By Frank Gormlie / OB Rag
North end of Belmont Park
Harris: “We can’t keep giving away our assets to big business.”
Just got off the phone with Councilman Ed Harris – he represents OB, Mission Beach and the rest of District 2, of course.
He had a lot to say about the Belmont Park lease that the City Council just rejected on Monday. He knew that we’d been covering the issue. Tuesday, the U-T ran an article on the rejection, tacking in favor of the current managers, it seemed. Harris wanted to set the record straight.
Harris, you see, led a Council majority Monday in rejecting the proposed new lease for Pacifica Enterprises because the cut the City is getting is not fair. All the Democrats followed his lead (Emerald was out) and are having the issue return to the Council in 60 days. The Republicans all voted to renew the current lease.
“We have to take in the big picture,” Harris told me. “We can’t keep giving away our assets to big business,” he said.
Why is the deal that the City of San Diego has in the current lease for Belmont Park not fair?
“The City has received $1.6 Million dollars in 26 years – that’s only $5,000 a month,” he said. “It’s pathetic.”
Aerial view of Belmont Park. Does it contain 70,000 square feet, or 85,000, or even 76,000?
He and the other Council members were handed a 98-page contract the other day to approve, a very confusing document.
“I’ve been getting different sets of numbers,” he said about the square footage covered by the lease – “from the staff, the [Park] managers. Can’t get solid numbers of the square footage. It’s been 70,000, up to 85,000 – and last night it was 76,000.”
“That’s only 60 cents to $1.24 a square foot. It should be $2 to $3 a square foot.”
Why, he said, one could go to Costco near Pacific Beach but across I-5, and rent a storage unit for $2.85 a square foot. Yet the City is getting only as low as 60 cents a square foot on prime beach property.
The lease agreed to in 1988 did not allow for any accountability, Harris said, to ensure that the City gets paid.
“My colleagues” Harris continued, referring to those who voted for the current lease, “like it. They say it pays for police and the fire department. But how does it pay for first responders?” he asked. In fact, he said, local merchants and small businesses are paying for private security in Ocean Beach, and BIDs are created to clean streets and sidewalks. His point being that its the small merchants that are taking up the slack that the City lets go – as it doesn’t have enough revenue for the needed police and fire protection.
If the City got more revenues from this lease, that would pay for police and fire, he reiterated.
South end
Harris said his Republican colleagues on the Council are worried about the Plunge, because Pacifica asserted it wouldn’t get the needed renovations. But Harris said the tax payers will be paying for 100% of all the improvements the Plunge needs – through tax credits to the Park’s lessee. The tax credits come out of the 5% revenue the City receives under the current lease. Pacifica would do the work.
Whether the City pays Pacifica to make them or the City hires an outside contractor to do them, the Plunge will get its needed renovations.
“We’re going into a new era,” Harris told me. “Vacation rentals have gone off the charts in Mission Beach,” he said. Belmont Park is set up due to its locale to earn big monies, and the City should be getting a fair shake.
So, in the end Harris couldn’t approve the lease.”We could be paying for first responders, firemen, police officers,” he said – with the extra revenue from the lease. He said:
“The City is a huge landlord. It has to quit giving away our own assets.”
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Beautiful. Thank you Ed Harris and Gormlie for revealing yet another welfare for San Diego plutocrats.
Good to hear Councilmember Harris realizes how little some of these leasees are paying.
Question: are the terms of the proposed contract available for public review before it is given final approval? And are approved contracts for other properties on public lands available for anyone to read?
Also, how about some efforts to reduce length of similar leases, from decades to something that can be more responsive to periodic economic changes? As Harris points out: this area is booming with vacation rentals, yet relatively little goes to pay for the public services that make the area safe, attractive and appealing to residents and visitors alike.
Some of the other Mission Bay leases (hotels) were approved in a rush, before the 2012 elections, apparently to avoid scrutiny of a less friendly Mayor’s office.
The previous Council make-up approved them- are they now set in stone for decades? If we hit another economic glitch and/or this recovery continues to stumble along with moderate gains, how can the City make up for losses in reduced tourism dollars etc?
Let’s not forget the 40 year lease with Bahia owner Bill Evans that was rammed through a week before Filner was elected. A sweetheart deal for Evans and a real stinker for citizens.
I’m moving to District 2 and was wondering who Ed Harris is,ex Marine, Lifeguard, Democrat, well now that I know I like it.
