HomeMy WebLinkAbout11 - Dinghy Rack Rental RateCITY OF
NEWPORT BEACH
City Council Staff Report
May 27, 2014
Agenda Item No. 11.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David A. Webb, Public Works Director- (949) 644 -3330,
dawebb @newportbeachca.gov
PREPARED BY: Shannon Levin, Harbor Analyst
PHONE: 949 - 644 -3041
TITLE: Dinghy Rack Rental Rate
ABSTRACT:
In our on -going effort to improve servicesfor the mooring permittees, the City constructed a dinghy rack at the
Balboa Yacht Basin for exclusive use by the mooring permittees. Access to the off -shore moorings is only available
via dinghies for most permittees. The rack at the Balboa Yacht Basin has approximately 15 spaces which will be
assigned through a lottery system. An appraisal to determine the appropriate rent has been conducted accordi ng to the
Beacon Bay Bill, Council Policy F -7, and Newport Beach Municipal Code Section 17.60.010. The proposed rent for
a space in the rack is $25.00 per month.
RECOMMENDATION:
Review, set and approve the fair market value rent rate to be $25.00 per month for Dinghy
Rack Space. Direct the City Manager to adjust this rental rate every January 1st by either the
Consumer Price Index (LA- Orange- Riverside, All Urban Consumers) or 2 %, whichever is less;
and authorize the City Manager or designee to draft and implement a rental agreement.
FUNDING REQUIREMENTS:
No funding requirement.
DISCUSSION:
During the recent discussion involving mooring permit fees, the City Council directed staff to
look for ways to improve amenities to benefit the mooring permittees. One of the items
identified that would provide enhanced service was to specifically install a dinghy rack at the
Balboa Yacht Basin. The Balboa Yacht Basin is a City- owned, 172 slip marina located off
Harbor Island Drive near Basin Marine Shipyard and the Galley Cafe (Attachment A).
The dinghy rack has now been constructed, and is located near the end of the property with
direct access to an exterior, open side -tie that is designated for public access to the vessel
pump out station (Attachment B). This location was selected both for the ease of moving the
dinghy from the rack to the water and the available parking spaces at that end of the marina.
The California Constitution and the State Lands Commission's Public Trust Doctrine prohibit
the gift of public funds, and the Beacon Bay Bill, City Council Policy F -7, and Newport Beach
Municipal Code Title 17 require the City to receive fair market value rent for use of the
Tidelands. This dinghy storage rental rate has been calculated according to the procedures
specified in Council Policy F -7 which states "whenever a lease, management contract,
concession, sale or similar action regarding income property is considered by the City, an
analysis shall be conducted to determine the maximum or open market value of the property.
This analysis shall be conducted using appraisals or other techniques to determine the highest
and best use of the property and the highest value of the property." Certified General Real
Estate Appraiser Gary Rasmuson was hired by staff to conduct an appraisal (Attachment C).
Rasmuson collected dinghy rack rate information from seven yacht clubs and marinas in Dana
Point and Newport Beach.
The table below references the collected rates and the average of those findings:
No.
Marina
Rent/Mo.
1
Dana Point
$25.00
2
Newport Dunes
$25.00
3
Newport Harbor Yacht Club
$30.00
4
Bahia Corinthian Yacht Club
$21.57
5
Balboa Yacht Club
$20.25
6
Lido Isle Yacht Club
$12.50
7
American Legion Yacht Club
$35.00
Average
$24.19
Median
$25.00
Staff proposes that monthly rent be set at $25.00 per month. Going forward, the rental rate will
be subject to an annual adjustment according to CPI or 2 %, whichever is less, and every five
years an appraisal of the market value will be conducted to keep rates consistent with the
market.
Staff has designed a lottery system to distribute the rack spaces to any of the 800 offshore
mooring permittee's that would like to apply for one of the 15 spaces. Upon approval of the
rental rates, staff will implement the dinghy rack program at the BYB in time for Summer 2014.
Staff will maintain responsibility for dinghy rack administration.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action 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.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the
meeting at which the City Council considers the item).
ATTACHMENTS:
Description
Attachment A - Location Map
Attachment B - Dinghy Rack Location and Photos
Attachment C - Market Rent Appraisal
ATTACHMENT A
ATTACHMENT B
Rasmuson Appraisal Services
7809 Inception Way
San Diego, California 92108
Ph. (858) 672 -1796
May 5, 2014
Ms. Shannon Levin
Public Works Department
City of Newport Beach
829 Harbor Island Drive
Newport Beach, California 92660
ATTACHMENT C
Gary L. Rasmuson, MAI, SRA
Wendy A. Rasmuson, MBA
RE: Balboa Yacht Basin Dinghy Rack Market Rent Analysis, Newport Beach, California
Dear Ms. Levin:
File No. 14591
At your request, I have prepared a market rent estimate for the dinghy rack located at the Balboa Yacht
Basin. This report sets forth our opinion of market rent along with a summary of supporting data and
reasoning which form the basis of our opinion.
Scope of the analysis
The scope of this analysis included the following:
• physical viewing of the subject dingy rack, neighborhood, and submarket;
• research comparable rent data from competing marinas;
• present the results in this report
Purpose of the appraisal
The purpose of the appraisal is to estimate monthly market rent for an individual dinghy space.
Identification of the intended use and users of appraisal
The intended use of this market rent analysis is to assist my client in establishing rent rates for the
dinghy racks at Balboa Yacht Basin. It was prepared for the exclusive use of the City of Newport Beach.
It may not be used or relied upon by any other party. Any party who uses or relies upon any information
in this report, without the preparer's written consent, does so at his own risk.
Interest appraised
The dingy rack does not appear to be permanently attached to the real estate and therefore is
considered a fixture or personal property and no real property interest is being appraised in this report.
