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Home My WebLink About05/09/1994 Item #35TO: FROM: 6Y111`lm CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY MEMORANDUM May 4, 1994 Mayor Clarence Turner Members of City Council Robert H. Burnham AGENDA #35 ` y,� MAY 9 t99u Proposed Legislation Regarding Terrace Apartments Balboa Bay Club/Terrace Apartments In 1985, as the City and the Balboa Bay Club were negotiating a lease extension, the State Lands Commission advised us they considered the Balboa Bay Club parcel to consist of state tidelands. State Lands staff presented some documentation to support their claim, but the documentation was not conclusive. The City had long assumed the parcel consisted of tidelands and uplands with the Terrace Apartments located on uplands. According to State Lands staff, permanent residential or apartment uses are incompatible with the public trust inherent in tidelands. The parties had nearly concluded lease negotiations and resolution of the tideland issue would have required lengthy litigation or time consuming legislation. Accordingly, the City and the Balboa Bay Club agreed that there would be no permanent residential use of the property subsequent to December 31, 1998 unless, prior to that date: "a determination is made through the legislative, judicial or other appropriate process that said permanent residential apartments are legally proper uses on the leased premises." (1986 Lease - paragraph 30) The Staff had long assumed that Senator Marian Bergeson who has a good relationship with the State Lands Commission, would be the best person to carry legislation to resolve the dispute. Since Senator Bergeson will not be in a position to carry such legislation next year and with the time running out for submittal of legislative proposals this year, Staff hurriedly prepared draft legislation and asked Senator Bergeson to reserve a spot for the Bill. Aside from my efforts to determine State Lands position on the proposed legislation, Staff has taken no action pending Council approval. I have attached a copy of the proposed legislation with changes suggested by Councilwoman Watt shown in strikeout, underlined text. uc�J) Memo to May Turner 5/4/94 page two The proposed legislation is similar to the Beacon Bay Bill and would free the Terrace Apartment site from restrictions inherent in tidelands. Revenue derived from the Terrace Apartments would continue to go into the Tidelands Fund. The intent of the legislation is to allow, but not require, the Terrace Apartments to continue to be used for residential purposes. Staff is aware that some members of the public would prefer the elimination of the Terrace Apartments upon expiration of the current lease and the proposed legislation would not prohibit the Council from taking such action. According to Bay Club representatives the cost of converting the Terrace Apartments to a hotel would exceed $20,000,000 and the City would lose substantial revenue during conversion process. Major modifications to the terms and conditions of tenancy could significantly increase the vacancy rate and also reduce City leasehold revenue. Resolution of the tideland dispute relative to the use of the Terrace Apartments will satisfy the terms and conditions of the 1986 Lease, give the Council greater flexibility with respect to the use of the property, and allow the City to receive the maximum rental income (under the 1986 lease) until such time as the Council decides the most appropriate use for the site. Robert H. Burnham City Attorney RHB:kct Terrece.mem Revised 5/4 U UNCODIFIED STATUTE The people of the State of California do enact as follows: SECTION I The legislature makes the following findings and determinations: (a) By virtue of the provisions of Chapters 74 of the Statutes of 1978 (Beacon Bay Bill) the legislature conveyed certain tide and submerged lands, in trust, to the City of Newport Beach for various purposes, but primarily for the promotion and accommodation of commerce, fishing and navigation. (b) Certain portions of these tide and submerged lands have been filled and reclaimed as a result of a plan of improvement including the development of a harbor facility. In addition to the filled tide and submerged lands identified in the Beacon Bay Bill, the following additional parcel has been filled and reclaimed (Parcel D). (c) Parcel D has been fully developed, leased, and is producing income to support the statutory trust pursuant to which the tide and submerged lands are held by the City. and, emeept for LLQ ..duetle f i_r.ee Parreel- D the-publ4e tmst inherent imide -aged -submerged laudss (d) Parcel D is hereby freed of the public trust for navigation, commerce and fishing and, until such time as it is restored to less developed or beach use, may continue to be used for those purposes set forth in the existing lease between the City and the Balboa Bay Club, but shall continue to be held in trust by the City of Newport Beach subject to the other terms and provisions of this Act and the laws applicable to the tide and submerged lands. Parcel D shall be held subject to the condition that revenues derived from the leasing or administration of Parcel D shall be used as provided in this act. G present use €eir the-preduetien of ineeme te-premete the publis tvast is in the best interest ef the peeple ef the States Section II Notwithstanding any provision of the Beacon Bay Bill or other law, the public trust inherent in tide and submerged lands is hereby removed from Parcel D, and Parcel D may be used for such purposes as will produce the maximum revenue for the fund created pursuant to this Act, or the use of property on January 1, 1994, provided the City complies with the following: (a) The consideration received by the City for any lease of Parcel D shall be the fair market rental value of the real property and the improvements existing as of January 1, 1994 subject to any lease advantage held by the current tenant. (b) The form of any lease of Parcel D, and the range of consideration to be received by the City, shall be approved by the State Lands Commission prior to the approval of any future lease or re-leasing. (c) All money received by the City from the existing or future lease of Parcel D shall be deposited in a City tideland fund with the revenue used only for purposes consistent with the promotion of the public trust over the remaining tide and submerged lands granted to the City. ChaAmod.doc , CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY May 9, 1994 TO: Mayor Clarence Turner Members of the City Council FROM: Robert H. Burnham RE: Proposed Legislation Terrace Apartments/Tidelands Dispute Agenda #35 ------------------------------------------- The Balboa Bay Club Ad Hoc Committee met on March 6, 1994 to discuss the progress of the environmental document and legislation that would temporarily remove public trust restrictions on the Terrace Apartment portion of the Bay Club parcel. The Committee voted to recommend Council support of the legislation with the amendments suggested by Councilmember watt subject to the following conditions: 1. That the State Lands Commission either support, or take a neutral position on, the proposed legislation; 2. That City is not asked to exchange any land or funds in consideration for the proposed legislation. Staff will promptly agendize the proposed legislation in the event either of these conditions are not satisfied or there is a substantive change in the Bill. Very truly yours, Obert H. Burnham City Attorney RHB:kct May00MM.509 "RECEIVED AFTER AGENDA PRINTED:" \3S kD& RECEtV'O MARK EvANs 9 199"t qry M9K qTY F ,f;:' tC 26, 1994 ee pl OkpH Jite Oj"OttOKapf�LLezww, , g JIULIK6 pp -l2 l of Jig, CityOf OVLp #Ml BLa �v�L✓rtben. of Iiss Clty Coulzall J? cl. B. 1768 O VLcvJiatt B..A CaLifazTua 926§S-fig15 l�Lat efMayoL: Sr L lhplOSLd CLyislati a 412 RL9atd t0 fLLLin9 tfw JotppxaaL lfq#amimznil at tf. 13Z6oa Bay L1G Gbom ti.ar/.arcd TL1t/LiatlOnl wolAld ITL a Ila%d[(� #fU6 fa, LOLtyoYLL aOYLaL1C/2Ld if it i1 f1RSid JprL At fm ¢ vocsion. A/lna#ie "az.-4, as wLLL al loss a f `Wlda im t4, al//ty, ane m" issaei f%zut Sfzaafd not 9L OVLt100R1C1. J tequzLt that pa #/La�nlLtlu psa##Ot I i i1131.L. -qfLLL it ii 1,#mtani to 9, wLll ULLYL9 Of OWL fait City. G itzazxLCy' Cl V,atAL 3�. CVana 31 Bafriva Cavo q CN,W#mt B,,A CoT A}"tR}-ECEIVED AFTER AGENDA WALTER B. GERKEN 700 NEWPORT CENTER DRIVE I1 Jai NEWPORT BEACH. CALIFORNIA 92980 spy � Ks�a eeWW"EKw May 5, 1994 The Honorable Clarence J. Turner Mayor of the City of Newport Beach and Members of the City Council 3300 Newport Boulevard P.O. Box 1768 Newport Beach, CA 92658-8915 Dear Mayor Turner and Councilmembers: As a member of The Balboa Bay Club since my family moved to Newport Beach in 1972, I write in support of the proposed legislation that would take the Club's Terrace Apartments out of tidelands and permit the Club to continue to operate them as a residential facility. I believe the continuation of the apartments is better for the City than the building of a hotel with 350 or more rooms. Sincerely, Walter B. Gerken cc: Beverly Ray "RECEIVED AFTER AGENDA PRINTED:" ,35� May 7, 1994 Harold 'Buck" Ayres 2037 Vista Cajon Newport