HomeMy WebLinkAbout05/08/1978 Item #SS9CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
May 8, 1978
STUDY SESSION NO. 9
TO:. MAYOR AND CITY COUNCIL
FROM: City Manager
SUBJECT: Iu
Beacon Bay is situated on the southerly side of Harbor Island
Drive and the newly created Promontory Bay development in the City.
There are three lots which are situated on the westerly side of Harbor
Island Road, the balance of the parcels on the east side of Harbor Island
Road. The subject land is subdivided into 73 residential lots, of which
27 are bay front and 45 are interior hone sites, with one being utilized
for recreational use. The shape of the lots are irregular, but generally
they are from 40' to 50' in width and from 90' to 100' in length. At-
tached, you will find a copy of a map showing Beacon Bay property.
• The land, vested in the City of Newport Beach, is under a
thirty -eight year lease to J. A. Beek, et al, which was entered into
on January 9, 1950, and is to expire on December 31, 1987. The individual
lots are under sublease by J. A. Beek, et al to various owners with common
expiration date with the master lease. Structural improvements range
from five to thirty years of age and are both one and two stories. All
lots are presently improved. Twenty -two of the bay front lots are com-
pletely or partially tidelands and twelve interior lots are completely
or partially tidelands. Attached, as Exhibit "A ", you will find a sum-
mary of the Beacon Bay lease.
For approximately ten years the City has been receiving requests .
from the sublessees for a renewal of the lease, which is to expire in
1987. The City has been unable to enter into meaningful dialogue with
either the master lessee (J. A. Beek, et al) or the sublessees because
of the existence of tidelands. Simply stated, before meaningful negotia-
tions could be commenced the question of residential use on tidelands
had to be addressed. Permanent residential use of tidelands is an un-
authorized use. A number of bills have been introduced, none of which
succeeded until Assemblyman Ron Cordova's AB 1422 was introduced. This
bill was signed into law by Governor Brown several weeks ago. Attached,
• you will find a copy of this bill. This bill and its impact and implica-
tions will be verbally discussed with the City Council during the study
session of May 8th.
The motivitation for the City to support AB 1422 was 1) empathy
for homeowners and 2) potential increase in revenues to the City. In
fiscal year 1976 -77 the City of Newport Beach, for these nineteen acres,
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received $14,154.86. This revenue consists of $9,726.50 derived from
residential use. The residential lease amounts vary from a low of
$121.00 per year to a high of $531.00 per year per lot. $4,428.36 was
derived from commercial use, known as the Balboa Yacht Basin. The
Balboa Yacht Basin is improved with the following: --
1. Marina, containing 166 slips.
2. 56 storage garages
3. 7 apartments
4. Marine hardware store and ship yard,
5. Restaurant
6. Yacht brokerage office.
The entire Balboa Yacht Basin operation is under one sublease to the
Irvine Company, the California Recreation Company. All of the subleases,
both residential and commercial, expire on the same date as the master
lease, December 31, 1987.
Attachments (3)
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CITY OF NEWPORT BEACH
OFFICE OF THE CITY ATTORNEY
SUMMARY OF CITY'S 13EEK - BEACON BAY LEASE
GENERAL INFORMATION
Parties to _Lease City of Newport Beach, Lessor
J. A. Beek, Carroll B. Beek, Barton Beek and
Joseph Allen Beek, Jr., jointly as Lessee
Date of Lease January 9, 1950
City Council Approval Original Lease 37554 Januar 9, 1950
_es. No Date adopted
Sub Lease Assignment of Balboa Yacht Basin to
Irvine Co. 7/12/71
Land Location Bayside Drive
Source of City's Title Deed from Irvine, dated 4/13/28, and S. C. Case
No. 24026
Approximate Area 19.00 acres Frontage
Water Street
2,363.62' 1,378.16'
LEASE DURATION No. years: 38
From: January 1, 1950, to December 31, 1987
LEASE PROVISIONS
Rental "Westerl Portion ": Annual rental for first 13
years of term, $6UO.00 cash, plus 5% of all gross
returns to Lessee from use thereof, from whatsoever
source, including income from subtenants, payable
on January 15 of each year, beginning January 15,
1951, and ending January 15, 1963.
"Easterly Portion ": Annual rental for first 13
years of term, 350.00 cash, plus 7',% of all gross
returns to Lessee from use thereof, from whatsoever
source, including income from subtenants, payable
on January 15 of each year, beginning January •
15, 1951, and ending January 15, 1963.
In addition to above rents, Lessee to pay Lessor
$1,000.00 annually during the first 13 years of
said term, due on January 15 of each year, beginning
January 15, 1951, and ending January 15, 1963.
For the last 25 years of the term,. 33 1/3% of all
gross returns to Lessee from use of both portions,
from whatsoever source, including income from all
subtenants, payable January 15 of each year, begin-
ning January 15, 1964, and ending January 15, 1988.
Purpose:
"Westerly Portion" for residential purposes; "East -
erly Portion" for industrial uses, construction and
maintenance of wharves, docks and piers.
Repairs:
Lessor not obligated to make any improvements, re-
pairs, or other expenditure respecting the leased
property.
Assicnebility:
Lessee not to assign or sublet any of the "Easte
Portion" except to present subtenants without
written consent of Lessor; subtenants of "Easter
Portion" may let r
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SUMMARY OF CITY'S .BEEK
- BEACON BAY LEASE (Continued)
II1. LEASE PROVISIONS Continued
Renewal:
No provision.
Terns of default:
Upon default by Lessee, continuing for 30 days
after notice, Lessor may terminate lease, such
default not to affect subtenant provided sub-
tenant pays yearly payments provided in his sub-
lease.
Taxes:
Lessee to uay all taxes, assessments and levies
of every kind and character against the demised
land or improvements.
Insurance:
No provision therefore,excent Lessee to hold
Lessor harmless from all claims, etc., by reason
of Lessee's use of the premises, except those
growing out of use of streets, sidewalks, alleys,
docks, piers, or public utilities belonging to
Lessor; and Lessee to hold Lessor harmless from
litigation, etc., arising from use of premises
by Lessee or any sublessee.
SUMMARY OF CITY'S BEEK - BEACON BAY LEASE