Dana Point Harbor Partners has been our landlord for barely more than a month, and in their first few weeks they wasted little time getting busy with their new boater tenants. Unfortunately, their first outreach efforts created plenty of confusion and no shortage of frustration and angst. As you can probably imagine, your Boaters Association has heard from many of you. Too many to keep up. Our apologies if we haven't responded to you yet; we hope this newsletter provides some answers and clarity, if not satisfaction.
Over the last two weeks, our 2400 Dana Point Harbor wet slip boaters were contacted by marina management and instructed to sign new slip license agreements. West Marina boaters received it at least twice. In many cases, boaters saw adjustments to their slip rates - some up, some down. There was something mentioned about amnesty. And all of this was dispatched with (in our opinion) insufficient explanation, especially on the west side.
Let us try to clear things up for you...
New Slip License Agreements (SLAs)
Every Dana Point Boater is now a tenant of Dana Point Harbor Partners. Consequently - and as expected - we have been asked to update our SLAs with our new landlord. In fact, this is a requirement in DPHP's agreement with the County of Orange. Most of the terms in the new SLA were carried over from the previous version, though some are new, and all were approved by the County. Your Boaters Association also reviewed the draft SLA, we objected to some terms, approved of others, and even suggested new language. In some cases we prevailed, in others we didn't. Most of the new terms focus on vessel insurance requirements, new rules on slip subleasing, vessel ownership and partnerships, and
the formula by which slip rates are determined.
Most West Marina boaters received the SLA at least twice. The first version included errors and was missing language that was negotiated and agreed to between us and DPHP. We insisted on important corrections on behalf of our boaters, so that's partly on us.
Unfortunately, the SLAs were pushed out without advance notice or explanation, especially on the west side. And there was no primer or crosswalk to what new terms boaters are subject to.
Slip Rate "Corrections"
DPHP has assured us all along that they don't plan any immediate slip rate increases. And technically they are keeping to their word.
. However, in DPHP's agreement with the County, slip fees will be calculated by the length of the slip or the overall length of the vessel,
whichever is greater
. So even though the
rate per foot
remains the same, boaters whose vessels exceed the length of their slip are being notified that their rate is increasing commensurate with the amount of their overhang. DPHP is calling this a slip rate "correction." Though this slip rate formula is the standard across most marinas, DPHP was not contractually obligated to implement these adjustments immediately, and doing so in their first month on the job has sadly earned some ill will among those impacted. We would have preferred at least 30 days' notice with perhaps a January 1 implementation date. Even better, they should have demonstrated visible, tangible improvements to the boater experience under their watch before asking anyone for more money.
DPHP has explained to us that they manually measured every vessel in the harbor. If you disagree with their measurement, please contact the marina office and they will re-measure in your presence.
Most important is how slip rates will be managed into the future. As we've described previously in this space, the County did not constrain DPHP in the formulation of slip rates; they are free to charge boaters as they see fit. DPHP has assured us that they intend to create a slip rate plan that recognizes and sustains the character of our harbor; however, an investment of $100 million or more in our marinas will undoubtedly come with a price to boaters. That is, a reasonable and proportionate price following placement of boats into their new slips. In this regard, we have urged DPHP to implement a pause in slip rate increases until our boaters are moved into new slips, with all the new amenities they come with. This will be a priority for us in the days, months and years ahead.
What is this "amnesty" DPHP mentioned in their letter and who gets it?
This one was enormously difficult for us... What to do with slip tenants who acquired their slips without waiting their turn on the waitlist? Transferring occupancy of a boat slip in Dana Point Harbor with the sale or transfer of ownership of a vessel, or by entering into new partnerships, or in any other way that bypasses the waitlists, has always been prohibited. However, many boaters have utilized legal loopholes to conceal these transactions and now occupy boat slips without having served on a slip waitlist. Based on the terms of the previous and new slip license agreements, these boaters are subject to eviction.
As DPHP inspects the slip tenant records and distributes the new slip license agreements, they are discovering that the number of suspicious licensees of record may number in the hundreds of boaters. Evict them all? No doubt many boaters waiting years on the waitlists would answer yes.
The Dana Point Boaters Association was asked to weigh in on this matter. On one hand, boaters on the waitlists are waiting years longer than they might otherwise due to these prohibited slip transfers. On the other hand, do we evict potentially hundreds of members of our community, some of whom may have unwittingly entered into prohibited transactions at the advice of their boat brokers, or otherwise not understood the prohibition on their transaction (not that it makes it OK)? There's no easy way out of this one.
In the end, we advocated for a one-time, brief amnesty period for tenants to correct their documented slip licensee of record. DPHP is giving these boaters until December 20 to contact the marina office to enter into a new, corrected slip license agreement with a tenure date reset to the date of the new agreement. Boaters who are discovered after December 20 to have acquired their slip through a prohibited transaction will be subject to the rules of the SLA, including possible eviction.
We have also worked with DPHP on new SLA terms and an enforcement plan to prevent these prohibited slip transfers from occurring into the future, which should reduce the waits for those still on the waitlists.
Some of you - especially those of you waiting for slips - may be displeased with this course of action. We're not thrilled with it ourselves. But we believe this is the appropriate solution to absolve past sins while working to ensure the integrity of the waitlists and slip assignments into the future.
Off to a Rocky Start
Please know that we have made our concerns over how the SLAs and slip rate adjustments were implemented very clear to DPHP. We have worked closely with our new partners for nearly two years now and we are willing to attribute these missteps to trying to do too much too soon. This is their mulligan. We have also expressed our expectations that DPHP collaborate better with us in the future when implementing new initiatives, or undertaking any actions which may benefit from our input and aid in communicating with our community. They have assured us that they will. Despite these initial fumbles, we remain optimistic for now that we are on the best course for the future of our harbor. Time will tell.