Newport Beach committee weighs single developer bid, staff-built alternatives for Lower Castaways

At a Newport Beach City ad hoc committee meeting, staff presented the city’s August request for proposals for Lower Castaways and said only one firm, Burnham Ward, submitted a response. Burnham Ward’s proposal described roughly 14,000 square feet of commercial space, replacement of the existing seawall and new public amenities; the developer estimated total project costs at just under $25 million with Burnham Ward covering about $7.4 million and the city covering the roughly $17.5 million balance. Staff’s pro forma projected annual gross revenues near $1.2 million, operating expenses of about $455,000 and a net operating income the presentation listed as roughly $740,000. Under the proposed lease terms, a 5% share of gross revenues would yield an estimated $60,000 a year to the city.

The presentation prompted questions about financial feasibility and procurement. “So the city puts in 17,000,000. He puts in their company puts in 7, and we get 60,000 a year,” a committee member said, summarizing the numbers staff had given. Committee members and staff noted the RFP was intentionally broad; several…