T omorrow t he OC Board of Supervisors will vote on taking the next big step towards finalizing the harbor redevelopment agreement and 66-year master lease with Dana Point Harbor Partners.  To be clear, an affirmative vote does not authorize immediate execution of the contract; instead, it allows the County and DPHP to proceed to a 90- to 120-day option period during which the developer will be required to meet conditions specified within the option agreement.  If these conditions are met, the OC chief real estate officer will be authorized to execute the lease agreement at the end of the option period.  And we will have our new developer and operator.

 

The challenge for us is that many of the details that are so important to our community were deferred to the option period for resolution.  This means that there is not sufficient detail in the present contract language for us to evaluate the outcomes.  Examples of contract terms to be resolved during the option period include:

And the list goes on.  The past eight months of challenging negotiations between the County and DPHP focused primarily on financial terms and assignment of liabilities between the two parties, and left many of the design and operational details to the option period.  And based on the language of the option agreement, the OC chief real estate officer has independent discretion to approve the resolution of the option agreement (though the Board of Supervisors could assert their authority to approve it), giving him enormous independent responsibility for approving the details that matter so much to all of us.  There is no obligation within the option agreement to solicit community review and input prior to execution of the final lease agreement.

 

But defeating the option agreement tomorrow could be disastrous, setting the project back years and inflating costs in the meantime.  We believe there is an effective way forward...

 

The Dana Point Harbor Advisory Board was established earlier this year precisely to offer community guidance to harbor leadership on matters affecting our harbor, with a priority focus on Harbor Revitalization.  So, at tomorrow's Board of Supervisors meeting, the Dana Point Boaters Association will advocate for approval of the option and lease agreements, however only on the condition that the Chief Real Estate officer be directed to provide the Dana Point Harbor Advisory Board with relevant submittals by DPHP for review and feedback prior to their approval and no less than 30 days prior to execution of the final lease agreement.

 

We are optimistic.  Since the plan to engage a public-private partnership (P3) to undertake the Harbor Revitalization Plan was announced nearly three years ago, we have been mostly pleased with community participation in the development of plans.  Dana Point Harbor Partners has demonstrated an ongoing commitment to work with their future constituents in planning the future of our harbor.  In just the past two weeks alone, DPBA leadership has met twice with the marina developer to review and refine their plans for our marinas, and we have been impressed by their quick willingness to implement our ideas.  That said, it's dangerous to leave the next 66 years of our harbor to simple trust.  Hence, we expect obligated community participation in the review of the final plans for our harbor before the County and DPHP sign their lease agreement.  And we will ask for it tomorrow.

 

In related news, you may hear about opposition to the Harbor Revitalization Plan by a coalition represented by the "Friends of Harbors, Beaches and Parks" (FHBP).  Their concerns center on a projected deficit in Dana Point Harbor operating costs of nearly $500 million over the course of the 66-year lease agreement.  This alarms us, too.  But their opposition aims for the wrong target.  It is essential to point out a few facts about this projected shortfall...  This deficit is the consequence almost entirely of projected escalating costs of the OC Sheriff's Department coastal patrol operations, which are expected to cost nearly $1 billion to Dana Point Harbor over the next 66 years.  This deficit will occur whether the agreement with Dana Point Harbor Partners is approved tomorrow or not.  The $500 million shortfall will not be caused by approval of the agreement, and cannot be avoided by defeating it. 

 

We've used this space before to bring attention to the unsustainable costs of the current model of harbor security provided by OCSD harbor patrol.  We have also pointed out that Dana Point Harbor pays a wildly disproportionate share of the costs for providing security to Orange County's 47 miles of coastline.  This is why we have requested an examination of harbor patrol funding and operations and an exploration of suitable alternatives, which 5th District Supervisor Lisa Bartlett directed the OC chief executive to undertake last month (see the directive here).

 

We agree with the Friends of Harbors Beaches and Parks that the projected $500 million shortfall is unacceptable.  But we disagree that defeating the Dana Point Harbor Revitalization Plan will avoid it.  Instead, the County must identify and implement a strategy to reduce the unsustainable burden of escalating harbor patrol costs, which is a County-wide issue, not one limited to Dana Point Harbor.  In the meantime, the Harbor Revitalization Plan must proceed.