A majority of the waterways in Lower Newport Harbor are considered tidelands. They are owned by the State of California (State) and are assets of the public. State legislation in 1978 assigned most of the tidelands here to the City of Newport Beach (City) to administer under the State's rules. Thus, the City is serving as "landlord" on behalf of the State. One of the rules is to set rents at fair market value. The Harbor's tenants are those who rent these public assets for a specific private use - like operating a marina, a concession on a pier, or berthing at a mooring.
The City has not reviewed the rent charged for the use of the tidelands for many years. Charges for commercial harbor renters have gone up about 24% since 2001, while some marina slip rates have increased between 67% and 152% during that same period. If the City does not charge an appropriate rent for the use of the tidelands, it can be considered a "gift of public funds", which is prohibited under the California Constitution (Article 16, Section 6).
For the past several months, the City has been talking with harbor renters as to harbor rental rates. The City recently obtained two independent appraisals to provide guidance as to what might be current market value. Copies of the completed appraisals are available for viewing by clicking on the links below or in the City Clerk's Office until October 1, 2012. Past appraisals are shown below, too.
Other individuals have asked us how we allocate revenues and expenses associated with Tidelands. We do this under the guidance of the 1974 legislation, which directs us to take any revenue associated with Tidelands (parking, rent, oil sales, more) and use that to pay Tidelands expenses (dredging, other harbor maintenance, lifeguarding, more). The Tidelands expenses almost always exceed Tidelands revenues, in part because most of the ocean beaches are Tidelands - and the life-safety calls associated with residents and visitors there are expensive. All of the City's financial accounts - including the Tidelands Fund - is audited annually as required by law.
To determine rents, the City Council will consider the appraisals and other relevant information, including input from the public. The matter is currently scheduled for discussion and possible action at the September 11, City Council meeting.
- Residential Piers
- Draft Commercial Marina Lease Template (as of September 28, 2012)
- Draft recommendations for commercial marinas (as of August 29, 2012)
- Frequently Asked Questions
- Tidelands Management Committee information
- Independent Appraisals of Newport Harbor Tidelands
- 2012- Fair Market Rate Appraisals
- Netzer & Associates-August 10, 2012
- Rasmuson Appraisal Services
- Phase I - Newport Harbor Commercial Tidelands-dated August 8, 2012
- Phase II - Newport Harbor Commercial Tidelands-dated October 12, 2012
- Phase III - Noncommercial (Residential) Piers-dated November 2, 2012
- October 2006 - Newport Harbor Appraisal
- June 2001 - Newport Harbor Appraisal
- George Hamilton Jones, Inc.