HomeMy WebLinkAboutSS - Update Marina Park Lease NegotiationsSTUDY SESSION
ITEM NO.
CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
MARCH 28, 1994
TO: MAYOR AND CITY COUNCIL
FROM: ASSISTANT CITY MANAGER
SUBJECT: UPDATE MARINA PARK LEASE NEGOTIATIONS
At the Study Session of March 14th Councilmember Hart requested this report.
In early 1992 at the request of Marina Park residents, the City Council agreed to open
negotiations to extend the existing lease which expires in the year 2000. Negotiations
were postponed pending adoption of a new Income Property Policy. Based on this
policy, a determination was made by the Income Property Committee and approved by
the City Council that the highest and best use of the property was a mobile home park.
In August 1993, the City Council directed staff to commence negotiations to extend the
lease. At that time, the Council directed that the negotiations address increased public
access on the site.
During the latter half of 1993 staff analyzed a variety of issues including the previous
appraisal of the property and updated reports from consultants regarding comparable
rents in other mobile home parks. On December 6, 1993 the City Council Income
Property Committee approved an initial negotiating position for presentation to the
Marina Park Homeowners' Association. On December 14, 1993 a letter was sent to
the Homeowners' Association outlining general terms for extending the mobile home
lease that the Income Property Committee was prepared to recommend to the full City
Council.
The proposal includes specific rental amounts, a proposed number of years for the
term of the lease, proposals for periodic adjustments and other miscellaneous
provisions including increased public access as directed by the City Council. This
proposal is now under review by the Negotiating Committee of the Homeowners'
Association, and they have recently communicated that they will soon request a
meeting to begin negotiations.
Study Session for 3/28/94
Page 2
The City Council Income Property Policy specifies that staff will conduct negotiations
and report to the Income Property Committee which in turn will make
recommendations to the full City Council. This is consistent with other processes such
a labor negotiations which are conducted by staff under the direction of the Budget
Committee and then to the full City Council.
As is normally the case, these lease negotiations will first focus on the economic
issues and then the miscellaneous provisions. This is particularly appropriate for
these negotiations because current rents are considerably below the market and
because there are six years remaining on the term of the lease. Without general
concurrence on the economic terms it is doubtful whether negotiations can be
concluded successfully. For this reason, it is planned that the initial stages of the
negotiations concentrate on the economic terms.
As of the date of this writing, the Homeowners' Association has not yet scheduled a
meeting with City staff but this may change qy the date of the Study Session.
Kenneth J. Deli
KJD:mb
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