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HomeMy WebLinkAbout2012-98 - Setting Rent for Commercial Uses; AMENDED See 2013-88; See 2012-91 and 2012-92RESOLUTION NO. 2012 -98 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH SETTING RENT FOR COMMERCIAL USES LOCATED UPON TIDELANDS WHEREAS, pursuant to the 1978 Beacon Bay Bill; as amended, ( "Beacon Bay Bill ") the City of Newport Beach ( "City ") acts on behalf of the State of California as the trustee of Tidelands located within the City's limits, including Newport Harbor; WHEREAS, Section 1(b) of the Beacon Bay Bill authorizes the City to allow third - parties to use the Tidelands for commercial purposes for a term not to exceed fifty (50) years; WHEREAS, the City allows commercial Tidelands uses to operate upon the Tidelands under either a permit or a lease; WHEREAS, the Beacon Bay Bill, California Constitution Article 16, Section 6, Newport Beach Municipal Code ( "NBMC ") Section 17.60.060(D), NBMC Section 17.60.020(E), and City Council Policy F-7(D) require the City to receive fair market value Rent from third parties using the Tidelands; WHEREAS, NBMC Section 17.060.060(D) vests the City Council with the exclusive discretion to determine fair market value Rent based upon the findings of a City - selected appraiser; WHEREAS, an appraisal report by Rasmuson Appraisal Services, and an appraisal report by Netzer & Associates, were prepared and delivered to the City and have been reviewed and considered by the City Council, which reports are part of the record for this matter; WHEREAS, the Council Ad Hoc Committee on Harbor Charges ( "Committee ") and members of the Committee held public outreach meetings with commercial Tidelands users to solicit their input and participation in the Tidelands review process and these meetings afforded the public the opportunity to comment on this matter as well as provided the public information relating to this matter; WHEREAS, the City Council has considered all documents and comments in the record in connection with this resolution; -1- WHEREAS, all previous resolutions and actions regarding the fair market rent for commercial Tidelands uses that are in conflict with the Rent established by the City Council in this resolution are hereby repealed. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1: The Recitals provided above are true and correct and are incorporated into the substantive portion of this resolution. Section 2: The City Council finds pursuant to NBMC Section 17.60.060(D), that the Rent provisions contained in the attached Commercial Tidelands Rent Calculations, which is incorporated by reference, provide for the charging of fair market value Rent and that the rental rate (and adjustments) in the attachment constitute fair market value Rent for commercial Tidelands uses, which findings are made by the City Council in its exclusive discretion but are based on the information in the appraisals of its City- selected appraisers and, in addition, on other testimony and documents in the record for this matter. The City Council further finds and determines the Rent for commercial Tidelands uses located upon City managed Tidelands, operating under an annual permit or a lease, shall be set in accordance with the attached Commercial Tidelands Rent Calculations. Section 3: The Rent charged under this resolution for Shipyards and complimentary guest slips, not associated with a restaurant, is for less than fair market value. The City Council specifically finds that the charging of less than fair market value Rent for these uses promotes public recreation facilities and marine services to the general public and furthers the policies and objectives of the Tidelands Grant. Charging less than fair market value Rent for these uses allows for continued operation and improved accessibility to the public. Thus, the charging of less than fair market value Rent for these uses of the Tidelands is a matter of state -wide concern that benefits the citizens of the State of California. Pursuant to City Council Policy F-7(E)(6), the City Council further finds that the charging of less than fair market value Rent promotes the goals of the City to further marine related services and activities. Section 4: The City Council finds the setting of Rent for commercial Tidelands uses is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Alternatively, the City Council finds the setting of Rent for commercial Tidelands uses is entitled to a Class 1 Categorical Exemption pursuant to CEQA Regulation Section 15301 because the Rent contemplates the continued use of existing facilities, with no expansion of the proposed -2- use. Further, the City Council finds the setting of Rent for commercial Tidelands uses is entitled to a Statutory Exemption pursuant to CEQA Regulation Section 15273(a)(1) because the fair market value Rent established by the City Council will be used to meet operating expenses within