We reported Aug. 28 on several members of the two teams bidding to renovate Dana Point Harbor for an estimated $200 million. At that price there will be barnacles, and they’ll be scraped.
Part two here looks at the depths of the issue and how navigational difficulties don’t deter exploration by everyone from boaters to billionaires.
The numbers and major players involved in Orange County’s waterfront point to a pickup in local marina work.
Data from the National Marine Manufacturers Association in Chicago show there are about 24,000 boats in and around OC. About 80% are powerboats or sailboats, the rest personal watercraft, such as jet skis.
State retail sales of new boats, engines and marine accessories top $550 million.
A marina is economy-dependent “because it relies on discretionary spending,” said Eric Kretsch of national trade group Association of Marina Industries in Warren, R.I.
Next year “is expected to be the strongest year for marinas” since the real estate recession in 2008, he said.
U.S. gross domestic product hit 3% in the second quarter this year, the strongest U.S. economy in over two years. Consumer spending, up 3.3%, is more than two-thirds of the GDP.
Feelin’ Luckey
A sign of that came this spring when Long Beach-based Zeal Palace LP bought Huntington Harbor Bay Club, which includes a marina where renovations are planned.
Zeal Palace is linked to Palmer Luckey, who founded Oculus VR and sold it to Facebook in 2014 for $2 billion.
Luckey’s marina buy followed last fall’s news that hotel developer and operator Brighton Management LLC in Irvine wants to build two properties totaling 275 rooms at Newport Dunes.
Waterfront Resort Properties LP and Newport Dunes Marina LLC lease the 110-acre Newport Dunes from the county; the marina has 450 slips.
Newport Dunes had $18 million in annual revenue and paid $3 million to the county for the lease, a 2016 report by OC Auditor-Controller Eric Woolery said.
And a Kite
When comedian Ray Romano asked his son what he wanted for his birthday, the kid said, “Everything and a kite.”
Enter Irvine Co.
The Newport Beach-based land owner and developer known for its offices, apartments, malls and hotels, which include Pelican Hill, Island Hotel in Newport Beach and Hotel Irvine, also runs marinas.
California Recreation Co. is in its resort properties unit, run by President Ralph Grippo, and includes hotels, golf courses, and about 525 boat slips in Newport Harbor:
• Balboa Marina next to Linda Isle, with 105 slips
• Balboa Yacht Club Marina near the club, with 72
• Bayside Marina across from Balboa Island, with 174
• Villa Cove Marina near Newport Beach Yacht Club, with 42
• Bayshore Marina on the main channel, with 134
CRC also runs Northern California’s Bair Island Marina in Redwood City, with 95 slips.
General Manager Greg Sinks—yes, really—said his clients are locals seeking an “ideal … home port” and access to area amenities. “We’re across the channel from Balboa Island and across the street from Fashion Island.”
Wet, Dry
CRC doesn’t own those marinas.
No one does.
Or we all do.
Sort of.
It’s complicated.
California’s coast and three miles out to sea is held by the state based on a 1928 map’s high-tide line, said Kevin Ketchum, former president of the Marine Recreation Association and a principal at marina operator California Yacht Marinas in Torrance.
The state line to the west is written in water.
California, between the 1930s and 1960s, gave trustee rights to coastal areas to cities and counties.
Newport Beach, incorporated in 1906, got its sand. Dana Point, incorporated in 1989, didn’t exist at the time so that waterfront went to the county.
Palmieri Tyler attorney Ryan Prager—the Irvine firm represented Zeal Palace in its Huntington Beach marina buy—said the high-tide line in the sand is “tough to find” but works out to the difference between dirt that’s wet and dirt that’s dry.
“If it’s wet, it’s the state’s.”
It’s Personal
Of Irvine Co.’s five marinas, it owns the dirt below one, the city of Newport Beach has dibs on three, and OC takes the fifth:
• Balboa Marina sits atop submerged tidelands owned by Irvine Co.
• Balboa Yacht Club Marina, Bayside, and Villa Cove are leased through the city for a total of about $87,000 a year.
• Bayshore, which counts as county land, generated a lease payment of about $373,000 last year.
Huntington Beach marinas, which include Luckey’s purchase, can similarly confound.
Marina operators own personal property, not real property, Prager said—docks but not dirt—or as Newport Beach Harbor Resources Manager Chris Miller puts it, “The part that floats.”
They “have a permit to occupy via the lease,” and “can do what they want with the water.”
Murky Beauty
Below that is where it gets tangled and curious and legal, like swimming into a mass of kelp, or discovering one of those sightless sea beasts at the bottom of the Mariana Trench.
Depths get even murkier with differences between tidelands marinas—natural coastline, such as parts of Huntington Harbor—and those, like Newport’s, that were dredged—i.e., man-made.
Into that economic engine toss the sand a marina operator moves—it’s improvements that would need to be removed if it lost a lease.
Marinas “rarely change hands,” partly for that reason, Prager said.
A project like Dana Point’s isn’t blocked by that because the whole harbor is being redone, and harbor operations, which include Dana’s “east” and “west” marinas, are likely to change significantly.
It’s not a problem for Irvine Co., either.
“They’re the last people to ever lose anything like that,” Prager said.
Sinks said marinas fit a hospitality focus.
“We understand the value and beauty of the harbor,” he said.
Buried Treasure
It’s easy to take water for granted.
“C’mon in,” we say. “The water’s fine.”
Travelers and locals alike love our coast, with good reason.
It’s a manifest destiny on the western edge of our daily lives that forms and reforms itself with every high tide; the landlocked progeny of pioneers are kicking the dust and cursing the forebears who 200 years ago halted anywhere inland and called it a day.
It’s so common, it could an old joke:
Q: Why does OC build beachfront homes?
A: Because people want to see their boats.
Like the weather, we talk about the water and rarely do much about it.
Like the weather, that’s about to change.
