‘Major sticker shock’: Harbor Commission ships 300% mooring rent hike proposal to Newport Beach City Council

Over the objections of many audience members, the Newport Beach Harbor Commission voted unanimously during its regular meeting Wednesday to recommend a 300% increase in rents for public moorings to the City Council.

The mooring rental rates have not changed since 2016. The commission began taking a new look at that revenue stream in 2021 on the behalf of the council and has held several meetings on the topic.

Commissioners propose an increase in monthly rents to $7.71 per linear foot for the city’s 478 on-shore moorings, up from the current rate of $1.67 per linear foot. The monthly rent for the city’s 731 off-shore moorings would be raised to a range of $7.77 to $17.78 per linear foot, depending on the mooring length, up from the current rental fee of $3.35 per linear foot. The proposed new rates were arrived at after Netzer and Associates prepared an appraisal report.

Revenue generated by the mooring rentals goes toward the city’s tidelands fund, which finances the city’s harbor department, maintenance and enhancement of the tidelands, environmental protection initiatives and support of public access and recreational activities, according to Ira Beer, vice chair of the Harbor Commission.

In a presentation Wednesday night, Beer said the increase prevents the subsidizing of individuals using public land — in this case, water — and “ensures that mariners mooring vessels over public tidelands pay an equitable amount for the privilege of accessing their vessel while enjoying the use of these valuable and limited resources.”

Beer noted the city’s general fund is compensating for a $4.6-million deficit in the tidelands fund for the 2023 fiscal year.

Beer reiterated statements made in February by Harbor Commission Chair Stephen Scully that the city needed to implement a rent hike after a 2007 Orange County Grand Jury report found Newport Beach was undercharging boat owners for mooring permits.

Beer maintained the exponential increase would only reach current market values.

“While a 300% increase does seem very substantial ... mooring rates have seen only one adjustment over the past 20 years, and that was pulled back in 2016,” Beer said. “Subsequently, the only rate adjustments that have been applied did not even keep up with the [consumer price] index as they are limited to not exceed 2% annually.”

Beer noted the increases, if approved by City Council, would not go into effect until the start of 2025 and would be phased in over the course of five years to meet the target goal.

The City Council is expected to consider the matter in early summer, city spokesman John Pope said Thursday.

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Speakers who addressed the commission during the public comment portion of the meeting called on the panel to review an alternative appraisal commissioned by residents instead of relying on the report by Netzer and Associates. They perceived conflict of interest because Netzer is involved with the Newport Aquatics Center, but the city has denied such a conflict. Opponents to the rate hikes also noted some of the commissioners have boats and private docks attached to their homes, which some viewed as an additional layer of conflict of interest.

One boat owner and Newport Beach resident of 12 years, Jake Pollgreen, told the commission that owning a boat in the harbor had been a dream while he was growing up in Chino Hills.

“[Vice chair] Beer, you mentioned the runway of five years as though to soften the blow,” Pollgreen said. “That alone just shows that you yourself believe this to be a little hard for us to take, and then you’re saying, ‘Oh, we got to do it, but let’s make it a little easier for them.’ There’s been a lot of numbers and talks and quotes from other meetings that I have not attended, so I do rely a lot on the trust here from these other members [of the audience], but this just bums me out.

“Maybe one day I’ll have a dock with a nice boat on it and not have to pay certain amounts, but at this time and at this rate, I will eventually be forced out of it, and you’ll force a lot of us out of [the harbor].”

Others described the rates that came from the appraisal as “comparing apples to oranges,” as it referenced public moorings in other cities like San Diego, Monterey, Morro Bay and Santa Barbara, which offer services that Newport Beach moorings do not. Newport Harbor users have access to public facilities but do not have private utilities included with the moorings.

Prior to the vote, Commissioner Don Yahn said he heard and felt a lot of the pain from mooring permit holders, saying the decision was not made lightly.

“I know [the increases are] difficult, and I know that it will affect the livelihoods of those in this room,” said Yahn. “And since the rates haven’t been adjusted for decades, we’re talking about major sticker shock. I have read all the materials. I have done my homework. I’ve read and checked with other cities and our city staff. I’ve made phone calls, talked ... to appraisers, the [state] land use commission and many yacht clubs. I don’t think it’s a money grab.”

Several who will be affected by a hike in rates, which include both recreational boat owners and those who live aboard their boats, said they are disappointed in the decision and the “inevitability” they feel they are facing.

Chris Benzen, who rents a spot for his boat at one of the public moorings, said he believes the City Council will likely approve the increases. He is hopeful Council Chambers will be packed at the time of the hearing, but he expects the issue will ultimately land in court.

“We’ll issue a legal letter, then if they approve [the rent increases], file for injunctive relief and let the courts decide on these perceived conflicts of interest. It’s unfortunate that we have to sue our city,” Benzen said. “I don’t take lightly wasting taxpayer dollars, but [the city] is wasting taxpayer dollars by pushing this through even with all the information I’ve provided them with ample time. The citizens, I hope, do not place the blame on us.

“We’re just trying to protect our interests but also to hold the city accountable. We can’t get answers from the Harbor Commission. We can’t get answers from the City Council or get the city attorney to step in. We tried the California State Lands Commission, the lieutenant governor, [Rep.] Katie Porter, [state Sen.] Dave Min, [Assemblywoman] Diane Dixon — we tried everyone. The only arbiter of justice, at this point, is going to be a judge.”

On Thursday, Jessie and Mike Fleming, who have a live-aboard boat in Newport Harbor, said they’ve heard from neighbors who say they probably will move out or sell their boats.

“We’re all very disheartened. Some people said they’re going to be able to hold on for a few years, but once it got up to a certain rate that they’d have to leave,” said Jessie Fleming. “But, this is our neighborhood. It’s our community.”