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;
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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Council in this resolution are hereby repealed.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
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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
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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
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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-
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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..
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(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)