HomeMy WebLinkAbout01 - PowerPointCOMMERCIAL MARINA
RENTS /LEASE
October 23, 2012 — NB City Council
Committee Recommendation
Rent:
18.5% of Gross Slip Revenue calculated in SF via an
Index
18.5% is midpoint between 2 appraisals
About $1.97 /SF now
Primarily for Large Commercial Marinas
Phase -in over 6 periods (to 201 8)
Lease not mandatory — permit is an option
Committee Recommendation
Marina Index:
Use 9 marinas, including BYB and BCYC
Market Re -set
After 10 years, independent appraisal process using 2
appraisers, possibly 3
Many other changes to lease, including:
- Lessee has option to keep improvements or give to City
at lease expiration /termination.
- Removal of Security Deposit
- Option to use annual permit in lieu of lease
Leases versus permits
Lease v. Permit
F- Marina operator can pick one or the other
Lease:
5 -25 year term
Same rent as permit, same phase -in
Possibly greater ability to secure financing
E: Permit:
1 -year term
Same rent as lease, same phase -in
Shorter document, fewer terms
About Rent
Rent — 18.5% of Gross Slip Revenue
Large commercial marinas can choose:
Index rate (right now $1.97/SF)
No audit, no data submission
■ Phased -in to 2018
Actual submission of 18.5% of GSR
Minimum rent = $1 .45/SF (phased -in)
• Operator must agree to submit info directly to City.
• City retains ability to audit
• Also phased -in to 2018
• Min rent increases by CPI through 2018, then re -sets at 75%
of Large Commercial Marina Index Rate
9-Marina
Marina Name
Percent of
Index
Gross
18.5% of Gross
18.5% of
Gross by SF
of Water
Ardell
59/c
$
2.35
Bahia Corinthian Yacht Club
5%
$
802,444
$
148,452
$
2.26
Balboa Yacht Basin (City)
16%
$
11953,831
$
361,459
$
1.60
Bayshores Marina (Cal -Rec, County)
7%
$
11801,951
$
333,361
$
3.33
Bayside Marina (Cal -Rec)
10%
$
2.52
Lido Yacht Anchorage
18%
$
2.02
Harbor Towers Marina
4%
$
605,714
$
112,057
$
2.04
Newport Dunes Marina (County)
32%
$
31804,787
$
703,886
$
1.60
Newport Marina (Swales, County)
4%
$
393,254
$
721752
$
1.45
Price per SF if 18.5%
over Total Waterway SF =
$ 1.97
Example of Phase -In - $1.97/SF
Assumed Index Ra
Previous Year's Re
Difference
Periods Remaining (
increase for Year (A)
to
$
1.97
2.00
$
2.05
$
2.09
$
2.07
$
2.08
$ 2.14
tit
$
0.35
$
0.63
$
0.90
$
1.19
$
1.49
$
1.78
A)
$
1.61
$
1.37
$
1.15
$
0.90
$
0.58
$
0.30
1y At
BJ
5
5
4
3
2
1
1-11 Index
Rate
B)
$
0.27
$
0.27
$
0.29
$
0.30
$
0.29
$
0.30
Example of Phase -In - $1.45/SF
Assumed Index Rate
Previous Year's Rent
Difference (A)
Periods Remaining (B)
Increase for Year (A /B)
$
1.45
$
1.45
$
1.51
$
1.54
$
1.57
$
1.60
$ 1.61
$
0.36
$
0.54
$
0.73
$
0.92
$
1.13
$
1.35
$
1.09
$
0.94
$
0.78
$
0.61
$
0.44
$
0.25
N/A At
Full Index
6
5
4
3
2
1
Rate
$
0.18
$
0.19
$
0.19
$
0.20
$
0.22
$
0.25
Example of 18.5% Phase -In
Target Rate
Previous Year's Rate
Difference (A)
Periods Remaining (B)
Increase for Year (AjB)
18.50%
18.50%
18.50%
18.50%
1 18.50%
18.50%
3.40%
5.92%
8.43%
10.95%
13.47%
15.98%
15.10%
$ 0.13
$ 0.10
$ 0.08
$ 0.05
$ 0.03
6
5
4
3
2
1
2.52%
2.52%
2.52%
2.52%
2.52%
2.52%
18.50%
N/A - At
Full 18.5%
Committee Comments
Example
F- Commercial Marina of 100,000 SF
Implied Gross Slip Revenue of $1,065,000
Today, pays $36,000 in rent or 3.4% of GSR
In 2018, would pay $197,000 in rent or 18.5% of
GSR
F Net percentage point
increase = 15.1
%
of GSR
F Average percentage
point increase =
2.52%
per
yea r.
Possible Impact to Slip Rates
40' slip estimated charge:
$30 /ft /mo = $1,200 /mo
Year 1 Increase if fully passed to slip renters:
$1,200 x 2.52% = $30.24/mo
Slip Rates over Time
As a result of this rental increase:
u In 2012, pay $1,200 /mo
r-1 In 2018, pay $1,382/mo (~ 15.1 % before compounding)
Previous periods
2001 to 2006
In 2001, pay $780 /mo
In 2006, pay $1,000 /mo (25% increase)
2006 to 2012
• In
2006,
pay
$1,000 /mo
• In
2012,
pay
$1,200 /mo (20% increase)
Assumes 40' slip
Economic Impact of Changes
• Vacancy rates for Marinas that pay 20% of
GSR:
— Newport Marina (formerly Swales) 9%
— Bayshores Marina
3%
• No evidence that 18.5% of Gross for large
commercial marinas:
• Impacts economy of harbor;
• Makes it uneconomic to operate a marina.
Other Uses — Proposed Recommendation
Type .
Proposed R
Shipyards
0.50 /SF
1.5 cents /gallon
Fuel Docks
to 100K, then 2
Min rent is $0.50 /SF
cents/gallon
above 100K
1.02/SF for non-
Slips rented = 18.5% of Gross
Yacht Clubs
rented slips
w /1.45/SF floor or Index Rate
Daily Rental Boats
1.02/SF
1.02/SF for non-
Slips rented = 18.5% of Gross
HOAs
rented slips
w /1.45/SF floor or Index Rate
Other Uses — Proposed Recommendation
0 ' of Use
proposed Rent
Alternatives/Notes
Guest Slips for Restaurants
$1.02/SF
Slips rented = 18.5/0 of Gross
w /1.45/SF floor or Index Rate
Sportfishing Charters (7 or more passengers)
$1.02 /SF
Slips rented = 18.5 %of Gross
Non- Profits
No -Fee, Varies
w /1.45/SF floor or Index Rate
75% of Lg
or choose 18.50 of Gross
Small Commercial Marinas (<3000SF)
Marinas
W/1.45/SF floor
($1.45JSF)