Beach, CA 92660 The Honorable Clarence J. Turner Mayor of the City of Newport Beach and Members of the City Council 3300 Newport Boulevard PO Box 1768 Newport Beach, CA 92658-8915 Dear Honorable Clarence J. Turner; I have been a Newport resident since 1949 and have been in business here for 36 years, as well as a long time member of the Balboa Bay Club almost since its inception. I understand because of the State Tidelands Commission and the position that they have taken regarding the Club's Terrace Apartments, it would seem that the City would stand to lose considerable income. Therefore, I very strongly urge the City Council to push through legislation that would take the Balboa Bay Club's apartments out of Tidelands and would continue to let them operate as a residential facility. This would be a win win situation for both the City and the Balboa Bay Club. Since , Harold ' uck" Ayres "RECEIVED AFTER AGENDA PRINTED:" -3 DONALD W. KILLIAN, JR. ATTORNEY AT 1AW 610 NEWPORT CENTER DRIVE, SUPTE 700 NEWPORT BEACH, CALIFORNIA 92660 (714) 760-1712 FAX (714) 759-3637 May 6, 1994 The Honorable Clarence J. Turner Mayor of the City of Newport Beach and Members of the City Council 3300 Newport Boulevard P.O. Box 1768 Newport Beach, CA 92658-8915 Ladies and Gentlemen: This is to urge you to support legislation that will free Balboa Bay Club's Terrace Apartments from the effect of the State Tidelands Bill. The process of upgrading the Bay Club so as to maximize the City revenues therefrom has been long, expensive and largely unproductive. The conversion from apartment to hotel use would result in the further and substantial decrease in revenues to the City and/or other problems along the Coast Highway and the neighborhood of the Bay Club. DWK:sb Thanks for your consideration. Yours truly, � 1 /DONALDW.:AN Albert J. Auer & Associates REAL ESTATE DEVELOPMENT k et "RECEIVED AFTER AGENDA t'Y.. PRINTED:" J1 - May S May 5, 1994 City Council City Hall 3300 Newport Boulevard Newport Beach, CA 92660 Dear Council Members: It is my understanding that at your meeting on Monday, May 9th you will be reviewing the proposed legislation for the Terrace Apartments/Tideland Bill. In reviewing the pros and cons of this issue I am of the belief that the positive aspects of the bill far outweigh the disadvantages that may occur. It is also my feeling that the public will be best served by passing this legislation as the Tidelands funds will still receive the revenue from the project. I would strongly recommend a positive vote for this legislation. Best regards 4betA . uer President AJA/ak cc: Beverly Ray 18004 Skypark Blvd., Suite 120, Irvine, California 92714 • (714) 756-0690 FAX (714) 756-0693 "RECEIVED AFTER AGENDA PRINTED." '35" PAUL T. SALATA 3100 AIRWAY AVENUE, SUITE 124 COSTA MESA, CALIFORNIA 92626 (714) 556-0353 RECEIIP 9 ;_ MQtoCL>AK k�yp1'pR10Fl,Ck May 6, 1994 The Honorable Clarence J. Turner Mayor of the City of Newport Beach and Members of the City Council 3300 Newport Boulevard P.O. Box 1768 Newport Beach, CA 92658-8915 Dear Mayor Turner and City Council: This letter is in reference to the State Lands Commission's position that the Balboa Bay Club Terrace Apartments are located on State Tidelands and therefore may not operate as a residential facility. I am encouraging the City Council to push through legislation as submitted in a bill to Senator Marion Bergeson to free the apartment sites from Tideland restrictions. It is my feeling that the legislation would be advantageous to all concerned parties and hope that you will agree with this position. Thank you for your consideration. Sincerely, Paul T. Salata PTS:pt MAY 09 194 17:05 THEODORE ROBINS FORD/ISUZU THEODORE ROBINS. -INC. 2080 NARBOR BOULEVARD, C0S7A MESA, CALIFORNIA 92827 7ELEPHONE:71480.2-0010 The Honorable Clarence J. Turner Mayor Of the City of Newport Beach and Members of the City Council 3300 Newport Boulevard P. 0. Box 1768 Newport Beach, Ca. 92658-8915 RECEIVED Nqy 12 1994 OF VON I fully support the legislation that will take the Balboa Bay Club's Terrace apartments out of State tidelands and permit the Club to continue operating it as a residential facility. This makes sense in every respect for the City as well as the Balboa Bay Club. Everyone loses if this legislation does not pass. I therefore strongly urge the City Council to do everything in it's .power to see the bill submitted to Senator Marian Bergerson gets pushed thru,' Sincerely yours,� Theodore "Bob" Robins Jr. President Theodore Robins Ford sr Dro C.C. Beverly Ray 14, Chairman of the Board Balboa Bay Club SW9444f Aaff4p, OW04aWw 19.21 P.2