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Port staff outlines costs and options for South Beach Harbor after redevelopment transfer; tenants protest proposed rate increases
Summary
With management of South Beach Harbor transferring to the Port after dissolution of the Redevelopment Agency, staff reported a roughly $800,000 operating deficit and potential BCDC‑mandated capital needs of about $10 million; a market appraisal recommending large rate increases drew strong opposition from tenants, who said the process was rushed and would displace longtime and lower‑income berth holders.
Port staff told commissioners that the Port will assume day‑to‑day management of South Beach Harbor and related redevelopment properties effective July 1, 2012, and presented financial analyses that show the facility operating at a projected deficit unless rates or revenues change.
Peter Daley, Deputy Director of Maritime, said South Beach Harbor is a 700‑slip marina built in 1986 with a current wait list and high occupancy. He said the original financing included about $24,000,000 in revenue bonds and an approximately $8,000,000 California Department of Boating and Waterways loan, and noted a later $10,000,000 improvement program. Daley said port staff’s analysis, including an appraisal by David Tattersall & Company, shows the harbor is under market and that capital needs — including Bay Conservation and Development Commission‑mandated repairs — could exceed $10 million in today’s dollars.
Daley told the commission the harbor faces about an $800,000 operating deficit in 2012‑13 and that staff will return with firm rate scenarios; staff proposed delaying recommendations for 30 days to consult tenants and said implementation could be targeted for October. “We are committed to work with the South Beach community in the next 60 days to come up with scenarios that we think make sense,” Daley said.
Public commenters representing slip holders, the tenant association and South Beach Yacht Club strongly criticized the market appraisal and proposed schedule. Tenants said they were notified only weeks earlier and that the proposed increases (in some examples cited by tenants, increases of 40‑50% or more) would force fixed‑income and working‑class boaters out of the harbor and eliminate the harbor’s original purpose as affordable local access to the Bay. Steve Lorenz, a slip holder, said the marina was designed to be below market and warned that moving to market rates would evaporate the 1,700‑person waiting list’s significance for local residents.
Several speakers questioned the Tattersall survey methodology and comparables, objected to a perceived “cherry‑picked” set of marinas used for comparison, and asked for a longer engagement timeline. Lawrence Weinhoff, who said he had obtained loan and operating contract records, argued that marina loan covenants require periodic rate review and that public marinas are subject to different comparables than boutique private marinas.
Port staff responded that prior rate increases had been limited to CPI adjustments every one or two years and that there does not appear to have been a prior market study. Staff pledged to continue two‑week tenant meetings and present options in August rather than the earlier July timeline. Staff also noted the Port inherits outstanding debt (cited in staff materials as about $13.5 million) and that capital funding strategies must be developed to meet the BCDC requirements due in the coming years.
Commissioners thanked staff for proactive outreach and said they want to protect the harbor’s community uses while addressing fiscal and capital needs. Staff plans to return in August with scenarios for rates, parking and other revenue options and to continue meetings with tenants in the interim.
Procedural note: the item was informational; no final rate decision was made at this meeting.
