Wharf tenants may pay less than leases should be worth, according to commissioner.
Thursday, December 16, 2010
=The city of Monterey may be losing as much as $3 million a year because of sweet deals offered to restaurants and shops on Monterey’s Fisherman’s Wharf, according to Monterey Planning Commissioner Willard McCrone, a local attorney and 2004 city council candidate.
Jam-packed tourist meccas like Old Fisherman’s Grotto and Monterey Boat Charters pay an estimated 54 cents per square foot in rent to its city hall landlords, according to McCrone’s analysis of thousands of pages of lease documents provided by the city.
By contrast, the going rate for downtown Monterey office space starts at about $1.50 per square foot, while retail and restaurant space can command more.
McCrone is demanding the city void dozens of wharf leases because he says they’re illegal.
“The city might as well be selling gasoline for 40 cents a gallon to a small list of its favorite citizens,” McCrone notes in a memo to his fellow planning commissioners.
Fisherman’s Wharf Association president Mary Alice Fettis says she’s not sure McCrone’s figures are accurate. She also says wharf tenants maintain the pilings and keep the street clean at their own expense. “There’s a lot of give and take with the city.”
Also missing from the leases, McCrone says, are standard provisions that would allow cash-strapped Monterey to benefit when businesses are sold or when property is sub-leased. He notes Abalonetti Restaurant sold for $1.1 million in 1991, and the city received nothing in the deal.
McCrone says he asked for information on the leases as the city embarked on its waterfront planning process. As part of a subcommittee charged with developing plans for a new waterfront park, McCrone says he needed to know what businesses currently operate on the waterfront and what they pay for the space.
McCrone reports that initially his requests for information went unanswered. Then local activist Barbara Bass Evans submitted a public records act request to the city and in recent months reams of documents began arriving.
McCrone pored over the paperwork, which he says is still incomplete, and has raised questions guaranteed to reverberate at city hall for months to come.
“All of this was very surprising and very new and it behooves us to investigate and find out what has happened,” says City Councilwoman Libby Downey.
City Manager Fred Meurer has noted that past city councils granted original leases in the 1960s to spur development long before the wharf was the thriving tourist hub it is today.
“People who initially put up their buildings took a risk. Their families went in when Monterey needed a boost,” says Monterey City Attorney Deborah Mall.
Mall, who in recent weeks has exchanged legalese-packed memos with McCrone, argues the leases are not illegal. She cautions chaos could ensue if the city takes action against wharf businesses. Technically, wharf buildings belong to the tenants, and they could legally tear them down, Mall says. Under a more likely scenario, wharf business owners could mire the city in litigation for years to come.
Still, she notes, “The city is not fighting to keep these leases… If [McCrone] has some reason we can break these leases and get more money, that would be a win-win for everyone.”