels devoted to
commercial usage within Newport Harbor, and authorize the City
Manager to execute the Agreement.
Discussion:
The Newport Beach Municipal Code Chapter 17.33 PIER FEES requires
that harbor permittees using tidelands for commercial purposes pay
to the City a fee established by resolution for the use of these
tidelands.
The ordinance is based on ARTICLE XIII, SECTION 25 of the
California Constitution, which requires the City to charge a fair
and reasonable rental rate for those tideland parcels which are
operated for commercial purposes.
The City Council Harbor Permit Policies, Section 12 FEES states,
in summary, that commercial piers over City tide and submerged
lands are subject to an 8 1/2 cent per square foot of permit area
fee. The fees imposed pursuant to this policy shall be adjusted
by appraisal every five years. The adjustment in the pier permit
fee shall be based upon an appraisment of fair rental value of
said tidelands prepared by a qualified, independent M.A.I.
appraiser. The valuation shall include consideration of the
unique characteristics of Newport Harbor, wherein the publicly
owned tideland area subject to this fee must be joined with
privately owned uplands to form an economically feasible
commercial usage.
The 1988 -89 Fiscal Year Budget contains an appropriation in the
Marine Department Budget Object 16, Services Professional and
Technical, for an appraisal of Commercial Harbor Permit Fees
estimated at $50,000. The Marine Department has contacted George
Hamilton Jones, Inc. and has discussed the scope of work required
for the preparation of an appraisal, setting out their opinion of
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the fair rental value of certain City Tidelands devoted to
commercial usage in the lower Newport Bay. Mr. Jones estimates
the appraisal of approximately 60 commercial properties will be
completed on April 1, 1989, with a fee not to exceed $45,000.
Fees will be based on an hourly basis for Mr. Jones acting as
principal, and for assistant appraisers, and statements will be
submitted monthly for payments.
Attached is a letter dated November 21, 1988 from George Hamilton
Jones, Inc., reference their appraisal fee testament.
David Harshbarger
Marine Director