Effective date of appraisal
May 4, 2014 — Date of subject property visit and viewing
Shannon Levin
City of Newport Beach
May 5, 2014
Page 2
Definition of terms
Market Rent
The term "market rent' or "fair market rent ", as used in this appraisal report, is defined as follows:
The most probable rent that a property should bring in a competitive and open market reflecting all
conditions and restrictions of the lease agreement, including permitted uses, use restrictions, expense
obligations, term, concessions, renewal and purchase options, and tenant improvements (Tls).
Source: Appraisal Institute. Dictionary of Real Estate Appraisal, 5th Edition, (Chicago, 2010), p. 121
Subject Ownership
The City of Newport Beach
Subject Description
The dinghy rack that is the subject of this market rent estimate is located near the southwest corner of
the Balboa Yacht Basin, on the edge of the parking lot near the harbor. Balboa Yacht Basin is a marina
owned and operated by the City of Newport Beach for public use. There are 172 slips within the marina.
The city constructed the dinghy rack for exclusive use by the mooring permittees of Balboa Yacht Basin.
Access to the off -shore moorings is only available via dinghies for most permittees. The spaces will be
assigned through a lottery system.
The dingy rack appears to be free - standing and is constructed of treated lumber with padded rails for
each dinghy. The racks measures approximately 10.5 feet deep by 23 feet long and about 6 feet high. It
is divided into four sections with two internal levels and a top rack. The bottom level is about 3 feet
high and the upper level is about 2 feet high. It appears that this rack can accommodate 12 -15 dinghies.
The rack is near the open side tie that is designated for public access to the vessel pumpout station. This
location was selected for both the ease of moving the dinghy from the rack to the water, and the
available parking spaces at that end of the marina. The rack appears to be of new construction and in
good condition.
Photos of the rack storage and a map showing the location of the rack follows
Rasmuson Appraisal Services
Shannon Levin
City of Newport Beach
May 5, 2014
Page 3
Map of Balboa Yacht Basin
Source: Google Earth
Photos
4 R _
Rasmuson Appraisal Services
Shannon Levin
City of Newport Beach
May 5, 2014
Page 4
Market Rent Analysis
I have researched marinas and yacht clubs located in the Newport Beach Harbor and nearby harbors to
provide an indication of rents charged for dry rack dinghy storage. I was also provided with survey
information for several marinas and yacht clubs by my client. A summary of this data follows.
Dinghy Rack Rent Rate Survey
No. Marina
1 Dana Point
2 Newport Dunes
3 Newport Harbor Yacht Club
4 Bahia Corinthian Yacht Club
5 Balboa Yacht Club
6 Lido Isle Yacht Club
7 American Legion Yacht Club
Average
Median
Comments
$25.00 Max. 6'x 10' flat bottom dinghy
$25.00
Dinghy rack space
$30.00
Dry rack Sabot storage only
$21.57
Data provided by third party
$20.25
Data provided by third party
$12.50
Dry rack Sabot storage only- members only
$35.00
Currently have a waiting list
$24.19
$25.00
Based on this survey data, the range of rates is from $12.50 to $35.00 per slip per month. The lowest
rate is from the Lido Isle Yacht Club and reflects more of a yacht club amenity rate than a market rate. I
also considered rates in other marinas in Los Angeles, Marina Del Rey, San Diego and Ventura, but found
insufficient data to make a comparison. Some yacht clubs do not charge for the dinghy storage. One
charged $5.50 per month for members only and indicated this would not apply to a public rental. The
Shelter Cove Marina in San Diego on San Diego Bay has dinghy dry rack storage at $12 per month. Slip
rates in San Diego Bay are significantly lower than those found in Newport Harbor and therefore I would
expect that dry rack storage rates would also be lower.
I have concluded at a market rent rate for the dinghy dry rack storage space at $25.00 per space per
month.
CONCLUDED MARKET RENT RATE — DINGHY DRY RACK SPACE ($/SPACE/MONTH) $25.00
If you have any questions, please feel free to contact me.
Respectfully submitted,
RASMUSON APPRAISAL SERVICES
Zry&L Ra uson, MAI, SRA
Certified General Real Estate Appraiser- State of California
OREA Appraiser I.D. No. 002571
Expires 2/4/2016
Rasmuson Appraisal Services
Shannon Levin
City of Newport Beach
May 5, 2014
Page 5
CERTIFICATION OF APPRAISER
I certify that, to the best of my knowledge and belief,
• The statements of fact contained in this report are true and correct.
• The reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions,
and conclusions.
• 1 have no present or prospective interest in the property that is the subject of this report, and no
personal interest with respect to the parties involved.
• I have no bias with respect to the property that is the subject of this report or to the parties involved
with this assignment.
• My engagement in this assignment was not contingent upon developing or reporting predetermined
results.
• My compensation for completing this assignment is not contingent upon the development or
reporting of a predetermined value or direction in value that favors the cause of the client, the
amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
• My analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the requirements of the Code of Professional Ethics and the Standards of
Professional Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal
Practice.
• The use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representatives.
• As of the date of this report, Gary L. Rasmuson, MAI SRA has completed the requirements of the
continuing education program of the Appraisal Institute.
• 1 have made a personal inspection of the property that is the subject of this report.
• No one provided significant professional assistance to the person signing this report.
• I have performed no services, as an appraiser or in any other capacity, regarding the property that is
the subject of this report within the three -year period immediately preceding acceptance of this
assignment.
son, MANS A
4affietreml Real Estate Appraiser
State of California
OREA Appraiser I.D. No. 002571
Expiration Date: 2/4/2012
Rasmuson Appraisal Services
Date: May 5, 2014