Midyear waterfront finances: revenues slightly up; unresolved rent and vacancies create risk

Waterfront staff presented a fiscal year 2026 midyear status report to the Harbor Commission on Jan. 22 showing total department revenues through Nov. 30, 2025 are up roughly 2.6% ($236,666) compared with the same period last year, but the department faces notable near-term risks.

Cesar Barrios told commissioners the uplift is driven in part by higher interest earnings (up about 24.4% year-over-year) and gains in some program areas, while parking services are down roughly 4.7%. Barrios said a single unresolved rent receivable of approximately $368,000 from a key food-service tenant is included in the midyear totals as revenue but has not yet been collected and may not be fully recoverable.

Other midyear metrics staff cited: property-management revenues tracking 5.4% higher than last year at the same point (before considering the unresolved receivable); visitor fees up 12.9%; slip-transfer fees down 8% (43 transfers July–Nov.); encumbrances of about $1.3 million; and overall midyear expenditures at about 47.5% of budget. Staff projected the property-management program could finish the year roughly $1,000,000 below budget, with the unresolved rent and two currently vacant restaurant tenant spaces as contributing factors.

Commissioners asked when vacant spaces could be re-tenanted and whether permitting and tenant-improvement timelines would delay revenue. Staff said RFP and council processes could take a month or two to select tenants, while tenant improvements and permitting might take an additional 3–12 months depending on the work.

The commission received the midyear report; staff will return with budget materials and a draft FY27 budget schedule as part of the standard process this spring.