Legislator Seeks to Collect Rent on Private Piers

SACRAMENTO —  Courtesy of the California Legislature, homeowners at some of the most expensive addresses in Huntington Beach are mooring their boats at rent-free private piers built in public waters.

Records at the State Lands Commission show that 102 people who own property along the main channels at Huntington Harbour are holding “recreational pier permits” for exclusive slips and docks.

And, under an obscure 1978 law, those permits excuse them from paying any rent to the state, although the structures and their boats occupy space in a state waterway. They are treated differently from owners of commercial marinas and oil platforms, who routinely pay annual fees for the use of tidelands.

But now they and other owners of private piers around the state are coming under attack in the Legislature, where lawmakers are scrambling for ways to make up for the state’s record $14.3-billion budget gap. Rethinking the loophole, some lawmakers now say it’s time these boat owners pay up.

“It’s absolutely unfair,” Assemblywoman Jackie Speier (D-South San Francisco) said about the rent-free piers. “If you look at it in the cold light of day, it’s indefensible that someone would have a lease for public lands and not pay rent for it. . . .

“There are so many well-heeled people in California that have these piers and coincidentally have connections with the power structure, whether it is the elected officials or their surrogates,” Speier said. “And it’s just one of those perks that people have become accustomed to having. . . . “

Defenders of the private piers say charging rent is a “soak-the-rich” scheme that would actually subject waterfront homeowners to double taxation, since they are already paying higher property taxes because of the exclusive launches.

“We bought the house with the idea that we live on the water and we have a dock,” said Sarah L. Wilson, whose husband is a staff commodore at the Huntington Harbour Yacht Club. “Our taxes pay for it. There’s no way we should pay again.”

Speier stumbled over the issue last fall while working on other matters pertaining to the State Lands Commission, the agency that leases out sovereign lands below the high-water mark along 1,100 miles of navigable rivers, lakes, streams and coastline. The commission’s 4-million-acre jurisdiction extends three miles out into the ocean and includes scenic Lake Tahoe.

Each year, the agency collects $170 million in rent, most of it from oil and gas exploration leases off the coast of Orange, Santa Barbara, Los Angeles and Ventura counties. Under the “public trust doctrine,” fair-market rents are charged for commercial slips, pipelines, oil platforms and telecommunication lines.

Except for private boat launches.

Over the years, the state has charged no annual fees for people--many of them California’s power elite--for building docks, launches and slips into state waters from their homes and summer resorts.

The list has grown to 1,000 people throughout California who hold renewable five- and 10-year permits for structures ringing Lake Tahoe and throughout northern counties. They include Insurance Commissioner John Garamendi, computer magnate William Hewlett, 1976 Olympic decathlon gold medal winner Bruce Jenner and family publishers of the San Francisco Chronicle and the Sacramento Bee.

In Southern California, the only concentration of rent-free slips and docks under state jurisdiction are the 102 in the main channels of Huntington Harbour. All other waterways are either considered parts of private developments or are controlled by local governments; for example, Newport Bay is controlled by the city of Newport Beach.

In 1976, at the urging of the Lands Commission, the attorney general ruled that failure to charge rent for the private piers was an unconstitutional gift of public funds. But a Contra Costa County legislator quickly countered with a 1978 law that codified the privilege, based on the idea that launches actually provided a “public benefit” during boating emergencies.

Ten years ago, a Los Angeles lawmaker made a run at the rent-free piers. His bill died quickly in the Senate Government Organization Committee.

Now Speier has resurrected the challenge with a proposal to charge fair-market rent for private piers, docks, slips--and even buoys--in the public waterways. It passed the Assembly on a 42-30 vote June 12 and is up for a hearing Tuesday before the same Senate committee.

Estimates vary on how much Speier’s measure could net. The commission says it could gain between $225,000 to $675,000 annually on the recreational piers, but Speier says she wouldn’t be surprised if the state recovers more than $1 million. Pier owners could be looking at charges of from $300 to $400 a year.

As a first step, the commission, which supports Speier’s proposal, has increased its application fee for recreational pier permits from $100 to up to $600.

Apart from the money, though, Speier’s measure has taken on symbolic proportions in the haze of the Reagan hangover. While the state is raising taxes on the middle class and cutting benefits to the poor, the liberal Democrat says it is only right that it abolish a “sacred cow” privilege for “people who subscribe to the lifestyle of the rich and famous.”

She said private piers are a special problem around Lake Tahoe, where property owners have fenced off their launches and effectively blocked access to public beaches.

In Orange County, Speier’s bill would not affect the 1,500 to 2,000 private piers extending into Newport Bay. That waterway is under the control of the city, which charges the likes of former Nixon ambassador Gavin Herbert, developer George Argyros and former talk show host Joey Bishop a nominal $60 annual “registration fee” for their launches, city records show.

However, it would hit those along the main channels of Huntington Harbour, where any talk of dock fees is tantamount to a declaration of war. (The legislation would not affect docks, slips and launches on private waterways farther inland from the harbor’s main channel.)

Among those enjoying rent-free use of the public harbor is a University of California regent who is also vice chairman of the state Republican Party, agency records show. Others include business owners, developers and a yacht association.

How the increases would affect individual homeowners is unknown, but recent private pier applications suggest stiff increases. For instance, the state last year charged a developer in Huntington Harbour $2,485 in rent for five piers that subsequent homeowners enjoy free.

Whatever the cost, channel property owners say they are dismayed by Speier’s intentions. Already this year, they’ve beaten back one unrelated proposal from the city for a local “dock” tax.

“If this ever comes to the forefront, we’re going to have a war,” said pier owner William H. Wilson, the commodore and retired Bechtel engineer who helped build the San Onofre nuclear power plant. “. . . This girl, this young woman that’s putting in this bill, is equating us with Exxon.

“I’m just a poor private citizen,” said Wilson, who owns a 44-foot sportfishing boat moored at his home on Bolero Lane. “I worked all my life. I live here. I bought the house. I got a lease for the submerged water under my dock for 10 years from the state, and I intend to keep that.”

Tirso del Junco, a general surgeon whose slip is part of a summer home on Somerset Lane, said he was shocked by the proposed rent.

“I didn’t know that was public water,” said Del Junco, state Republican Party vice chairman and political appointee to the UC Board of Regents and governing board of the U.S. Postal Service.

While he sympathized with the argument that he and other pier owners should pay rent for their use of public waters, Del Junco also argued that the Speier proposal “falls in the area of double taxation.” He also said it would be unfair to “change the rules of the game” by closing the loophole and charging permit holders.

“If I did not have a dock in the place, I would call the governor . . . and say (that), in principle, it is wrong,” he said. “But I’m not going to do it because . . . I don’t think I should be using my position in a self-serving manner.”

Alan Dauger, who lives on Ventura Drive, said his private dock has been the occasional refuge for the troubled boater.

“I’ve had people come and use the telephone and ask for help in the case of emergency,” said Dauger, who owns several apartment houses. “We would help them and we would call, depending on what we thought of the person.”

He also said the Speier measure was wrongheaded because the private launches along Huntington Harbour actually benefit the public as well.

“Our projects enhance the state waterways,” he said, adding that boaters without property on the channel make it a point to “come by and enjoy the view of our homes. We don’t charge for that.”

Times staff writer David Lesher contributed to this story.

Huntington Harbour

Current law allows homeowners along main channels of Huntington Harbour to enjoy rent-free private piers in public waters. Legislation may close that loophole and require annual rent.