Newport marina rents going up, but less than planned 5 years ago

Rents will increase soon for commercial marina operators in Newport Beach, but not as much as they could have.

The City Council passed a resolution Tuesday night amending the rate structure for rent that commercial marinas in Newport Harbor pay the city. But city staff and Mayor Kevin Muldoon took care to point out that the updated, phased-in rate schedule tops out lower than one the council passed five years ago but the city never fully implemented.

Rent at large marinas — those bigger than 30,000 square feet — will increase from 35 cents per square foot to 76 cents in November, while marinas less than 13,000 square feet will see their rent increase from 26 cents per square foot to 49 cents. A new midsize category for marinas between 13,000 and 30,000 square feet will pay 62 cents per square foot.

In August 2018, the rent will climb to $1.17, 76 and 89 cents per square foot, respectively.

Assistant Community Development Director Seimone Jurjis said that in 2012, the council adopted a rate index that eventually would have raised the large-marina rental rate to $1.68 per square foot, but City Manager Dave Kiff chose to freeze rates in 2015 before they phased in to the maximum level. The city hired an appraiser to make a new fair-market study — but technically, on paper, large marinas currently should be paying $1.46.

That makes the $1.17 rate in 2018 lower than that.

“It’s a reduction from the 2012 rate set by the prior council,” Muldoon said.

But resident Michael Morgan noted that “the current rate for a small commercial marina is actually 26 cents” and said the rate adjustments will, in effect, be “upward of a 200 or 260% rate increase on today’s current (rate).”

“Yes, I did state that if the city manager decides to unfreeze the rates, that it will be,” Muldoon said.

About 60 commercial marinas of all sizes operate around Newport Harbor. The city has a menu of subcategories for rents, which give a discount for uses that provide a public service or an amenity to harbor visitors, such as fuel docks, restaurant guest slips and sportfishing charters.

Marina rents go into the city’s Tidelands Fund, which is used for harbor management.

“We’re taking on more expense in the tidelands, and I think everyone in this town who rents a commercial marina is aware of what our issues are, with seawalls and all the rest of it,” Councilman Brad Avery said.

The total revenue from commercial marina rents last fiscal year was $381,556. The projected total under the August 2018 rates is $1.1 million.

City staff also recommended annual rent adjustments based on the Consumer Price Index.

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