Unfortunately, Ed Harris will be the outgoing Councilmember for District 2 in December. Lorie Zapf will be taking that place and we’ll see what happens then. Hopefully her concerns will be one in the same with those of the residents in her District 2.
I would not count on Lorie doing the right things.
Thank you Councilmember Harris and Lori Saldana for your astute thinking and all your comments. The San Diego community would like to know where the money goes, why we’re losing our police officers, fire personnel and first responders to retirement and other cities, why infrastructure is crumbling and why we’re planning so much for the millions who will be coming to San Diego in the future as opposed to taking care of the residents who already live here! Now we can see that much of ‘the money’ never really gets here! Where else might this type of situation be happening?
It seems that proposed contracts should be made available for public review before given final approval, at the very least, in the District that would be impacted the most. And if not, why aren’t approved contracts for other properties on public lands available for anyone to read? Thanks again to Ed Harris and Lori Saldana for your comments.
Great article, and solid comments all around. I have worked in public private development for many years, and in my professional opinion the best thing a City can do in these situations is act like a private landlord. In other words, get fair market value return for its land and facilities. This should address the City infrastructure and services needs, but even if it does not, it’s a fair structure for the owners of the land – we, the people, and that is what all government representatives should be seeking, regardless of party affiliation. I like the comparison to CostCo and other lease rates.
There are situations where a City can accept less than fair market value, or agree to deferred returns, such as when greater public interests are being served – such as a project that serves as catalyst for economic development in disadvantaged areas. Or sponsoring a needed service to the public that would otherwise not be provided. There are a number of different ways public interest can be served in this way.
That said, Mission Beach cannot be characterized in this way. It’s a fully functioning healthy economic environment. The City is compelled to seek fair market value in this situation. I would like to hear the argument in favor of NOT getting that value – what do we get in exchange?
Good piece, Frank, and thanks to you, Ed Harris, Lori Saldana, and others for watching out for our interests. That is practically the definition of public servant.
Follow the money axiom is advisable for any decisions with public assets. As noted by others, in waning days of Sander’s administration a number of long term leases were finalized for cronies on Mission Bay.
Who gave who what when is supposedly in the public record. The Manager of the “Symphony Asset Pool IV, LLC is Pacifica Enterprises, Inc out of Rancho Santa Fe (they should not be confused with Pacific Development Group). Their principles are public record.
I was at the hearing because of the climate action resolution and put in an opposition slip after hearing Middle Class Taxpayers Association representative Pat Zaharapoulos speak in opposition to the lease terms.
The Mayor’s representative piped up as the project was “heading south” to suggest that the Council might ought to continue the item. Councilmember Zapf dutifully made a continuance for discussion motion. She also cited the approval of the previously mentioned long term leases as justification for this long term lease (!) — “we should be doing things how we do it in San Diego, not what they do in LA or other places….”.
Ultimately, Councilmember Harris modified his motion at suggestion of Council President Gloria to not insist on keeping the existing 2038 lease deadline in order to facilitate discussions over the next 60 days. Councilmember Harris made a good point that fixing the Plunge with rent credits is still public funds.
Some additional observations: At the rate our planet is melting land mass ice, the entire Mission Beach and Belmont Park should be underwater by 2069. If they are going to have a lease for that period they should be contributing to necessary climate adaptation for the area. Maybe advisable to include a future facility for water taxis instead of valet parking.
Speaking of parking, the vast areas of asphalt shown in the article’s aerial photo could be put to much better use. Build it up higher and cover it with solar PV panels and charge real cost to park there. Maybe squeeze in a boutique coaster themed hotel over the parking and under the panels, too.
The paltry $70,000 traffic mitigation fund requirement is at least an order of magnitude off from what would be necessary to actually alleviate traffic. How about providing beach and park access via real transit to and from inland communities, especially those that are classified as “disadvantaged” and “communities of concern” by federal, state and regional agencies.
I hope Middle Class Taxpayers Assoc.and others will outline some stronger lease points for public benefit. Could probably demonstrate nexus for a climate mitigation and adaptation fund to include more transit service and some heavy duty measures to deal with sea level rising and storm protections.
If they want an option to extend, they need to really pony up on the sea level adaption and infrastructure work that will be necessary for at least the next two generations.
Excellent points Jay. Thanks for the comments.