the Tidelands. Section 5: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional. Section 6: This resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 13" day of November, 2012. Nancy Gardn Mayor 7b ATTEST: e Leilani I. Brown, City Clerk Attachment: Commercial Tidelands Rent Calculations -3- Commercial Tidelands Rent Calculations Commercial Tidelands Uses (1) Fuel Docks shall pay as fair market rent the greater of Base Rent at Fifty Cents ($0.50) per square foot of the Premises, as adjusted pursuant to this resolution, or One and One Half Cents ($0.015) per gallon of fuel pumped and sold annually for every gallon up to and including One Hundred Thousand Gallons (100,000) or Two Cents ($0.02) per gallon for every gallon of fuel pumped and sold annually over One Hundred Thousand and Gallons (100,000). (2) Shipyards shall pay as Base Rent Fifty Cents ($0.50) per square foot of the Premises, as phased in and adjusted pursuant to this resolution. (3) Home Owners' Associations ( "HOK) which provide slips for the exclusive use of its members, shall pay as fair market Base Rent One Dollar and Two Cents ($1.02) per square foot of the Premises, as phased in and adjusted pursuant to this resolution. In the event an HOA rents slips to non - members, depending upon the size of the Premises, the HOA shall pay fair market Rent for those slips equal to the "Large Commercial Marina Rent" or "Large Commercial Marina Rent Alternative" as established by Resolution No. 2012 -92, or any successor resolution, or the Small Commercial Marina Rent established by this resolution. Depending upon the Rent applicable to, or selected by, a HOA, the HOA shall be subject to all of the applicable terms accompanying the Rent (e.g., audit, etc.). (4) Yacht Clubs shall pay as fair market Base Rent the "Large Commercial Marina Rent" or "Large Commercial Marina Rent Alternative" as established by Resolution No. 2012 -92, or any successor resolution. Depending upon a Yacht Club's Rent selection, the Yacht Club shall be subject to all of the applicable terms accompanying the selected Rent (e.g., audit, etc.). Yacht Clubs shall pay as fair market Rent for complimentary Guest Slips Fifty Cents ($0.50) per square foot of the Premises, as phased in and adjusted pursuant to this resolution. (5) Small Commercial Marinas shall pay as fair market rent for use of the Premises, seventy -five percent (75 %) of the "Large Commercial Marina Rent" or "Large Commercial Marina Rent Alternative" as established by Resolution No. 2012 -92, or any successor resolution. If a Small Commercial Marina elects to pay rent according to the "Large Commercial Marina Rent Alternative" methodology, the Base Rent provided in Resolution No. 2012 -92 shall be applicable to the Small Commercial 10 Marina without any reduction in square footage costs. Depending upon a Small Commercial Marina's Rent selection, the Small Commercial Marina shall be subject to all of the applicable terms accompanying the selected Rent (e.g., audit, etc.). (6) Unless otherwise provided in this resolution, a commercial Tidelands use which provides complimentary (free of charge) public access slips to the general public shall be exempt from the payment of Rent to the City for use of the Premises occupied by the complimentary public access slips. (7) A Vessel Rental Facility shall pay as fair market Base Rent One Dollar and Two Cents ($1.02) per square foot of the Premises, as phased in and adjusted pursuant to this resolution. (8) A Sport Fishing Charter business shall pay as fair market Base Rent One Dollar and Two Cents ($1.02) per square foot of the Premises, as phased in and adjusted pursuant to this resolution. (9) Restaurants shall pay a fair market Base Rent for its Guest Slips at the rate of One Dollar and Two Cents ($1.02) per square foot of the Premises, as phased in and adjusted pursuant to this resolution. (10) A Vessel Charter Business shall pay as fair market Base Rent One Dollar and Two Cents ($1:02) per square foot of the Premises, as phased in and adjusted pursuant to this resolution. (11) Any commercial Tidelands use not covered by this resolution, or another resolution, shall pay as fair market Base Rent One Dollar and Two Cents ($1.02) per square foot of the Premises, as phased in and adjusted pursuant to this resolution. (12) To the extent a Premise contains two (2) or more commercial Tidelands uses, the Rent shall be apportioned according to the use and the Premises occupied by the use (i.e., if half (1/2) of a Premises is operated as a Vessel Rental Facility and the other half (1/2) as a Small Commercial Marina the half (1/2) of the Premises used as a Vessel Rental Facility shall pay the applicable Vessel Rental Facility rent and the half (1/2) operated as a Small Commercial Marina shall pay the applicable Small Commercial Marina rent). Periodic Adjustments of Base Rent And Phase In Base Rent for commercial Tidelands uses provided by this