Charging Fair Market Rent for Harbor Uses

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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 had not reviewed the rent charged for the use of the tidelands until 2011.  Charges for commercial harbor renters had gone up about 24% since 2001, while some marina slip rates had 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). 

To address this issue, in 2011 the City met with the harbor renters to discuss harbor rental rates.  The City then 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.  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 considered the appraisals and other relevant information, including input from the public. 

Additional Information: 

2015 City Council Review

January 27, 2015 City Council Study Session – PowerPoint and Minutes

February 10, 2015 City Council Meeting – Staff Report, PowerPoint, Minutes and Resolution 2015-10

2013 City Council Review of Public Feedback

Two public meetings were held in August 2013 to facilitate discussion for harbor charges related to commercial pier fees, residential pier fees and mooring fees. At the November 12, 2013 City Council Study Session staff presented feedback for implementation of these harbor charges.

November 12, 2013 City Council Study Session - Meeting Notice

November 12, 2013 - Staff Report, PowerPoint and Minutes

November 26, 2013 City Council Meeting - Staff Report, Minutes and Resolution 2013-88

December 10, 2013 City Council Meeting - Staff Report, Minutes and Ordinance 2013-27

Public Pier Fees Implementation Review Meeting Information

Meeting Notice for August 15, 2013 and August 21, 2013 Workshops.                              

Agenda for August 15, 2013 and August 21, 2013 Workshops.                                                  

Public Comments and Email from the August 15, 2013 Workshop

Public Comments and Email from the August 21, 2013 Workshop