Boaters who anchor their vessels at off-shore mooring fields in the Newport Harbor continue to protest a proposal by a city commission to raise rents, now questioning the appraisal done for adjusting the rates.
There are more than 800 off-shore moorings in the harbor where people can park their boats. Some boaters could see their mooring rent increase by more than 400% – the Harbor Commission is discussing a phasing in plan that would start in 2025, and wouldn’t reach the maximum until five years.
Boaters argue they will be priced out of the harbor and question the size of the increase and whether it is necessary. Commissioners say they are doing their best to bring the price in line with a fair market rate for the use of an asset that is owned by the state and considered part of the public trust. The State Lands Commission oversees these areas of submerged land known better as tidelands.
The Newport Mooring Association has raised arguments there may be a possible conflict of interest for the independent appraiser the city hired to review the moorings and complete a comparative analysis of fair market rates.
They said Jim Netzer of Costa Mesa-based Netzer and Associates is connected to the Newport Aquatic Center, a nonprofit that offers rowing, kayaking, canoeing and other water sport activities from the bay inland of the harbor with a ground lease from the city, and that may be a conflict of interest. Netzer is a board member for the center and also, according to city records obtained by Chris Benzen, a mooring holder who spoke for the Newport Mooring Association at a recent commission meeting, made a personal loan in the past to the center.
Benzen also pointed out the city’s harbormaster, Paul Blank, who has been part of the discussions since 2021, has now recused himself as of last month from further discussions on the mooring rates. John Pope, the city’s spokesman, said Block’s recusal came at the advice of the city attorney.
“It makes you wonder and think there is an appearance of impropriety,” Benzen told the harbor commissioners of the questions the group has raised.
City officials said Netzer and other interested contractors went through the required process of submitting a proposal for providing the appraisal services and was selected from a group of three that submitted; Netzer has one of the highest national appraiser designations possible, Pope said.
Pope said Netzer’s membership on the Newport Aquatic Center board does not present a conflict, and the appraisal he is conducting for the city on the moorings “is distinct and separate from his involvement with NAC.”
“The fact that Netzer is a director with NAC does not create a conflict or prevent him from being able to appraise the moorings,” Pope said. He said the Newport Aquatic Center use in the area is “different in type and kind. So he has no interest in the ‘property’ at issue, the moorings.”
Netzer said that his appraisal was “impartial and independent” and that his position on the NAC board is not a “conflict of interest.”
“To suggest otherwise is defamatory,” he said in an emailed response, adding that “the NAC loan was approximately 10 years ago between two private parties and the city was not involved.”
The appraisal assessed the rental rates of moorings in the harbor using three different comparative analyses, including tidelands market rentals and similar mooring rentals, said Ira Beer, co-chair of the Harbor Commission and chair of its subcommittee on the proposal.
“The comparable rental analysis includes the yacht clubs along with five other mooring rental locations along the coast of California,” he said, adding for a 40-foot mooring, the Balboa Yacht Club charges $16, and the Newport Harbor Yacht Club gets $13.50.
The harbor charges $3.34 per linear foot of boat per month for rental for the offshore moorings, which come with no amenities, such as power or water, and can only be reached by using a dinghy, paddleboard, or another sort of watercraft. The latest version of the proposal discussed by the commissioners would charge between $7.77 and $17.78 per linear foot, with the price increasing with the size of the boat. Netzer’s appraisal had suggested up to $23.25 on the higher end for a fair market value.
Boaters argue the fee increase will make the boating lifestyle unattainable for many, especially those on fixed incomes, and will drive many out of Newport Harbor. However, city officials say the proposed rate increase is commensurate with what the market bears out, and the current rates are too low to maintain the public harbor.
Beer said his group has done the best it can to keep the prices “as reasonable as possible,” including suggesting the phasing in of the increase.
“Six increases over five-and-a-half years are what we think will get us up to what we think fair market value is today,” he said. “We’re saying, ‘Hey, let’s kick this thing down the road as far as we can.’ All we’re saying is pay your fair share and let us be in compliance with state code.”
Benzen also took the boaters’ complaints to the City Council last month.
“What they’re proposing, the 400% to 500% increase to offshore moorings? It’s discriminatory; it’s bullying by the city,” he said.
If the commission votes later to recommend a rate increase, the City Council must approve it. Then, the California Coastal Commission would make the final decision.
“We would like the city to respond to the questions we’ve raised,” Richard Navarro, a Newport Mooring Association board member, said. “They’re very serious .. . about the conduct of the appraiser and why the harbor master had to recuse himself. In my view, the Harbor Commission has really lost the confidence of the public. It has a job to do to restore that credibility.”
The mooring association will continue to look for assistance, including asking the California State Lands Commission to compare the city’s appraisal with one commissioned by the Newport Mooring Association, Navarro said. “If the intent was to do an objective review, we’d like the city to send that to the State Lands, but they chose not to do it.”
Typically, the State Lands Commission does not engage in the day-to-day management of legislatively granted public trust lands, said Sheri Pemberton, chief of external affairs. That responsibility falls to the city.
“The commission generally does not act to either approve or disprove a grantee’s actions,” she said, adding that the commission staff will “review the city’s appraisal through the lens of whether the appraisal constitutes a reasonable effort to derive fair market value for the occupation and use of public land.”
“Commission staff intend to consider the Newport Mooring Association’s appraisal when providing feedback to the city,” Pemberton added.
Beer said the rates will be discussed again during the commission’s meeting this month. The next meeting is scheduled for April 10.
“We intend to make a recommendation,” he said, “if we have all the data.”
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