resolution, shall be phased in and adjusted pursuant to the Marina Index provided in Resolution No. 2012- -5- 92, or any successor resolution. For illustrative purposes, the Base Rent phase in and adjustment shall be as follows: Fifty Cent ($0.50) Base Rent Phase In Table and Adjustment One Dollar and Two Cent ($1.02) Base Rent Phase In Table and Adjustment e e e e W13 26f4 e e e e e 5 0.36 $ 0.36 $ 0.50 $ 0.51 $ 0.52 5 0.51 $ 0.54 S 0.55 Assumed Rental Patel $ 0.501 $ 0.501$ 0.51 $ 0.52 $ O.Si S 0.54 $ 0.55 Previous Years Rent $ 0.361$ 0.50 5 0.51 I $ 0.52 $ 0.51 5 0.54 Differenc. (A) "Charge in 2013 $ 0.14 1 $ 0.01 i $ 0.0115 (0.01) 5 0.03 5 0.01 $ 0.141$ 0.01 1 $ 0.01 $ tow) Increase for Year (A /8) 0.20 $ 0.25 5 0.24 5 (0.01)T$ 0.05 $ 0.03 Increase for Year (A/8) Polly Phased -in at 2034 otter 31 -20i8 I Hartcnvid- -2015 Appraisal l_3 Notes: This example illustrates that the Assumed Rental Rate can change every year - up or down. Phased -in by 2014 in this illustration. One Dollar and Two Cent ($1.02) Base Rent Phase In Table and Adjustment M e e a e ia e• a IW WA W/A 2M 9M vi 2019, $ 0.36 $ 0.36 5 0.56 5 0.81 5 1.05 $ 1.04 $ 1.09 5 1.13 Assumed Rental Rate $ 1.02 $ 1.02 $ I. 5 1.05 5 1.04 $ 1.09 $ 1.13 Previous Year Year's Rent 5 0.36 $ 0.56 $ 0.81 i $ 1.05 $ 1.041 $ 1.09 Difference (A) wo Change in 2033 $ 0.66 5 0:48 $ 0.24 $ (0.01) IS 0.05 5 0.03 $ 0.20 $ 0.25 5 0.24 5 (0.01)T$ 0.05 $ 0.03 Increase for Year (A/8) Hartcrvade AFcraisal .Fully ?haled :n at2015 a er31 -2018 This example illustrates that the Assumed Rental Rare can change every year - uo Notes: or dovm. Phased -in by 2016 in this illuscranon. M Definitions Unless otherwise provided, the terms provided in the Newport Beach Municipal Code ( "NBMC ") shall apply to this resolution. The singular of any term also includes the plural. (1) Base Rent and Rent, unless otherwise provided, means the annual fair market rent charged on a square footage basis for the use of the Premises. (2) Fuel Dock means a facility that provides fuel (e.g., gasoline, diesel, oil, etc.) to vessels. (3) Guest Slip means a "slip ", as defined in NBMC Section 17.01.030(0)(8), or any successor statute, that is provided, with or without charge, for the use of the patrons while visiting the business. (4) Home Owners' Association ( "HOA ") means an organization of homeowners of a particular residential subdivision, condominium or planned unit development. (5) Premises means those Tidelands which are subject to the applicable permit/lease and are more particularly described and depicted in the applicable permit/lease, excluding any Private Waterways and improvements. (6) Private Waterways means privately owned submerged lands. (7) Shipyards means "marine sales and services, uses and vessels" as defined in NBMC Section 17.01.030(J)(5), or any successor statute. (8) Small Commercial Marina(s) means a "marina" as defined in NBMC Section 17.01.030(J)(3), or any successor statute, which occupies less than fifteen thousand square feet (15,000 so of Tidelands and Private Waterways. (9) Sport Fishing Charter means a business that charters vessels for use by seven (7) or more persons to sport fish outside of Newport Harbor. (10) Tidelands means certain tidelands and submerged land (whether filled or unfilled), located in the City of Newport Beach, County of Orange, State of California granted to the City of Newport Beach, as trustee, by the State of California, pursuant to the Tidelands Grant.. -7- (11) Tidelands Grant means uncodified legislation related to the State of California's grant of certain rights in the Tidelands to the City of Newport Beach, including, without limitation, the Beacon Bay Bill (Chapter 74 of the Statutes of 1978, as amended [citations omitted]). (12) Vessel Charter Business is a business that provides a vessel (including professional captain and crew) which has been hired or leased by the owner, directly or through an authorized representative, to any person for a voyage in exchange for the payment of money, the receipt of something of value, or the forgiveness of a debt. (13) Vessel Rental Facility(ies) means a person that rents or leases vessels to another person for a period of less than twenty -four (24) consecutive hours in exchange for the payment of money, the receipt of something of value, or the forgiveness of a debt. (14) Yacht Club(s) means an organization operating from a fixed location, comprised of a private membership, and principally engaged to promote, coordinate or facilitate boating and yachting. IR STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2012 -98 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 13th day of November, 2012, and that the same was so passed and adopted by the following vote, to wit: Ayes: Hill, Rosansky, Curry, Selich, Henn, Mayor Gardner Noes: Daigle IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 14" day of November, 2012. A6 l r City Clerk Newport Beach, California (Seal)